Worried by the continued widening gap between the inter-bank foreign exchange and parallel market rates, the National Economic Council, NEC, on Thursday demanded the immediate review of the current foreign exchange policy by the Central Bank of Nigeria.Nasarawa State Governor, Tanko Al Makura, who briefed journalists at the end of the meeting in Abuja said the Council, presided by Acting President Yemi Osinbajo, expressed serious concern over the current situation of the exchange rate, especially the gap between inter-bank and the parallel market rates.
The council therefore called on the CBN Governor, Godwin Emefiele, to do something immediately.
The National Economic Council has as members governors of the 36 states, as well as CBN governor. It is headed by the vice president.
Prior to the introduction the flexible foreign exchange policy June last year, the exchange rate for Naira stood within a band of N197 and N199 to the dollar.
But, the removal of the exchange band, which was expected to increase supply of the dollar and help the nation’s weak economy, lessened government controls on the exchange rate.
While the government retained partial control at interbank and BDC rates, while the parallel market rate spiraled over the past months.
Since then the gap between the interbank (the official rate) and parallel market rates has been widening, raising concerns.
While the interbank rate stood at N280 to the dollar on the first day of the unveiling of the policy by the CBN, the parallel market rate was as high as N310 to the dollar.
Since then, the rate has been on the upswing, with interbank rate standing at about N305.50 to the dollar on Thursday, against the parallel rate of N510 to the dollar.
However, the CBN Governor at the meeting pleaded for patience and understanding, assuring that the situation was being closely managed.
During the Monetary Policy Committee meeting in January, Mr. Emefiele had said despite claims that there were almost seven different exchange rates in the country, the only rate recognised by CBN was the official inter-bank rate.
Meanwhile, following reports that the bank was queried by the Attorney General of the Federation and Minister of Justice over issues relating to the sale of foreign exchange, its spokesperson, Isaac Okorafor, denied that neither the CBN governor nor the Director, Legal Services Department had received any communication to that effect.
Mr. Okorafor said as a responsible and responsive arm of government, the CBN would “always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned.”
He said CBN had no direct dealings with any bank customer on foreign exchange transactions, pointing out that such transactions were always consummated strictly between the customers and their respective deposit money banks.
The figures of foreign exchange sold, he explained, had always been published in national dailies or on its arguing that transactions referred to in the publication were those between the banks and their customers.
Consequently, the CBN directed banks to ensure that henceforth returns on foreign exchange allocations in third currencies, such as Japanese Yen and South African Rand, Euros, Dollars should be reported in a new format approved by the CBN.
“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,” Mr. Okorafor said.
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