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Report: CBN Identifies How Banks, Traders Play Roles in Naira’s Fall to N1,200/$, Reveals Next Move
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Report: CBN Identifies How Banks, Traders Play Roles in Naira’s Fall to N1,200/$, Reveals Next Move

by  Dave Ibemere 2 min read
  • There is hope on the horizon for the naira against the US dollar at the foreign exchange markets
  • The CBN has set its eyes on banks and black market traders as it moves to help the naira recovers
  • The apex bank has also identified some of the reasons naira is depreciating, and efforts to sanction defaulters

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The Central Bank of Nigeria is reportedly planning a new set of sanctions targeted at banks and black market traders.

The Nation reports that the apex bank will probe Deposit Money Banks for hoarding foreign exchange and engaging in round-tripping.

naira to dollar exchange rate
The CBN new management team's major challenge is the free fall of naira Photo credit: CITI
Source: Facebook

The exchange rate gap between the official and black markets is currently over N400, with one dollar selling at N808 officially and N1,200 unofficially.

The report claimed that some banks are speculating, purchasing from the official window and selling for profit in parallel markets.

Read also

FG announces forex automation plan to fish out those behind naira fall as dollar crosses N1,200

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Part of the report reads:

"This activities is sabotaging government’s effort to halt the free fall of the naira"

Also, a Bureau De Change (BDC) operator accused banks of hoarding dollars to make huge profits.

Another source in the CBN added that speculators are keeping piles of dollars with plans to trade for massive profits in future deals.

It was further revealed that the CBN plans to comprehensively address the issues of speculation through heavy sanctions on defaulting banks and BDC operators.

“Government through the CBN, plans to probe bank hoarding and roundtripping with heavy sanctions awaiting defaulters.
"This is because the apex bank believed hoarders – banks and black parallel operators- are responsible for the artificial scarcity that is driving up forex rates. Government plans through the CBN, is to address the issues of speculation comprehensively and through heavy sanctions."

Read also

“It is not us”: ABCON reveals those behind naira free fall as one dollar sells for N1,200

"No more N1k": BDC operators agree on new dollar to naira exchange rate

Legit.ng also reported that Bureau de Change dealers want to crash the dollar across the country.

ABCON initiated the move in support of the CBN efforts to stabilise the naira at the foreign exchange market

The wide disparity between the black market and the official exchange rate has been a genuine concern for the CBN.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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