The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has on Tuesday described the act of withdrawing money to buy dollars as an illegal action, adding that security agencies in Nigeria will arrest people found engaging in such an act.
Godwin Emefiele stated that continuous action of such sets back the apex bank’s efforts in addressing the lingering forex scarcity in the country.
What they are saying
The CBN governor said that in addressing the acts by politicians and high-profile individuals, the apex bank would build an unbeatable surveillance system that will track the conversion of Naira to Dollar in the Nigerian financial system.
Speaking further, Godwin Emefiele said “we are monitoring customers and banks and any bank involved would be sanctioned. We will place Post no Debit on the defaulting customer’s account. It is a very injurious tool to stop you from conducting illegal flows, either domestic or foreign currency. We will conduct investigations, and we will have proof and you will not be able to conduct transactions in any Nigerian bank.”
What to watch
With the discovery that the conversion of naira to dollar is illegal, Nigerian businesses, entrepreneurs and individuals would have to rely on local commercial banks to meet their forex quota. However, reports say Nigerian banks struggle to meet 30% of their customers’ forex demand as Nigeria has limited inbound forex sources. This implies these banks could face an overwhelming demand for dollars.
What you should know
- Nigerian commercial banks placed a $20 daily cap on debit cards in a bid to save naira from further doom.
- The Central Bank of Nigeria has for months stopped the sale of forex to Bureau de Change operators in the country.