CBN restricts sale of RDAS, inter-bank funds to BDCs

The Central Bank of Nigeria (CBN) has prohibited the sale of foreign exchange purchased from Retail Dutch Auction System (RDAS) and inter-bank market to bureau de change (BDC) and authorised dealers in a continued effort at curtailing excess liquidity speculative activities.

This is to ensure that funds purchased from these sources are used for the purpose for which they were meant for such as funding of letters of credit, bills for collection and other invisible transactions, subject to appropriate documentation as provided by extant regulations.

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However, the CBN in a circular signed by Olakanmi Gbadamosi, director, trade and exchange department, said the weekly sales of forex to BDCs will be sustained by the CBN based on the liquidity needs of the market.

Meanwhile, CBN has again reviewed the net foreign exchange trading position upward from 0.1 percent of the shareholders’ fund unimpaired by losses to 0.5 percent of the shareholders fund unimpaired by losses.

This has been subjected to series of reviews from 5 percent in previous years to zero percent in December last year, to 0.1 percent two weeks ago and the current position of 0.5 percent.