Banks Start Dollar Sale as CBN Tackles Parallel Market

Banks Start Dollar Sale as CBN Tackles Parallel Market

By Chuks Emele

Nigerian banks are starting direct sale of foreign exchange to customers today as the Central Bank of Nigeria tries to tame the street market that has tended to ignore its policy signals.

Several banks have already sent out messages to their customers to indicate their readiness to meet all foreign-currency requests backed by appropriate documentation.

“Getting forex should be stress free,” First Bank said in a note to its customers, saying it was ready with dedicated foreign-excjange tellers, as directed by the CBN, to meet the requests.

CBN Governor Godwin Emefiele announced last week that the regulator was ending sales to exchange bureaus, accusing them of engaging in money laundering and other malpractices. The central bank also said it was ending further licensing of such bureaus and will refund application fees paid by intending promoters of such operations.

The naira plummeted on the back of the news in the parallel market, with people anticipating shortages, exchanging at a record 525 naira to a dollar at one point from the previous 506 naira. The losses have pared somewhat to around 515 naira.

If the Central Bank’s decision makes foreign exchange easily available from the banks, it’s expected the naira will gain further as speculative pressures ease.

Nigeria’s monetary authorities are keen to see a unification of exchange rates, a key requirement of the World Bank for disbursing loans approved for Nigeria, which had operated a multiple exchange-rate system since President Muhammadu Buhari came to power in 2015.