·CBN to clear backlogs in two weeks, plans clampdown on illegal operators
The volume of foreign exchange (FX) currently sitting in local commercial banks is three times what is available in the vault of the Central Bank of Nigeria (CBN), the Acting Governor of the monetary authority, Adebisi Shonubi, has revealed.
The volume has placed the bank in position to clear outstanding FX obligations in the next two weeks.
At a briefing in Lagos, the CBN boss said the apex bank has taken concrete steps, working with local banks on various structures, to expedite actions on clearing the huge backlogs.
This would help attract FX inflow into Africa’s largest economy, improve liquidity in the Nigeria Foreign Exchange Market (NIFEX) window, increase offshore participation and boost foreign investors’ confidence in the country, the CBN hopes.
Analysts have argued that the unification of all official FX windows alone is not sufficient to stabilise the market and reduce/eliminate participation in the parallel market, with supply low and huge uncleared outstanding.
Shonubi said: “On the backlog, the local banks have been working with the CBN on various structures to clear it. There is a large amount of the obligations that the banks in Nigeria have already taken up.
“So, what happened was that at maturity, they made the forex available for those who needed to use it like the importers. Some customers still have their obligations and part of the restructuring with the banks in Nigeria is to also clear that backlog.
“It is something we have been discussing for a while. Today we still intervene in the market, it is not as if it has affected our ability to make monies available to banks in the NIFEX market but when we look at volumes, the CBN today contributes less than 25 per cent to the FX market because the CBN does not want to be a regular player but more of intervening to stabilise the rate and that is where we are going.”
According to him, the volume of FX currently available with the banks is quite significant and currently three times what is currently in the CBN coffer.
In addition, Shonubi said Bureau de Change (BDC) operators that fail to convert into electronics would be phased out of the system. This will reduce the heavy cash transactions.
He said the new measure would help to differentiate between the regulated BDCs as opposed to the ones the CBN does not regulate.
He said the CBN would clamp down on companies that collaborate with international agencies to bring dollars into the country illegally.
