As the Central Bank of Nigeria (CBN) struggles to stabilise the currency exchange rate, its Governor, Godwin Emefiele, has accused some local and foreign investors of buying dollars from the parallel market, popularly referred to as ‘black market’.
A dollar was sold for N460 at the parallel market on Wednesday, which is higher than the interbank rate of N361 to a dollar. More so, the dwindling oil prices caused by the Coronavirus pandemic have greatly affected the country’s economy and have reduced the dollars in circulation.
The situation was also compounded by the suspension of sales of foreign exchange to Bureau de Change operators by the CBN.
NEWS DIRECT reports that the investor and exporters window is also badly affected by the liquidity crisis in the foreign exchange market.
However, since the demand for dollars by importers, foreign investors in the debt market who want to repatriate their funds, is higher, many have resorted to buying from the parallel market, which takes its toll on the country’s economy.
The Virtual Meeting
In video footage seen by NEWS DIRECT, the apex bank’s Governor warned the investors against buying dollars from the parallel market.
He spoke at a virtual meeting held sometime in May 2020, with some foreign and local investors including Africa’s richest man, Aliko Dangote; Huawei, a telecommunications company and Herbert Wigwe, the managing director of Access bank group. Mr Emefiele said: “We’ve seen your account already but we are appealing to you to stop and do what is right and what is legal so that Nigeria can be a better place for you to live in.”
“Don’t go into illegal business. Do your business legally and make your money. I repeat and I know it. I know some of you are involved. Stop now! By you going to the parallel market, you are helping to overheat that market.”
He also spoke about the implications, which is losing their earnings as a result of overheating the market.
“Not only that you’ll lose money (because you would have bought at a price that is not realistic)… I can tell you that you are going to lose money.”
“We are seeing some of those transactions and I feel I need to call you guys for this meeting let us talk. Don’t overheat the market by sounding desperate and buying dollars at those exorbitant prices.”
He then promised that the apex bank will provide more liquidity for the investors to stop patronising the parallel market.
“We have taken note of some of you- on what you need. Go ahead and do your business. Nothing will stop your forward. Your forward will be at the committed price. We are going to provide more liquidity to the market so that you people can stop going to the parallel market. Don’t go there!” he said.
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