CBN Makes a U-Turn, Says it is Not Stopping the Sale of Forex to Banks

• The Central Bank of Nigeria seems to have backtracked on their plan to stop the sale of forex to Nigerian banks
• A senior official at the CBN said the governor of the bank was misconstrued by many media reports, including Legit.ng
• The official who spoke to Nairametrics said that what the governor meant was that the banks should put in efforts at sourcing forex from external sources and not only from CBN

Twenty-four hours after the story broke that the Central Bank of Nigeria will, effective end of 2022, stop selling foreign exchange to banks, the apex bank has said it was exactly what it meant.

According to a report by Nairametrics, the CBN does not plan to stop the sale of forex to banks any time soon, the website quoted a senior official at the bank.

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Reports were rife in Nigerian media including Legit.ng on Thursday, February 10, 2022, that the CBN will halt the sale of forex to banks at the end of 2022.

The media reports quoted the CBN governor, Godwin Emefiele directly as he answered questions from reporters at the end of the Bankers Committee meeting on February 10, 2022

The CBN helmsman had said the apex bank will prevent banks from coming to it for foreign exchange and will point them to the export proceeds market where they can match their needs with export proceeds.

Emefiele had said:

“The era is coming to an end when, because your customers need 100million dollars in foreign exchange or 200 million dollars, you now want to pack all the dollars and pass it to CBN to give you dollars. It is coming to an end before or by the end of this year. We will tell them don’t come to the Central Bank for foreign exchange again, go and generate your export proceeds. When those export proceeds come, we will fund them at 5% for you and they will earn rebait. Then you can sell those proceeds to your customers that want 100 million dollars. But to say you will continue to come to the Central Bank to give you dollars, we will stop it."

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“Nigeria cannot continue to depend on FX earnings to fund its import obligations from revenue coming from earnings from products where we cannot determine both price and quantity.’’

CBN official clarifies statement

According to Nairametrics, a senior CBN Executive who was present at the briefing explained that the Governor was merely painting a hypothetical scenario that should have been the ideal state of affairs if banks focused more on export proceeds as a source of forex rather than depending solely on the CBN.

The official said:

“The CBN is an institution and does not make policy based on verbal responses to a question. The Governor was only responding to a question and was painting a hypothetical scenario. So, there are no plans to stop the sale of forex to banks this year. Such plans are usually well-crafted policies that go through several consultations especially with banks before they are even made public. Recall, we just got out of a meeting with top bank executives where several presentations were made by several committees and nowhere was the issue of stopping the sale of forex to banks discussed."

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The website had asked if an official statement will be issued to clarify the alleged “misinterpretation” of Emefiele’s remark to which the official said it may not be, necessary as the banks who are even affected the most know this was not what Emefiele meant,” the website said.

The backend story

Legit.ng reported that the Central Bank of Nigeria (CBN) has indicated that it would discontinue the sale of foreign exchange to Deposit Money Banks (DMB) by the end of the year.

This is as the apex bank has said that the banks must begin to source their forex from export proceeds, hence the need to support the non-oil sector of the economy, Channels Tv reports.

CBN Governor, Godwin Emefiele, made this known at the end of 364th Bankers Committee meeting on Thursday, February 10, 2022.

Source: Legit.ng