The CBN has in recent months issued a set of circulars that have affected the purchase of utilization of dollars in Nigeria. The moves have been viewed by some, particularly foreign investors as akin to Capital Controls. Capital Control is a tool used by Central Banks to limit the outflow of dollars from their economy. This concern has not gone unnoticed by the CBN Governor and granted an interview to Bloomberg explaining his money monetary stance. Here is an excerpt;
On the Zero Percent Net Open Position to Banks
There will be a review in due course……But I can tell you categorically it will no longer be 1 percent. It will be less than 1 percent. The reason we put a stop to 1 percent is because we felt that it was too large to be held by banks as a trading position.
Rule instructing buyers of forex to use it within 24 hours
The bank has no plans to change a rule adopted around the same time that dollars bought in the interbank market be used within 48 hours or sold to the regulator. The naira is “currently appropriately priced” and no new measures are being considered, Emefiele said.
On Whether his policies are working
We are satisfied with the current adjustment that’s been done. It remains a free entry and free exit market.
On Foreign Investors looking to exit their positions
That is news to me that foreign investors are unable to exit their positions. If any foreign investor needs to exit its position, he should make a demand to a bank. If the bank cannot find those dollars to buy in the interbank market, the central bank will provide the dollars.
On whether the elections are a reason for the policies
The elections have nothing to do with our decisions. We look at the economy, we look at what’s happening in the banking system and the foreign exchange market.
