ROUND TRIPPING: Fear grips banks over CBN probe

THERE is disquiet in banks over Central Bank of Nigeria’s (CBN’s) investigation of round tripping of foreign exchange.
Nigerian Tribune gathered that since the CBN’s circular on the issue, banks’ chief executives have been having sleepless night, though they have submitted the report as directed by the apex bank.
A top executive in one of the banks adjudged by the regulators to be sound told Nigerian Tribune on condition of anonymity that there was need for the apex bank to tread softly with the banks, stating that the current stability of the foreign exchange (Forex) market could be attributed to the support from the banking sector.
Though he did not rule out some banks’ involvement in the act, he noted that the various policies put in place by the apex bank to regulate the forex market were in order.
Speaking with Nigerian Tribune in Lagos, a renowned Bureau de Change (BDC) operator, Mr Adebayo Adenuga, noted that the apex bank had done well in stabilising the market.
According to him, the development would restore sanity to the market, adding that apart from checking round tripping, it would also protect the local industries.
It will be recalled that that the apex bank recently commenced moves 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.”
Also, 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, increased weekly foreign exchange sales to BDCs by 100 per cent.