简体中文
繁體中文
English
Pусский
日本語
ภาษาไทย
Tiếng Việt
Bahasa Indonesia
Español
हिन्दी
Filippiiniläinen
Français
Deutsch
Português
Türkçe
한국어
العربية
Abstract:INVESTIGATING BANKS AND BDCS FOR SUSPECTED FX SABOTAGE
· Obasanjo and Others Offer Remedy for FX Scarcity and Naira Depreciation
INVESTIGATING BANKS AND BDCS FOR SUSPECTED FX SABOTAGE
Despite the fact that low foreign exchange input is the actual cause of Nigeria's present foreign exchange deficit, the Central Bank of Nigeria has initiated procedures to start investigating Deposit Money Banks for suspected foreign exchange hoarding and roundtripping. It was revealed that any bank found to be undermining the government's attempts to stop the Naira's fast decline and support the national currency would face sanctions.
This occurred because it's thought that certain banks are engaging in speculation by buying foreign exchange through the Investors & Export window and then profitably selling it on the black market. Anonymity-seeking Bureau De Change (BDC) operator revealed that banks are hoarding cash to generate enormous profits. He claimed that hoarding had contributed to the unification of currency markets failing to produce the desired results for the Federal Government. “A few banks are engaging in speculation by buying from I&E and reselling on the parallel market for a profit. Thus, the CBN's attempts to stop the Naira's decline are being hampered by artificial demand that is raising currency rates, the operator stated. A CBN insider did add, though, that speculators are holding large sums of money with the intention of trading them for enormous gains in subsequent transactions. However, the insider revealed that the CBN intends to use severe fines on failing banks and BDC operators to address the speculative issues in a comprehensive manner. ”The government intends to investigate bank hoarding and round tripping with severe sanctions awaiting defaulters through the CBN. This is because the central bank thought that banks and black market operators, who engage in hoarding, are to blame for the fictitious scarcity that is raising currency rates. The government intends to tackle the problem of speculation thoroughly and with severe sanctions through the CBN.
The International Monetary Fund (IMF) and the World Bank had approved the unification but insisted that further work is necessary before the full benefits could be realized.For this reason, the CBN recently issued a directive prohibiting banks from using the proceeds of the revaluation to cover operating costs or dividend payments. Strict penalties can compel failing institutions to release foreign exchange, the person stated. However, rumors have it that the CBN's easing of currency restrictions on 43 commodities and the apex bank's action by partially paying backlongs owed to some businesses and airlines may cause the Naira to appreciate against the dollar in the coming days. Economists have stated that lifting the limitations would mean importers of the goods that are prohibited wouldn't have to turn to the black market, which would relieve pressure on the Naira.
A LONG-TERM FIX FOR NIGERIA'S CURRENCY CRISIS
According to former President Olusegun Obasanjo, Nigeria could transition from a mono-economy characterized by reliance on oil to non-oil exports, particularly agribusiness, in order to overcome its foreign exchange (forex) issue and the depreciating value of the Naira. During the culmination of a week-long intensive “Agribusiness Export Readiness Accelerator Training Programme” for entrepreneurs from all around the nation, Obasanjo made the claim in Abeokuta. This happened after Lead City University in Ibadan's Prof. God-win Oyedokun, a financial expert, stated that the weak economic fundamentals, low foreign reserves, growing external loans, and a dual forex window were the main causes of the nation's forex market issues. He continued by saying that the Naira currency rate has been eroded by a heavy reliance on oil revenue and a lax fiscal strategy. He suggested that Nigeria's forex crisis might be resolved by diversifying the economy, increasing foreign reserves, enforcing fiscal discipline, implementing a foreign exchange policy, and being able to maintain debt. “In order to strengthen its export base and lessen its reliance on oil, Nigeria must diversify its economy. This can be accomplished through growing additional industries including manufacturing, services, and agri-culture.In order to stabilize its currency, Nigeria must increase its foreign reserves. The government ought to prioritize growing exports of goods other than oil and luring in foreign capital.implementing responsible fiscal policies to boost the economy, such as transparent budgeting, proper fiscal constraints, and careful expenditure. ”To help remove the distortions in the forex market, the government should create and implement a forex policy that addresses the problems of the parallel market in Nigeria. “Instead of borrowing for ongoing expenses, the government should strive toward prudent and sustainable debt management, where the borrowed funds are applied to sound economic projects that generate income for repayment and the nation's overall development,” the speaker said. In a same vein, during her speech at the 39th Omolayole Management Lecture (OML) in Lagos, President of the International Association of Students in Economics and Commercial Sciences (AIESEC) Alumni Bunmi Abejirin asserted that in order to alleviate the foreign exchange problem, Nigerian consumers should support anything produced in her country. She said, “Nigerians must consciously cut their roles in the crisis by beginning to have a taste for everything made in Nigeria, even though the government is doing everything it can to address foreign exchange issues.”
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
The Italian regulator, CONSOB has issued a warning against five websites offering unauthorized financial services. This regulatory action aims to protect the public from fraudulent activities.
A recent allegation against STP Trading has cast doubt on the firm's business practices, highlighting the potential risks faced by retail traders in an increasingly crowded and competitive market.
Cross-border payments are now faster, cheaper, and simpler! Explore fintech, blockchain, and smart solutions to overcome costs, delays, and global payment hurdles.
The UK Financial Conduct Authority (FCA) has issued a public warning regarding a fraudulent entity impersonating Admiral Markets, a legitimate and authorised trading firm. The clone firm, operating under the name Admiral EU Brokers and the domain Admiraleubrokerz.com, has been falsely presenting itself as an FCA-authorised business.