The Central Bank of Nigeria (CBN) is upbeat about the naira finding its true value within the shortest possible time and strongly supports the latest decision by banks to stop further receipt of foreign exchange cash deposits from customers to reduce huge idle cash in their vaults.
Moses Tule, CBN director of monetary policy, insisted Monday there was no going back on the new FX policies since recent developments show that the naira, which was almost heading to N250/$, was only artificially driven by speculators to make more gains.
Tule indicated that the apex bank would beam more light on Bureau De Change (BDC), where naira speculation had thrived.
“We are going to take the foreign exchange policy far because the government supports what the central bank is doing in this respect.
“And we did not direct banks to stop accepting dollar cash deposits from customers, but we support what they are doing,” Tule told BusinessDay Monday in an exclusive interview.
The naira firmed to N250 to the dollar at the BDC on Monday afternoon, but Tule said, “there is no magic. We noticed that people started a serious business of currency substitution that is making the naira to seize being the legal tender in the country in preference to foreign currency. But now, the banks have gone to their wit’s end.
“They have too much foreign exchange and they have no avenue of pushing it out.”
He further said they saw that in the volume of foreign currency deposits in the banks and that people preferred to hold foreign currency to naira, which put a lot of pressure on the foreign exchange market and the naira to meet FX demand.
He said that demand the central bank later discovered was pent-up and also had no relationship with the documentations that were presented.
He insisted that the underlying factors fuelling the demand were that people were requesting for foreign exchange and converting it and putting into their domiciliary account.
“People were round tripping, demanding official foreign exchange and using it to round trip and make profits for themselves.
“But now that the chips are down the banks are saying, we longer have the tills to accommodate additional foreign exchange, we will give you naira and because there is excess supply of foreign exchange, that is why the price is crashing,” he said.