The Acting Governor of the Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi, has revealed that the CBN is collaborating with commercial banks to settle the outstanding foreign exchange (FX) backlog, estimated to be between $2 billion and $2.5 billion within the next two weeks.
Shonubi stated this in Lagos while speaking on the role players in the foreign exchange market should play to ensure there is liquidity in the system, especially the Bureau De Change (BDC) segment of the market.
He said, “We have been working at the Central Bank with commercial banks on various structures to clear it. As a matter of fact, there’s a large amount of the obligations that the banks in Nigeria have already taken off.
“So what happened was at that maturity, they actually made the FX available for those who needed to use it, the importers and what have you. So, we are discussing with them so that we can restructure their own.
“Some customers who still have their own obligations with their banks are being addressed by the banks and our structure with the banks in Nigeria was to clear that backlog. It is something we’ve been discussing for a while and we expect that we will clear it within the next one or two weeks.
“Today we still intervene in the market. When you look at the volumes, the CBN today contributes less than 25 percent to the FX market. Years ago, the CBN did not want to be a regular player but more of intervening to stabilize the rates and that is where we are going.
“There’s so much FX that people do not talk about that is being made available through the banking system that banks are sending to their customers. It does not come to the CBN and it does not appear as part of the demand that comes to us and it is significant.”
He also noted that CBN had concluded its investigations and was set to clamp down on Crown Agent and other institutions involved in illegal FX transactions.
He added, “For the last few weeks, we have been investigating and there’ll be quite a number of players out there that have been bringing in money and selling in less than official ways.
“One of those that we have investigated recently is Crown Agents. We have reason to believe that Crown Agents have been working with international agencies who rather than bring the money through the normal system, pass through them and they will then sell to Nigerian companies rather than doing the proper thing.
“They can expect to hear from us shortly and they will not be the only ones. Also, BDCs that cannot go electronic will be fading out of the system because we do not believe that we should still be heavy into cash.”
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