By Uche Amunike
The Acting Governor of the Central Bank of Nigeria, CBN, Mr Folashodun Shonubi, has stated that the CBN was working in collaboration with other banks to clear the backlog of foreign exchange that still remained unsettled, in the next two weeks.
He made this disclosure while advising on the role that players in the foreign exchange market, especially the Bureau De Change (BDC) segment of the market should play, so as to see that there is liquidity in the system.
He stated that both the CBN and commercial banks in Nigeria have been working towards clearing the backlog that was placed between $2 billion and $2.5 billion. Hear him: ‘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.’
He continued: ‘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 per cent 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.’
He further explained that there is so much foreign exchange that is being made available to customers through the banking system that people are ignorant about. The significant thing, according to him, is that it does not come to the CBN, neither does it appear as a part of the demand that comes to them.
According to Shonubi, the CBN had ended its investigation and was about clamping down on Crown Agent for involvement in illegal foreign exchange dealings, among other agents. He confirmed that there were many players dealing foreign exchange in unofficial ways.
His words: ‘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.’