Why CBN will not freely float Naira
…Warns Banks, Employees Over Forex Illegalities
The persistent pressure on the Central Bank of Nigeria (CBN) to float the Naira may have lost steam as the experience of Egypt, which recently adopted the policy, has presented a poor result.
The policy choice mid wifed by the International Monetary Fund (IMF) has led to a spiraling inflation, leaving the country’s purchasing power worse than it was before the decision.
The IMF Managing Director, Christine Lagarde, who expressed concern over Egypt’s continued challenge after the policy yesterday at the ongoing IMF/World Bank Spring meetings, has urged the country’s economic managers to do more on structural reforms to enthrone stability.
Meanwhile, CBN has again warned commercial banks over complaints and frustration of customers by denying them access to foreign exchange. Besides, the apex bank said it needs evidence from customers to be able to hold banks accountable and consequent sanctions that may arise from the breach of rules.
CBN’s Acting Director of Corporate Communications Department, Isaac Okorafor, while speaking to journalists, said if Egypt, with its level of infrastructure and foreign exchange receipt of $12 billion could face such issues that are unanticipated, then CBN would be right in its decisions.
Okorafor further reminded banks that there are sanctions for breach of rules. Warning that sanctions may loom, he said the weight of the law would depend on the type of action and offence committed by the banks and could involve the staff on duty at that time, and could go on to the chief executive officers of the bank.