CBN Will Not Float The Naira, Reverses Cashless Policy
The Central Bank of Nigeria (CBN) has described as laughable suggestions that the Naira should be floated and subjected to the vagaries of market forces. The Acting Director of Communication of the CBN Mr Isaac Okorafor was reacting to calls at the ongoing Spring Meetings of the IMF here in Washington that Nigeria should float the naira and liberalise the market. He stressed that Nigeria’s economic environment is extensively liberalised and therefore makes the call to float the naira a bit laughable in our case.
“Yesterday, when Madame Lagarde was discussing the economy of Egypt, she lamentedthe devastating inflation that is in that country. Egypt has half of Nigeria’s population, Egypts receives about 12 billion in foreign aids and several billions in tourism.
We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to benefit from massive depreciation.
If we fl oat the naira today, and given the discoveries by security agencies, you’ll discover that our case will be terrible. If Egypt today has an inflation rate of almost 31 percent, remember Angola also has about 36 percent inflation, ours is at 17.26.If we float the naira and we allow speculators and those with corruption money and all the people who create the bubbles to launch into the market, you can yourself imagine the kind of situation we will find ourselves
Of course, you should also know that no country floats its currency; just leaving it to the dictates of the market.
We want to appeal to you to help explain this to people. Our economy has its own peculiarities, and we cannot kill our people in the name of floating the naira
In the mean time, following reports that some commercial banks are frustrating the foreign exchange requests of Small and Medium Enterprises (SMEs), the Central Bank of Nigeria (CBN), has warned that drastic measures will be taken against such acts that it described as deliberate efforts to sabotage the economy.
The apex bank’s Ag. Director, Communications, Mr. Isaac Okorafor issued this warning in Washington United States of America where he is attending the ongoing IMF Spring Meetings.
He said that the CBN has been receiving reports from entrepreneurs that banks are frustrating their efforts at obtaining FOREX for their eligible imports after the stipulated 48 hours. He advised such victims of the antics of banks to ensure they make a photocopy of the form X, A, or M submitted to the erring bank and lodge a complaint, and promised that CBN would surely take action with such evidence.
Okorafor expressed regret that some customers had merely made oral or written complaints without evidence upon which the CBN could redress the situation and punish erring banks .
The text of the statement reads: You will recall that recently we introduced a window to be able to give forex to SMEs, which, incidentally, is the engine of growth in our economy, for them to be able to obtain a small amount of forex that suits their businesses and we have received complaints now that banks are frustrating them.
We have reviewed all these complaints and found out that the affected SMEs do not have evidence the CBN can act on. We want to use this opportunity to appeal to customers of banks and the SMEs to please give us concrete evidence against these banks so that we can hold them responsible by way of sanctions.
Get a photocopy of your Form Q, Form X, Form A or Form M. Give us the name of the bank, branch and send to us all tgese informaton and we will will make examples of erring ones.
We also say to all Nigerians that the only way we can make things better for all of us is to call the CBN whenever there is policy infraction by anyone no matter how highly placed. We have a number you can call 07002255226 or you send an email to our Consumer Protection Department on firstname.lastname@example.org. We want to urge everyone who is frustrated by banks to call and lay complaints. We assure you will get redress.
Meanwhile, the apex bank has suspended its earlier directive on the implementation of cashless policy.
In a circular released yesterday, the apex bank instructed banks to revert to old charges and refund customers who had been debited.
CBN had earlier announced new charges on deposit and withdrawals above a threshold of N500,000. The apex bank had directed banks to charge 5% and 10% for deposits and withdrawals above N40m in the corporate category.
The bank had fixed 1.5% and 2% for deposits ranging from N500,000 and N1 million in the individual category.
But in the circular signed by the director, banking and payments system department, CBN, Dipo Fatokun, said the existing policy before the announcement of the new policy shall remain in place in Lagos, Ogun, Kano, Abia, Anambra, Rivers and Abuja.
“You will recall that a directive was issued on the nationwide implementation of the cashless policy vide our circulars with reference numbers BPS/DIR/GEN/CIR/04/001 dated February 21 and BPS/DIR/GEN/CIR/04/002 dated March 16,” the circular read.
“Please note that the new withdrawal and deposit processing fee charges above the threshold, as contained in the circulars referenced above, are hereby suspended until further notice. The position of the policy shall now revert to the status quo ante.”
The old charges to be reverted to 3% processing fee for withdrawals above N500,000 in the individual category and 5% for withdrawals above N3 million.
“The new policy already applied effective April 1, 2017 as contained in the circulars in reference above should be reversed and the old charges be applied. All necessary refunds should be made accordingly.”
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