Western Union, Money Gram transfers are now to be paid in Naira - CBN

Recipients of Western Union, Money Gram transfers are now to be paid in Naira.

The Central Bank of Nigeria (CBN) says it has suspended its Wholesale Dutch Auctions (WDAS) to check money laundering in the foreign exchange market.

A circular by CBN to Bureau De Change (BDC) operators on Friday said that the twice-weekly wholesale foreign exchange auction had been suspended for now.

The circular said the auction would be replaced with a retail version requiring dealers to reveal the identity of the buyers.

"The WDAs is hereby suspended and in its place Retail Dutch Auctions (RDAs) is hereby re-introduced with effect from Oct. 2, 2013," it said.

The circular, signed by CBN Trade & Exchange, Batari Musa, said that the RDA would take place on Monday and Wednesday of every week.

It stated that "available statistics indicate that Nigeria has become the largest importer of U.S. dollars due to importation of cash by Deposit Money Banks (DMBs)."

The circular said that dealers would now have to obtain prior approval to import foreign exchange bank notes to prevent money laundering.

"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, CBN, Abuja," it said.

It directed that recipients of proceeds from international money transfer firms such as Western Union and Money Gram would be paid only in naira.

According to the circular, the limit on MasterCard, Visa naira debit and credit card spending abroad has been increased to 150,000 dollars a year from 40,000 dollars.

It said that the aim was to ensure transparency and reduce black market foreign exchange trading.

The new measures do not affect the 250,000 dollars weekly limit for foreign exchange dealer sales to bureau de change.

(NAN)