Currency speculators who profit from round-tripping and other currency manipulation practices are in trouble, as the Nigerian central bank and its stakeholders form a coalition in facing such threats.
At the parallel market, the naira appreciated N520 to a dollar late Thursday, up from the previous day’s close of N525 to a dollar.
Bank CEOs expressed their appreciation by pledging support for the new foreign exchange measures coming from the Central Bank of Nigeria (CBN) and its efforts to stabilize foreign exchange.
Godwin Emefiele, the Governor of the Central Bank, had ordered all banks to set up teller points at designated branches so they could, in turn, fulfil legitimate FX requests for travel allowances, business allowances, tuition fees, medical payments, and SMEs transactions, among others.
READ: World Bank blames CBN for Nigeria’s FX crisis
In a presentation at the webinar, Access Bank’s Managing Director and Chief Executive Officer, Herbert Wigwe said, “The banking industry is willing and ready to assist with this function.”
Compliance measures are very strict at the banks, such as confirming eligibility and performing verifications.
“We expect that all banks in Nigeria will be able to meet these requirements. The banks have more than enough capacity to do this if you look at all their branches nationwide,” he added.
The Access Bank GMD promised that appropriate safeguards for the bank’s information would be in place to prevent disruptions and abuses of the system. He explained that the bank would also verify the Bank Verification Number of FX applicants.
READ: CBN to start printing currency for The Gambia – Emefiele
Banks that fail to create a forex desk as mandated by the regulator will be sanctioned, Wigwe said.
This function will be handled by the banking industry, which he said is ready and willing. Bank compliance measures, such as Know Your Customer (KYC), are very strict. Access Bank aims to comply with all of these requirements at all of its branches.
Market commentators have attributed the pressure facing the naira at the parallel market as well as the Investors and Exporters (I&E) forex window to currency speculators hoarding the United States dollars.
READ: CBN Governor promises digital currency will come to Nigeria
In case you missed it
- At the Monetary Policy Committee (MPC) meeting on Tuesday, July 27, 2021, the Central Bank of Nigeria announced that it would henceforth discontinue the sale of forex to the Bureau operators in Nigeria.
- The CBN has also stated that it will henceforth stop the licensing of new Bureau De Change (BDC) operators and further processing of BDC applications for forex across the country.
CBN should be the sole financial institution to remit all FOREX request from DMB to point of destination. CBN should encourage DMB to open an application where by all strictly verified and truthful FOREX requests are fulfilled.
These includes E-FX payment to cater for foreign school tuitions, medical bills, company FX. E-FOREX cards for BTA and PTA etc.
This will help in putting a stop to speculations and illegal FOREX requests and aid to strengthen the naira.
Lastly, CBN should ban BDC operators totally and make it a financial crime for any Nigerian institution not authorized to trade in FOREX transactions.
Do you really think the masses will benefit from this directive? The banks only care about there profit margin and the CBN is only afraid these exchange will expose that the Naira is far weaker than they report. My opinion though.
Do you really think the masses will benefit from this directive? The banks only care about there profit margin and the CBN is only afraid these exchange will expose that the Naira is far weaker than they report. My opinion though.