CBN Joins Forces With Nigerian Banks To Battle Currency Speculators

The Central Bank of Nigeria has formed a coalition with its stakeholders to clamp down on currency speculators who profit from round-tripping and other currency manipulation practices.

Bank CEOs expressed their appreciation by pledging support for the new foreign exchange measures coming from the Central Bank of Nigeria (CBN) and its efforts to stabilize foreign exchange.

At the parallel market, the naira recouped losses when it appreciated N520 to a dollar late Thursday, up from the previous day’s close of N525 to a dollar.

Market commentators have attributed the pressure facing the naira at the parallel market as well as the Investors and Exporters (I&E) forex window to currency speculators hoarding the greenback.

Yesterday, Godwin Emefiele, the Governor of the Central Bank, ordered all banks to set up teller points at designated branches so they could, in turn, fulfil legitimate FX requests for travel allowances, business allowances, tuition fees, medical payments, and SME transactions, among others.

In a presentation at the webinar, Access Bank’s Managing Director and Chief Executive Officer, Herbert Wigwe said, “The banking industry is willing and ready to assist with this function.”

Compliance measures are very strict at the banks, such as confirming eligibility and performing verifications.

“We expect that all banks in Nigeria will be able to meet these requirements. The banks have more than enough capacity to do this if you look at all their branches nationwide,” he added.

The Access Bank GMD promised that appropriate safeguards for the bank’s information would be in place to prevent disruptions and abuses of the system. He explained that the bank would also verify the Bank Verification Number of FX applicants.

Banks that fail to create a forex desk as mandated by the regulator will be sanctioned, Wigwe said.

This function will be handled by the banking industry, which he said is ready and willing. Bank compliance measures, such as Know Your Customer (KYC), are very strict. Access Bank aims to comply with all of these requirements at all of its branches.