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Banks barred from selling dollars to BDCs at Interbank Market

By on October 31, 2014

As part of measures to strengthen the naira as well as to sanitise the operations of the forex market, the Central Bank of Nigeria (CBN) has barred commercial banks (authorised dealers) from selling its interventions funds in the interbank market to authorised buyers such as Bureaux de Change and hotels.

The central bank stated this in a circular with reference number TED/FEM/FPRB/GEN/01/020, dated October 28, 2014 obtained yesterday.

The CBN also directed that funds purchased through its interventions at the interbank market should be utilised within two working days of delivery, at a rate not more than 10 kobo above the purchase rate.
The CBN circular also directed that unutilised funds within two days of delivery should be returned to the Bank at the original purchase rates.

“The essence of the directives was to ensure compliance with the Net Open Trading Position limit and to ensure further control of the interbank market operations. It stated that any observed flouting of these directives will be appropriately sanctioned,” it explained.

In view of the dwindling prices of crude oil, the CBN Governor, Mr. Godwin Emefiele recently said the central bank would unveil plans to support price stability in the coming weeks.
Emefiele had assured Nigerians that both the fiscal and monetary authorities were taking measures that would make sure that country withstands any likely shock on the economy.
Meanwhile, the Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala has commended the CBN for being at the forefront of regularly fulfilling its statutory obligations to the government by prompt remittances of it surplus revenue to the Federation Account.

A statement quoted Okonjo-Iweala to have given the commendation at a public presentation of the 2015 -2017 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper to members of the Senate Joint Committee on Finance, National Planning and Poverty Alleviation on Monday.

Making her presentation, the minister proposed that, as part of the framework, “25% of gross revenues of Ministries, Departments and Agencies (MDAs) should be remitted off the top as part of the long-term strategy of enhancing Internally Generated Revenue (IGR) collection from MDAs and other organisations.

 

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