The naira continued its upswing at the parallel arm of Nigeria’s
foreign exchange market as it closed at N209 to $1 on Monday evening as
banks continue to reject dollar deposits in customers’ domiciliary
accounts. The current black market rate is a significant improvement
compared with the N225 to a dollar the currency went for as at Friday.
The
development has resulted in excess dollar supply in the market, a
situation that has left currency speculators and some BDC operators
confused. “We don’t know what is happening in the market and nobody
knows where it is headed to,” Mallam Shittu, a BDC operator in Marina,
Lagos, said. Banks
in the country have temporarily stopped accepting
payment of dollar cash by customers into their domiciliary accounts as
they move to avoid currency risk. Godwin Emefiele, CBN governor, said in
an interview with THISDAY on Monday that the decision to suspend
payment into domiciliary accounts was in order.
Emefiele had
explained that the decision by the banks to stop collecting foreign
currencies into their vaults was not taken by the CBN, but that the
central bank was in support of the idea. “
You cannot go to the United
States where the dollar is spent and try to pay pound sterling into an
account, because you will be arrested. Neither can you go into the
United States and carry Euros into that economy and tell them to pay it
into an account for you; you will be arrested. The same way
you cannot go to the United Kingdom where pound sterling is their unit
of currency and then you carry dollars or Chinese Renminbi and try to
pay into an account, because you will be arrested. “So when you look at
why the banks took the decision, the banks decided to take that line of
action because they felt that the level of foreign currency that had in
their vaults was above the optimum level that they could manage,” he had
explained. The naira had fallen to about N243 to a dollar in July, as a
result of the Central Bank of Nigeria’s restriction of the funding of
41 items, including toothpicks in the official market.
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