Breaking: CBN speaks on ‘stopping sales of FX to banks’

The Central Bank of Nigeria has no immediate plans to ban sale of forex to banks, according to a senior executive at the apex bank who spoke to Nairametrics.

This follows reports by several media outlets, including Nairametrics, who reported that the central bank planned to stop sale of forex to banks by end of the year. Several reports quoted a statement by Godwin Emefiele verbatim as he responded to questions at the end of the Bankers Committee meeting held on Thursday, February 11, 2022.

According to Mr. Emefiele, the CBN will stop banks from coming to the CBN for foreign exchange and will direct them to the export proceeds market where they can match their import needs with export proceeds.

Emefiele said, “The era is coming to an end when, because your customers need 100million dollars in foreign exchange or 200 million dollars, you now want to pack all the dollars and pass it to CBN to give you dollars.

“It is coming to an end before or by the end of this year. We will tell them don’t come to the Central Bank for foreign exchange again, go and generate your export proceeds.

“When those export proceeds come, we will fund them at 5% for you and they will earn rebait. Then you can sell those proceeds to your customers that want 100 million dollars. But to say you will continue to come to the Central Bank to give you dollars, we will stop it.

“Nigeria cannot continue to depend on FX earnings to fund its import obligations from revenue coming from earnings from products where we cannot determine both price and quantity.’’

CBN official clarifies statement

Nairametrics put a call through to a senior CBN Executive who was present at the briefing over the statement seeking to provide more clarity on the statement. However, the official explained that the Governor was merely painting a hypothetical scenario that should have been the ideal state of affairs if banks focused more on export proceeds as a source of forex rather than depending solely on the CBN.

“The CBN is an institution and does not make policy based on verbal responses to a question. The Governor was only responding to a question and was painting a hypothetical scenario. So, there are no plans to stop the sale of forex to banks this year. Such plans are usually well-crafted policies that go through several consultations especially with banks before they are even made public. Recall, we just got out of a meeting with top bank executives where several presentations were made by several committees and nowhere was the issue of stopping the sale of forex to banks discussed,” the CBN official said.

Nairametrics asked if an official statement will be issued to clarify the alleged “misinterpretation” of Mr. Emefiele’s remark to which the official remarked, “this may not be necessary as the banks who are even affected the most know this was not what Mr. Emefiele meant.”

-Nairametrics