Expdonaloaded News; BVN: CBN, BDCs disagree over impact on forex market

THE Central Bank of Nigeria (CBN) and the Bureau De’ Change (BDC) operators are at loggerheads over the impact of the directives on the use of Bank Verification Number (BVN) as a requisite for the purchase of foreign currency in the foreign exchange market.This was activities in the parallel market showed that the naira depreciated N3 from N227/$1 on Monday to about N232/$1 on Friday, a week after the apex bank issued the directive on the foreign exchange market.


With the recent trend, it was noticed that the naira appreciated 2kobo on Monday to N199.08/$1 at the interbank market and this was maintained till Thursday when it depreciated 2kobo to N199.10/$1. Similarly, the CBN’s intervention rate also followed the same trend as it appreciated 2kobo to N196.98/$1 on Monday and depreciated by the same amount to N197/$1 on Thursday.
The President, Association of BDCs operators, Aminu Gwadabe, stated that fear of their BVNs being used for fraudulent activities had prevented customers from disclosing them, which made the customers to shun the BDC operators, thus leading to increased demand for dollars at the parallel market, resulting in a further depreciation of the naira.
Investigations over the weekend indicate that most of the BDC operators are now left with large volumes of unsold dollar cash, most of which they bought from the CBN official window. The operators are blaming the BVN requirement as mainly responsible for their inability to sell.
Speaking on the development, the Director of Corporate Communication of CBN, Ibrahim Mu’azu, in a statement made available to Expdonaloaded blog discountenanced the assertion that introduction of the BVN as a requirement for the sale of foreign exchange was responsible for the low patronage.
He described such assertion “as just a ploy to arm-twist or blackmail the CBN into reversing the directive on BVN requirement.”
Mu’azu further noted that BDCs were licensed to service the low end users whose demand fall 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 BDCs has checked that flagrant disobedience of regulations guiding their operations, he said.
Speaking further, Mu’azu noted that those with legitimate demand for foreign exchange need not fear as the BVN requirement would facilitate the enforcement of authorised limits of sales and spread to end users and reduce the incidence of multiple purchases, round tripping and illicit transfer of funds.
The CBN spokesman also allayed the fear of customers in terms of compromising part of their banking information, stating that BVN is just a unique identification number, which is grossly inadequate to provide access to customers’ accounts.