The Central Bank of Nigeria (CBN) yesterday ordered all banks to open foreign exchange (Forex) kiosks at major airports and approved outlets.The order was issued barely 24 hours after The Guardian exclusively reported that passengers were stranded at the international airports on account of dollar scarcity.
The move is to ease acute Forex scarcity and reduce the wide gap between the official and parallel markets to enhance efficiency. It also indicates that the apex bank has stepped up the foreign exchange liberalization plan, as it switched back to an earlier policy of selling dollar through banks.
Yesterday, the regulator said in a statement that it would now provide direct funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, with immediate effect, a few days after the National Economic Council (NEC) ordered it to review the policy.
The exchange rate for such retail transactions has also been pegged around 20 per cent of the prevailing interbank (official) market rate.A statement from CBN spokesman, Isaac Okarafor, read in part: “In continuation of efforts to increase the availability of foreign exchange in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, the CBN is providing direct additional funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, effective immediately. The CBN expects such retail transactions to be settled at a rate not exceeding 20 per cent above the interbank market rate.”
Responding to the development, the Acting President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, said the move “to sell invisibles at 20% above interbank rates to end-users by CBN, hopefully will add confidence in the market.”
He, however, hoped that banks would be directed to sell a “certain percentage of interbank sources to BDCs at 20% margin. This, to me, will be lucrative for banks to do and at the same time put the liquidity in the market.”
He added that given its capacity to adequately meet the critical retail needs of the market, “the injection of additional liquidity to the BDCs subsector will definitely have a wider positive impacts on naira.”
A sub-Saharan Economist at Rencap, Yvonne Mhango, in a note to The Guardian, expressed optimism that the foreign exchange policy may be up for adjustment in the short term, given key developments in the economy.
“But we think the most probable outcome of a forex policy adjustment is a managed float, possibly a new peg, but a full float is unlikely. We heard this was being ‘fine-tuned’.
“Making the interbank FX market work is key for the central bank. Improved liquidity, a smaller premium between the parallel and interbank rates, price discovery, and transparency would signal success,” she said.
COPYRIGHT: http://guardian.ng/news/cbn-moves-to-ease-forex-scarcity-at-nations-airports/
No comments:
Post a Comment