Naira rebounds, now N208 to dollar as CBN moves against illicit financial flows

The Naira at the weekend appreciated against major currencies, especially the dollar, which exchanged for between N206 and N210 at the parallel market on Sunday.

The currency, which had lost up to 20 per cent of its value recently when a dollar exchanged for N245, responded to series of policies churned out by the Central Bank of Nigeria (CBN).

As part of efforts to further strengthen the naira, the apex bank, at the weekend, vowed to move against illicit financial flows.

The CBN policies which have seen Naira firm up have, however, brought untold hardship on Nigerians on vacation abroad as they find it difficult to make withdrawals from their domiciliary accounts from outside the country.

In its plan to properly price the Naira, the apex bank had been tweaking its foreign exchange policies.

The tweaking saw the CBN excluding 41 items from having access to the forex window. The bank, also last week, compelled bureau de change operators to get the BVN of their customers.

The most recent of the policies is the resolve by commercial banks not to accept dollar deposit from domiciliary account holders, while also stopping them from making withdrawals from their accounts outside the bank premises.

This, in effect, means the cancellation of electronic transfer and ATM withdrawals for domiciliary account holders.

A message from one of the deposit banks to its domiciliary account holders sighted by the Nigerian Tribune read in part: “Please, be informed that due to the unavailability of outlets for managing foreign currency cash deposits, we have found it necessary to temporarily suspend receipts of foreign currency cash deposits into domiciliary accounts at all our branches nationwide from Monday, August 3, 2015.

“In addition, foreign currency cash deposits into domiciliary accounts made prior to this notice will not be eligible for outward electronic transfer and can only be withdrawn as cash.”

According to Mr Ladi Balogun, MD/CEO, First City Monument Bank, banks opted to reject dollar deposit “due to large speculation on the currency,” adding that it was part of efforts to save the Naira.

The policy has, however, subjected many Nigerians on holiday or short visit abroad to untold hardship, as many of them, who had planned to use their ATM cards for payment abroad, had been unable to do so.

One of such people who spoke with the Nigerian Tribune lamented that she had gone through hell in the past few days, as she had been unable to make essential purchases and pay for services because her ATM card had been disabled.

According to her, “I don’t think it is fair to subject honest citizens to such hardship. Before taking such decisions, it is just fair for those in charge to communicate with those concerned, so that they will know what is happening.

“I came here (Europe) hoping to make use of my ATM card for my purchases, only to discover a few days ago that I couldn’t make use of my ATM card. I even tried to get money wired to me from Nigeria, but that too couldn’t be done.

I can’t understand why such important decision had to be taken without informing those who would be affected by it.”
The woman, who pleaded not to have her name in print, noted that while no effort should be spared to save the naira, honest citizens should not be made to suffer unnecessarily.

Meanwhile, the CBN, at the weekend, expressed concern over a report by the Global Financial Integrity Group, ranking Nigeria as one of the 10 largest countries for illicit financial flows in the world.

According to a statement signed by Ibrahim Mu’azu, its Director of Communications, CBN said although it did not have an independent confirmation of the assertion, the report claimed that about $15.7 billion of illicit funds go through the country annually.

“In the light of this avoidably negative commentary, we wish to draw the public’s attention to several protocols on illicit fund flows, money laundering and terrorism financing both in Nigeria and around the world.

“We warn that the CBN will increase its vigilance to ensure that Nigerian banks are not used as conduits for illicit fund flows, especially in foreign currencies.

“We note and applaud that in line with global best practice, Nigerian banks have started to curtail the acceptance of foreign currency cash deposits, much the same way as customers in other countries cannot just walk into banks and make foreign currency cash deposits without proper documentation,” the statement read.

The apex bank assured Nigerians seeking foreign currencies for legitimate personal and/or business interests that “there remains ample opportunity to do so within the law.”

CBN said it would continue to support the services of bureau de change operators to small-scale users provided such meet genuine needs and the BDCs’ documentations to the CBN include the customer’s Bank Verification Number (BVN).

[Tribune]