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CBN explains dollar glut in Bureau de Change market

The Central Bank of Nigeria has explained that because of the implementation of the Bank Verification Number (BVN) in the Bureau de Change transactions, only…

The Central Bank of Nigeria has explained that because of the implementation of the Bank Verification Number (BVN) in the Bureau de Change transactions, only genuine buyers of the foreign exchange are entertained.
Reacting to the glut of dollar sourced from the CBN by the BDCs operators, the spokesman of CBN, Mallam Ibrahim Mu’azu said the new policy has compelled the BDC operators to only deal with the real people that demand the forex to settle their bills or pay for travel expenses as demanded by the law.
He described the assertion that introduction of the BVN as a requirement for the sale of foreign exchange is responsible for the low patronage “as just a ploy to arm-twist or blackmail the CBN into reversing the directive on BVN requirement”.
The BDC operators told Daily Trust that some customers now shun them and resort to source the dollar through backdoor as a result the rate was above N225 as at last week.
But he CBN said that BDCs were licensed to service the low end users whose demand falls between $4,000 and $5,000 (and below) as Basic Travel Allowance (BTA) or Personal Travel Allowance (PTA) as the case may be. However, the BDC operators have engaged in bulk sales of foreign currency over the years to those who carry the foreign currencies across the borders. Hence the introduction of the BVN as a mandatory requirement for purchasing foreign currencies from the BDCs has checked that flagrant disobedience of regulations guiding of their operations, he averred.
Speaking further, Mallam Mu’azu noted that those with legitimate demand for foreign exchange need not fear as the BVN requirement is to facilitate the  enforcement of authorized limits of sales and spread to end users and reduce the incidence of multiple purchases, round tripping and illicit transfer of funds.  
 

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