Operators of Bureaux De Change (BDC) across the country are calling for an extension of the deadline of the new policy of the Central Bank of Nigeria (CBN) which stipulates that BDC must take the Bank Verification Number (BVN) of all its walk-in customers before any transaction is consummated.
The deadline for compliance expired last Saturday as BDC operators are required effective November 1 to request for and validate the BVN of all walk-in customers before any transaction is consummated and consequently file the returns to the CBN.
The move by the CBN is to ensure that the scarce foreign exchange allocated to the BDCs are used for the right purposes and that no one would have the opportunity to breach the allowance limit set by the apex body. BDCs are not allowed to sell above $5,000 or its equivalent in other foreign currencies per transaction.
The CBN has however made known its resolve not to further extend its deadline either for the BVN registration or the requirement of BVN for foreign exchange transactions, saying it had given ample notice to all parties concerned and a further extension would defeat the purpose of the exercise.
Asides asking for an extension of the deadline, the BDC operators under the auspices of the Association of Bureau De Change Operators of Nigeria (ABCON) are also asking that the apex bank make foreign exchange transactions relating to Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) exclusive businesses of BDCs.
Presently, banks and BDCs are allowed to sell foreign exchange for PTA and BTA, but the BDC owners rising from a meeting at the weekend said “The CBN should disengage banks from the sales of PTA and BTA and make it an exclusive reserve of BDC operation.”
They however lamented the gap between the official and parallel market exchange rates and resolved to take measures to reduce the gap drastically. The gap between the two exchange rates as at Friday October 30th was N30 with the interbank market rate at N197 per dollar and the parallel market rate at N227 per dollar.
The ABCON members while emphasising the resolve of to comply with the CBN circular and their readiness to partner with the regulatory authority on its monetary and fiscal policies, stated that they have resolved constitute a price control mechanism committee for the purpose of ensuring price and market stability.
As part of measures to close the gap between the interbank and parallel market rates, the CBN had early in the year increased the volume of foreign exchange it sells to the BDCs weekly from the initial $15,000 to $30,000. This has however not been able to bridge the gap as demand for foreign exchange kept rising.
This had prompted the CBN to take several steps such as the removal of 41 items from the eligible for forex list, suspension of cash deposit of foreign currencies, and most recently the requirement of BVN for foreign exchange transactions to ensure transparency and genuinity of forex demand.
This is coming on the heels of dwindling external reserves prompted by declining global oil price
and foreign currency revenue. The external reserves stood at $30.17 billion as at October 29, 2015, the latest figure given by the CBN, a decline of 12.52 per cent from what it was at the beginning of the year.
The reserves had declined to N29 billion as at June 30, 2015 from $34.49 billion which it was at the beginning of the year, a 15.9 per cent drop. Last year, the country’s reserves shed an accumulated 17.5 per cent within 12 months. Reserves which stood at $43.5 billion at the beginning of 2014 dropped to $35.88 billion by the end of last year.
Source : Leadership