As Burundi’s central bank cracks down on forex bureaus that have been selling dollars at twice the official rate, small scale traders are finding it difficult to find the foreign currency.
When the political crisis erupted in 2015, the forex rate almost doubled, with the dollar exchanging at Bfi3,050 ($1.65) against an official rate of between Bfi1,700 ($0.92) and Bfi1,800 ($0.97).
“We don’t mind the high rates, but the issue is getting the dollars so that we can travel to keep our businesses afloat,” said a trader in Bujumbura.
According to the trader, the central bank’s move means that forex bureaus will not be readily selling dollars, thus creating scarcity and an even higher black market rate.
The Bank of the Republic of Burundi (BRB) does not have enough foreign currency to satisfy the market despite imposing tough measures on private forex bureaus.
“If I was to walk into the central bank today to buy dollars, they won’t have enough. So how are we expected to import goods?” the trader asked.
The regulations had been in place since June 2010.
In September, BRB asked all forex bureau operators to purchase software worth Bfi2 million ($1,081) ‘’that will help the central bank to follow closely the bureau’s activities in efforts to comply with the central bank’s exchange rate,” said Jean Ciza, the central bank governor.
The government also announced that forex bureaus will have to increase their capital to Bfi100 million ($54,054) from Bfi50 million ($81,081).
The operators are also expected to provide receipts for all exchange transactions, and must be registered with an association of forex bureaus.
“The daily withdrawal of foreign currencies has also been reduced from $3,000 to $500 per day, so whoever exceeds the amount will have to justify it and get permission to do so,” said Mr Ciza in his announcement. The amount changed should not exceed $3,000 per month.
The bureaus were give one year to comply with the new regulations.