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.
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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.
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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.
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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.