The naira fell 1.22 per cent against the dollar on the unofficial market as 1,700 bureaux de change (BDC) operators failed to get dollar supply at a Central Bank of Nigeria (CBN) sale due to incomplete documentation during the week.
The naira was quoted at 246 against the dollar on the unofficial market, weaker than the previous rate of N243.
About 1,700 BDC agents out of 2,818 operators were denied access to participate in the forex sale on Wednesday, limiting dollar supply, Aminu Gwadabe, president of Nigeria’s bureau de change association, disclosed.
“The central bank has reduced the amount of dollar sold to bureaux de change at its twice-weekly intervention, which has also been cut to once a week now,” Michael Odoh, a bureau de change operator said.
He said the reduction in volume of dollar sales by the CBN coupled with year-end surge in demand for foreign currencies by importers have impacted negatively on the naira.
The naira fall was intensified after the CBN mandated BDC operators to get Bank Verification Numbers (BVNs) of customers buying foreign exchange. The policy implementation, which started on November 1, has reduced the volume of dollars sold by BDCs and created dollar scarcity in the market.
However, the CBN has been able to keep a grip on the local currency movement in the interbank market.
The CBN has insisted that the adoption of BVN as a condition for the purchase of forex is expected to reduce the incidence of multiple purchases, round tripping and illicit transfer of funds, facilitate enforcement of authorised limits of forex sales to end users, sanitise the retail segment of the market and engender policies that will facilitate better allocation of forex, based on genuine demands.
It insisted that the BVN provides the unique identity of each customer for the purpose of achieving effective “Know Your Customer” (KYC) principle and fraud prevention.
It said the BVN is neither a payment instrument nor an account number and could therefore, not be used to access any account by unauthorised users. The banks, BDC operators and regulators use the BVN to validate the identity of a customer, using some biometric information such as finger prints and photographs obtained at the point of enrolment.