Mr. Godwin Emefiele, Governor of CBN

Forex Rate: CBN clarifies Naira value not decided by parallel market

*We have been very open about the market price determination factors in the market, and the CBN has no hand in price determination ─Godwin Emefiele, Governor of Central Bank of Nigeria

Isola Moses | ConsumerConnect

In clarifying the application of the extant fiscal and monetary policies in the economy, the Central Bank of Nigeria (CBN) has labelled the Foreign Exchange (Forex) parallel market as tainted and a channel for bribery and corruption.

Mr. Godwin Emefiele, Governor of CBN, has decried analysts’ assumption to use parallel market figures as the country’s official exchange rate.

Emefiele, who stated this after the Monetary Policy Committee (MPC) meeting Tuesday, November 24, in Abuja, FCT, said “for the information of everybody, the parallel market as far as we know, is a shallow market in Nigeria with no more than five per cent of market share.

“Parallel market, is a tainted market where people who desire to deal in illegal foreign exchange transactions, including sorting of Forex, cash-in for purposes of offering bribes, corruption that is the deal.”

The CBN Chief while describing as unfortunate remarks by analysts that the exchange rate is N480/$ (US Dollar), stated: “The parallel market is a market where people who don’t want to provide documentation to support their transactions deal in, and it cannot be the basis to determine the value of our currency.

“Everybody knows and it is accepted that the Forex market which is predominantly the I and E window is the market that should be used to determine the exchange rate of our Naira.”

As far as the CBN is concerned, “today net FX ranges between 380/386/387, and we have been very open about the market price determination factors in that market,” said Emefiele.

He pointed out that the CBN has no hand in price determination in that market.

“The exchange rate is determined by forces of demand and supply in the FX market, we don’t agree that determining factor for exchange rate in Nigeria for our currency should be based on a market that is tainted and where people go to pay any bribe.

“We are not going to be party to that and we will continue to say this to anyone, or body that cares to listen,” said he.

Meanwhile, Emefiele explained that the CBN would be increasing its COVID-19 intervention to N300 billion to accommodate more Nigerians.

He added: “We have been advised by the MPC that given that this has been very impactful positively, that the CBN should do more: we put 50 billion on the table.

“We have so far disbursed over N149 billion to 317,000 beneficiaries, and we have been told that we have to increase it not just from N149 that it is now but to increase it to almost about N250-N300 billion.”

According to him, the increase is intended “to accommodate more people that have not accessed this facilities but we do insist that this must be done in a way that it goes round because we found out that some zones are more represented than others.”

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