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The CBN Governor, Mallam Sanusi Lamido Sanusi, revealed this last night, while delivering a lecture at the 75th anniversary ceremony of the Ikoyi Club in Lagos.
He however, did not name the affected firms.
This is just as the central bank yesterday suspended the Wholesale Dutch Auction System (WDAS) and re-introduced the Retail Dutch Auction System (RDAS). This takes effect from October 3rd.
The CBN stated this in a circular titled: “Developments in the Foreign Exchange Market,” a copy of which was posted on its website.
Continuing, Sanusi argued that the illegal activity of the BDC operators was partly responsible for the volatility observed in the BDC and parallel segments of the forex market.
He said: “Why are Nigerians changing cash to dollars? To buy goods? To pay medical bills? So we started looking at the numbers and what did we discover? There are banks that were importing cash in millions of dollars and were selling to BDCs. We went to those BDCs to show us what they did with the dollars and they could not.
“So this week, I will revoke 20 BDC licences and I am going to prosecute them for money laundering. If you take money above the limit and you can’t show what you did with it, then it is money laundering. You either show us what you did with it or it is money laundering.”
The CBN governor said: “I announce sadly that today, Nigeria has overtaken Russia as the biggest importer of United States dollars. This country imports more US dollars in cash than any other country in the world.
“Who are the people that can afford dollars? It is people who don’t have to borrow. People who have access to free naira that they did not borrow from bank.
“We reduced the supply of dollars and then what happens? We saw a spike in the BDC and parallel markets' rates. Then they create an opportunity for arbitrage and we start having exchange rate difficulties. This is because if someone is in money laundering, his demand for dollars is completely inelastic. He can do N180/$1, he can pay N200/$1, he can pay N250/$1 and he is not going to stop. I am saying this because these are every day challenges we deal with in monetary policy.”
Throwing more light on the RDAS, the CBN circular explained that the minimum bid by authorised dealers shall be $100,000.00, saying that just like the WDAS, auction at the newly introduced RDAS would be held every Monday and Wednesday.
It added: “The existing limit of $40,000 per annum on naira debit and credit cards has been reviewed upwards to $150,000 per annum subject to monthly rendition of returns by authorised dealer banks and card issuers (MasterCard and Visa) to the CBN. The settlement of the cards shall continue to be with inter-bank funds.
“The importation of foreign currency banknotes by dealers shall henceforth be subject to a prior approval by the CBN. Any authorised dealer intending to import foreign currency cash is required to forward an application, stating the amount and purpose to the Director, Trade and Exchange Department, CBN for consideration.
“Importers intending to pay for imports of non-regulated products valued not more than $250,000 per annum using telegraphic transfers shall only complete form ‘m’ online with pro-forma invoice.”
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