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Naira Strengthens, as Bank CEOs Pledge Support for New CBN FX Policy

The naira appreciated to N520 to a dollar on the parallel market on Thursday, stronger than the N525 to a dollar it closed the previous day. The appreciation came as

The naira appreciated to N520 to a dollar on the parallel market on Thursday, stronger than the N525 to a dollar it closed the previous day. The appreciation came as Chief Executive Officers (CEOs) of banks promised to support the new foreign exchange (FX) measures of the Central Bank of Nigeria (CBN) and the regulator’s effort to achieve FX stability.

On the Investors and Exporters’ (I & E) FX window, the naira closed at N411.67 to a dollar on Thursday.

CBN also said it will commence the refund of capital deposits and licencing fees, where applicable, to Bureau De Change (BDC) promoters who had pending licence applications before Tuesday’s announcement of the end of FX sale to the currency dealers.

The apex bank insisted it would not rescind the ban on FX sale to BDCs. Director, Monetary Policy Department, CBN, Dr. Hassan Mahmud, said this Thursday when he featured on Arise Xchange.

Meanwhile, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, reacted Thursday to the CBN’s policy announcement. Gwadabe said the association would engage with the banking sector regulator to address and resolve all the issues that led to the ban on FX sale to its members.

CBN Governor Godwin Emefiele had disclosed the end of FX sale to BDCs while briefing journalists at the end of a two-day meeting of the Monetary Policy Committee (MPC) in Abuja on Tuesday. He directed all commercial banks to immediately create designated branches for the sale and disposal of FX to eligible customers for legitimate purposes. He also said the CBN will no longer process or issue new licences for BDC operations in the country, adding that all licences being currently processed, regardless of the stage, had been suspended.

The CBN governor said the bank would now channel weekly FX allocations, hitherto meant for BDCs, to commercial banks.

Speaking Thursday during a virtual media briefing, Chairman, Body of Bank CEOs, Herbert Wigwe, said authorised financial institutions in the FX market would ensure full compliance with the CBN directives in order to ensure FX stability. Wigwe said customers could walk into their banks to purchase dollars for legitimate transactions. He noted that the banks had agreed that the process would start immediately following a meeting with the CBN.

Wigwe, who is also Group Managing Director of Access Bank Plc, said the banks were ready to meet the mandate of the CBN, adding that they have more than enough capacity to deliver. He explained that the process would be centralised to avoid abuse.

The Access Bank GMD pledged that the banks would ensure that the measures that had been put in place were not disrupted and abused, saying, “We will also be doing verification of the Bank Verification Number (BVN).”

In addition, Wigwe said banks yet to adhere to the mandate by the regulator to create a forex desk would be sanctioned.

According to him, “The banking industry is willing and ready to carry out this function. As you are aware, the bank has very strict compliance measures in terms of Know Your Customer (KYC). For us at Access Bank, we will ensure that all our branches meet the requirements.

“If you look at all the banks, you would agree with me that the banks have more than enough capacity to deal with the mandate of the CBN. “If we see non-compliance issues, we will report to the CBN and the law enforcement agencies. So if people intend to do things, such as coming with a second passport and other things, we will report them to the law enforcement agencies.”

He added, “We feel that what the CBN has done is worthy of commendation because people will have access to different channels to collect their BTAs and school fees required for their children.

“The banks have a lot more channels to assist the customers get access to forex, depending on where they are, even if they are in Enugu or Port Harcourt.”

In his remarks, Chief Executive Officer, Guaranty Trust Bank, Segun Agbaje, expressed the readiness of the bank to begin implementation of the mandate given by the CBN. Agbaje assured customers that the banks had the resources to fund the process, adding that they have collectively agreed to start immediately.

He also stated that different banks had different processes, therefore, banks should examine their controls, and what worked for them.

Agbaje said, “There is a lot of abuse around FX, so you will find out that some of the better controlled systems are centralised, while some are decentralised. Customers should not panic, there would be availability of forex, and the banks will run a very transparent process.”

James Emejo in Abuja, Nume Ekeghe and Ugo Aliogo in Lagos

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