Over two weeks after the Central Bank of Nigeria , CBN, promised to clear over $10bn foreign exchange debts owed to the Deposit Money Bank, the apex bank has yet to do so as slumped further against the Dollar.
The immediate past acting CBN Governor, Folashodun Shonubi, on September 6, 2023, said the apex bank had concluded negotiation on dollar debts with commercial banks, disclosing that all forex exchange backlogs would be cleared within one to two weeks.
According to him, deposit money banks have assisted the apex bank to clear the majority of its overdue FX forward contracts at maturity.
However, multiple top bank executives said three weeks after the promise, the apex bank had yet to make good its promise.
They said the development had put banks in a very tight FX liquidity position, a situation that has made many lenders to temporarily suspend several FX transactions including school fees and Personal Travel Allowance applications.
READ ALSO: CPPE advises new CBN governor to suspend Naira redesign policy
Findings show the situation has also worsened dollar liquidity at the parallel market as bank customers’ shift to the black market to meet their forex needs.
On Friday, pressure mounted on the naira at the black market with BDC operators in Lagos, Abuja and Kano lamenting dollar scarcity,
An Abuja-based BDC operator, Sanusi Ibrahim, said, “We sold the naira for as high as 1,000/$ on Saturday. On Friday, we were buying and selling for 980/$ and 995/$.”
Another BDC operator, who is based in Ikeja, Yusuf Kareem, said, the naira was sold for 995/$. It is scarce; I cannot sell below that because I also bought it expensive. Only those who have it can sell.”
READ ALSO: New CBN governor, Cardoso must restore confidence in Nigeria’s FX market–CPPE
At the parallel market, Pound Sterling was bought and sold for £1,235/ and £1,250/, while Euro was bought and sold for 1,025/€ and 1,028/€, according to operators in the segment of the market.
On the Investor & Exporter forex window, the naira however appreciated to 747.76/$ at the close of Friday, from 772.98/$ on Thursday.
The President, Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, said the volatility of the local currency had continued to underpin the nation’s slow economic growth.
He said, “The high demand pressure at the 1&E window and the parallel market due to lack of sufficient liquidity have been fuelling the widening gap between the I&E Window and the parallel market rates.
According to him, the uncertainties and loss of public confidence on the local currency has heightened demand pressure in all segments of the market.