ABUJA FEBRUARY 17, 2017 – The Central Bank of Nigeria (CBN) yesterday said it does not directly allocate foreign exchange (forex) to bank customers. Forex transactions occur between banks and their customers, the apex bank added.
Special Adviser to the CBN Governor on Financial Markets Emmanuel Ukeje stated this on a television programme while responding to allegations that the regulator was in breach of its foreign exchange administration policy.
He explained: “I want to state categorically that the CBN does not deal directly with any bank customer on any foreign exchange transaction. These transactions are purely between the deposit money banks and their customers.”
Ukeje was responding to a question that the CBN had been queried by Attorney General of the Federation and Minister of Justice Abubakar Malami (SAN) over its management of the foreign exchange policy.
Ukeje denied there was such a query from any quarters, stating that “neither the CBN Governor nor any department of the CBN received any communication from the Minister of Justice.
“But be that as it may, and for the avoidance of doubt, I want to say it is not out of place for any agency of government to seek clarifications on any information from other agencies of government. The CBN, however, as a responsive and responsible institution, will always provide such clarifications for the purpose of educating and enlightening all concerned.”
He said any rate disparity on forex transactions should not be blamed on the CBN because the figures are from transactions between the banks and their customers.
The apex bank has consistently ensured that banks are transparent in their forex dealings with customers.
He said the CBN publishes reports of purchases and sales of foreign exchange between deposit money banks and their customers as submitted by the lenders without editing the reports, adding that the practice of publishing the reports on CBN’s website started since last October.
He said the CBN had directed banks to render their forex transaction reports uniformly on a naira-dollar format. He said the banks source forex from other sources which could lead to selling at different rates.
Also yesterday, CBN Spokesman Isaac Okorafor, in a statement, said the figures of forex sale published in national dailies or on CBN website, over which insinuations are being formed, were transactions consummated between the DMBs and their customers.
“Pursuant to our policy of transparency, we publish the reports of purchases and sales of forex between the Deposit Money Banks and their customers, as submitted by the banks without editing. This practice of publishing the figures on our website has been on since October 2016,” he said, adding that following observations of different exchange rates after the last publication on CBN’s website, the regulator called for explanations from the banks concerned.
“In response to our queries to them, apart from some observed formatting errors, the concerned banks reported that the returns were sent on the basis which the transactions were conducted. The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61 kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported. The aforementioned are third currency transactions and when properly translated, will be in line with the prevailing forex rate range in the interbank market.
“Consequently, to prevent any such occurrence in the future, the CBN has directed all Deposit Money Banks to render their returns in a uniform format converting all forex sales and purchases to NGN/USD. All third currency transactions are also to be converted to NGN/USD. Again, we urge all concerned stakeholders to always verify information on matters relating to the Bank before going public in order not to trigger volatility in the market.”
Also, the CBN has disbursed $2.83 billion for utilization in the critical sectors of the economy between December 2016 and January 2017.
Okorafor said that manufacturing, raw material and agriculture among others topped these disbursements targeted at employment generating and wealth creating sectors of the economy.
He said $609 million and $228 million were released for raw materials in December and January respectively, while manufacturing also attracted the sum of $53 million and $71 million respectively during the same period.
He said the foreign exchange utilisation figure indicated that $1.839 billion and $0.989 billion respectively were extended to critical sectors like manufacturing, agriculture, petroleum products and airlines among others in December 2016 and January 2017, stressing the determination of the CBN to continue to ease the foreign exchange pressure on critical sectors.
The CBN in November 2016, supported critical sectors with $1,070,175,392.04 equivalent of foreign exchange for agricultural machinery, industrial raw materials, education and personal travel allowances to source industrial raw materials and spare-parts through the interbank foreign market.
