Nairametrics| The Central bank of Nigeria (CBN) has readmitted three of the previously banned banks into the into the spot and wholesale forwards segment of the foreign exchange market after the banks provided ‘proof’ of selling forex to Small and Medium Scale Enterprises (SMEs) since the introduction of the special window for small businesses.
The readmitted banks are Guaranty Trust Bank (GTBank) Plc, FirstBank and United Bank for Africa (UBA) Plc. Yesterday, Nairametrics reported that all but 8 banks were banned from the forex market by the apex bank as a result of their non-compliance with the rules of the SME window created by the CBN to cater for the needs of entrepreneurs.
Why they were readmitted
However, ThisDay reports that a senior CBN official confirmed the reinstatement of these 3 banks into the forex market, as they had verified records of selling forex to SMEs through the window.
With the actions of the CBN, it is safe to say that the SME window will be used by the CBN as a benchmark to rate compliance of banks with its forex regulations. This is to avoid a frustration of its forex policy, which according to Isaac Okarafor, spokesperson of the bank, is aimed at ensuring convergence of the rates at the official and parallel markets.
In continuance of its policy and in defiance of skeptics, the CBN yesterday offered another $100 million at the interbank wholesale transactions, out of which only $65.94 million was subscribed for, further confirming the liquidity in the market.