There is great pressure within the Banks to meet customers’ foreign exchange (forex) demand amid scarcity of the dollar in the financial services sector.
This was the position of top bank executives who spoke yesterday at the “CEOS Roundtable: Banking & Oil Industries” organised by Bloomberg in Lagos.
The Group Managing Director/CEO, FirstBank of Nigeria Limited, Bisi Onasanya, said forex scarcity was making it difficult for lenders to immediately meet the demands of importers requiring the greenback for transactions.
Manufacturers are unable to fund the importation of their raw materials because of the scarcity of dollars.
“Banks are not getting forex. Forex is drying up from the market. I sympathise with the CBN at this time and we cannot keep supporting the naira at this rate,” Onasanya said.
Onasanya said many manufacturers had huge cash, but no forex to buy. He attributed the scarcity to the go down in oil revenues, which is expected to drop from $84 billion in 2014 to $55 billion this year. The bank chief said there was little the apex bank can do to reverse the trend, except to partner with other regulators and promote the diversification of the economy.
Zenith Bank Managing Director/CEO Mr. Peter Amangbo agreed with Onasanya. He said the CBN was yet to clear the backlog of forex demands from importers and until that is done, it will be unwise to allow market forces decide the fate of the naira.
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“We have a case of panic and that has clogged the market. There is no need to devalue the naira. But CBN needs to clear the forex backlog before allowing market forces to determine naira status. When the investment climate is conducive, investors will come in and boost dollar supply.”
He said the CBN’s forex policy, including ban placed on some commodities from accessing forex from the official window, could be positive in the long run because there are local substitutes for each of the products affected. “CBN acted well. When you have scarce resources, you allocate them to areas of importance. We’re not in a hopeless situation,” he said.
The naira yesterday suffered a major setback, 24 hours after the announcement of the new forex policy by the CBN. President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Musa Gwadabe, said: “From a relative position of N221 to dollar, the naira nosedived to N225 to dollar yesterday. Also, the policy further creates room for speculation and hoarding. CBN needs to ensure adequate flow of forex to the real sector and create enabling environment to boost investors’ confidence.”