The Central Bank of Nigeria has clarified the illegality of converting the Naira to other currencies.
Reactions have trailed the CBN’s governor Godwin Emefiele’s statement that bank customers converting naira to the dollar would be prosecuted.
The CBN has however clarified the statement noting that the caution does not apply to those exchanging currencies for legitimate purposes but to individuals seeking to convert naira in their accounts into foreign exchange (FX) for political campaign purposes.
In a media chat, its Director, Corporate Communications Department, Osita Nwanisobi, said the clarification was necessary following what he described as an attempt to deliberately misrepresent the Governor’s caution against electioneering spending and speculative activities.
According to Nwanisobi, the warning by the CBN Governor was to those who seek to convert the local currency from their accounts into FX for election campaigns and not those who need dollars for justifiable reasons such as payment for tuition and other personal expenses.
Reiterating the position of the bank, the spokesperson said the CBN also frowned at the conduct of unauthorised movement of funds within and outside the country and was determined to invoke necessary provisions of the law to check the movement of illicit funds.
Maintaining that the apex bank, in line with its mandate, has discretionary power to prevent persons from conducting illegal transactions, Nwanisobi said the CBN was within its statutory limits to mop up the excess liquidity in the vaults of the institutions it regulates to stem speculative activities.
He urged customers not to get involved in the unauthorised movement of funds for currency conversion to guard against breaking relevant laws.
Nwanisobi also called on Nigerians to be more patriotic to preserve the value of the naira, noting that every citizen must support the CBN in this regard.
Meanwhile, the naira continues on an extremely volatile path at the black market and peer-to-peer window, hitting an all-time low (ATL) of N650 to a dollar at the latter as of yesterday. Parallel market rates are still far above N600/$, raising doubt if the dollar would retreat to below N600 at the window anytime soon.
The rising value of the dollar in the international market may be reflected in the local currency market. The US Dollar Index (DXY), a metric for measuring the value of dollars against a basket of other currencies, has remained bullish in the past few weeks.
