Why ban on 41 items would remain in place – CBN

Governor of Central Bank of Nigeria, Godwin Emefiele, says the ban on 41 items from official foreign exchange market would be intensified because it has led to remarkable success in domestic production of goods.

At the 53rd Charted Institute of Bankers Nigeria (CIBN) dinner held on Friday, Emefiele threatened to report both banks and companies that flouted the law, to the Economic and Financial Crimes and Commission (EFCC).

Emefiele also disclosed that the CBN’s economic intelligence and banking supervision departments would work closely with the EFCC.

“The CBN’s Economic Intelligence and Banking Supervisions department will collaborate, and work very closely with the EFCC to expose and sanction any bank, any company or its directors, or FX operator that colludes with unscrupulous individuals or companies to undermine the policy on 41 items. The prohibition and sanction shall be extended to smugglers of banned items.”

In addition to facing the EFCC, the CBN Governor reeled out several sanctions, including banning those cuaght from operating bank accounts in Nigeria.

Emefiele also maintained that the apex bank would continue to keep the exchange rate stable, despite growing pressure.

“The CBN has so far managed to maintain a stable exchange rate, the current capital flow reversals from emerging markets, is expected to continue to exert pressure on market rates. This pressure could be amplified by the forthcoming elections, especially as political space heats up.”

The Naira recently hit N370 on the parallel market, perhaps prompting the CBN to introduce additional FX allocations to BDCs from next week.

Despite the pressures, he maintained the CBN would keep rates at their current range.

“Notwithstanding these pressures, the CBN is determined to maintain its stable exchange rate stance over the next few months, given the relatively high level of reserves. Gross stability is expected in the FX market, given oil inflows and import bill.”

“I would like to make it categorically clear, that sustaining a stable foreign exchange rate is of overriding importance to us at the CBN, even as we continue to put measures in place to shore up our reserves.”

During the last Monetary Policy Committee (MPC) meeting for the year held last month, the CBN Governor had hinted at a possible expansion of the list of banned items.

At the CFA Investor conference also held last month, Emefiele had warned speculators not to bet on a possible devaluation of the currency.