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CBN probes banks over forex round-tripping

LAGOS — The Central Bank of Nigeria, CBN, yesterday commenced move to investigate banks for round-tripping of foreign exchange.

In a circular to authorised dealers entitled “Returns on Utilisation of foreign exchange,” the CBN requested for evidence of utilisation of foreign exchange bought for importation of petroleum products, rice, cement and sugar.

In the circular signed by Mrs. O. L . Auchogu, for the Director of Trade and Exchange, the CBN said: “All authorised dealers are requested to submit relevant documentation evidencing the utilisation of foreign exchange for the importation of the following: Petroleum products, cement, rice and wheat.

“In the case of petroleum products documentation is required for only transactions valued at $1 million.

“The return should cover the period from May to July 2011 and reach the Director, Trade and Exchange Department on or before the close of business on Friday, August 19.”

In another development, the CBN, in a bid to further increase foreign exchange supply into the retail segment and narrow the gap between the official and parallel market exchange rates, the Central Bank of Nigeria (CBN) yesterday increased weekly foreign exchange sales to bureaux de change (BDCs) by 100 per cent.

A top BDC operator confirmed to Vanguard that the CBN has increased weekly foreign exchange sale to BDCs to $100,000 per BDC per week. Previously the apex bank sells $50,000 to each BDC every week. This development is coming less than a week after the apex bank increase the limit of autonomous foreign exchange banks can sell to BDCs. Last week CBN increased the limit to $1 million per bank per week.



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