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CBN, banks, oil firm chiefs in crisis talks over forex

By on May 14, 2015

The Central Bank of Nigeria (CBN) on Monday held talks with oil companies and bank CEOs, largely to address issues around the supply of forex to the market, BusinessDay has been told.

A similar meeting was held yesterday, but on the present unhealthy dollarisation of the economy. Details were still unclear as at press time last night.

But Monday’s meeting essentially tried to address the challenges of the oil companies and ensure free flow of forex to the Nigerian market, sources close to the apex bank said.

The meeting was chaired by Godwin Emefiele, the CBN governor and some bank managing directors and executive directors in attendance.

Nigeria has faced an apparent shortage of supply of the dollars in the economy, particularly pre-general elections, as hoarding of the greenback spiked on political scare.

The situation had seen many firms resort to the money changers to source dollars, and was attributed to the significant drop in forex inflows, worsened by the drop in prices of oil- Nigeria’s main revenue source.

The CBN has been able to hold the naira at N197 to a dollar at the interbank market for a while, yet a lot of firms and individuals holding dollars are reluctant to sell, hoping that the naira would depreciate further.

The naira sold for about N219 to a dollar in the black market on Tuesday.

The CBN in February shut down its Retail Dutch Auction/Wholesale Dutch Auction Foreign Exchange window, directing all FX demand to the Interbank Market to check wide spread arbitrage, as well as guard the nation’s foreign reserves.

The CBN continues to assure of its readiness to meet ‘genuine forex demand’ and has been intervening where necessary at the interbank market,”the apex bank chief spokesperson, Ibrahim Mu’azu, told BusinessDay recently.

“A meeting took place today with oil companies and banks helmsmen, largely to address supply side of forex to the market,” the source told BusinessDay yesterday evening,” while noting that a major issue which the CBN expressed dismay with, was the misinterpretation of circulars to the advantage of the other parties.

It was learnt that the CBN equally raised concerns over the buck passing attitude between the banks and other forex players in the market.

 

[Business Day]