Ezekwesili tackles CBN on approach at forcing down exchange rate

Former Vice President of the World Bank, and ex-while Minister of Education in Nigeria, Mrs. Oby Ezekwesili, has taken a swipe on the Central Bank of Nigeria (CBN) and its Governor, Mr. Godwin Emefiele on the approach adopted at bringing down the value of the exchnage rate of the Naira, describing the CBN’s foreign exchange policy as a medieval .
She communicated through its twitter handle on Monday, as the CBN slashed the rate at which it was selling dollars to Bureau De Change (BDC) operators nationwide at N360 about 10.8 per cent slash to the dollar.
According to her, Emefiele stumbled on a new trick to force down rates. “So he’s going to test it to destruction until it stops working “.
She speaks further: “Rather than a sound focus on the REAL Exchange Rate of the Naira, there is unhealthy & unwholesome obsession with its Nominal Rate.
“The worst FX Policy is when monetary authorities play to the gallery of their Political authority to make Nominal Value THE ISSUE.
“Every Currency that goes up can come down through SOUND monetary policy. But, every Currency that comes down by FORCE will go up”.
“True that I had said no more comment on the medieval FX policy but please what is this latest 1 about”, referring to the press release issued by the CBN on Sunday.
Once upon a time, it came from Oil “Subsidy”. Today it comes from FX policy of “Strengthen ₦” If it looks like duck & quacks like a duck.
“The rent seeking merely mutated from one form to another–i.e. from “Subsidy on Fuel” to ” FX Subsidy” in the name of “Naira strengthening”.
“Ehen. Make we dey look the “economic policy invention”. The sad thing is the ultimate consequence is NEVER on “them”. she twitted.
The CBN press statement on Sunday which Ezekwezili was reacting to, goes thus: The Central Bank of Nigeria (CBN) has reiterated its determination to sustain the provision of foreign exchange with a view to ensuring liquidity in the market and enhance accessibility and affordability for genuine end users.
The apex bank’s acting Director, Corporate Communications; Mr Isaac Okorafor in a statement on Sunday said that the bank wants to disabuse the notion by market speculators that it wouldn’t be able to sustain its forex intervention.
He said that the bank would again, early this week, inject more foreign exchange into the market, leading to a further weakening of the dollar.
“This is in addition to the further increase in the sale of dollars to the Bureau de change operators from 8,000 dollars to 10,000 dollars per week,’’ he said
Okorafor warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end users.
According to Okorafor, the CBN had received complaints from customers over frustrations in getting foreign exchange for invisible items like tuition fee, medicals, personal and basic travel allowance.
The Bank urged the general public to report it to any bank that failed to meet customers’ needs after due documentation.
It once again reiterated its determination to deal with any official or institution found to be sabotaging the operations of foreign exchange market in whatever guise.
It would be recalled that the Naira closed at N394 to a dollar on Friday, which translated to 10 per cent depreciation of what was recorded earlier in the week.
The depreciation was attributed to the alleged hoarding of forex by banks rather than selling to genuine customers.
Analyst believe that with the twice weekly sale to BDCs up to 20,000 dollars, the Naira is likely to appreciate in the coming week.
Meanwhile, the apex bank has released an emergency mobile phone line for customers denied access to foreign exchange by banks for medical bill and school fees.
It also made public email address for immediate complaint against any commercial bank that denies a customer access to foreign exchange.
The customers have been advised to either call 07002255226 or send an email to cpd@cbn.gov.ng. The provision is made particularly for customers buying foreign exchange for school fees and medical fees.
“Any customer who is not attended to within 24 hours for BTA/PTA or 48 hours for tuition and medical fees should call 07002255226 or send an email to cpd@cbn.gov.ng,’’ CBN said.
The apex bank said the aggrieved customer should name the bank and branch of the non-cooperating bank.
“Furthermore, no customer should accept to buy FOREX from any bank at more than the currently prescribed rate of N360/$1” CBN statement added.
CBN debunked claims by some banks that it was not selling enough foreign exchange to them for BTA, PTA, tuition and medical fees.
Okorafor, advised customers to report any defaulting bank as necessary sanctions would be invoked on erring banks.
He said that information reaching the apex bank show that some customers seeking to buy foreign exchange for BTA, PTA, medical and school fees were being frustrated by some banks.
These banks, he said, give false claim that the CBN was not allocating enough foreign exchange to them for such purposes.
“All banks have more than enough stock of FOREX their possession for the purpose of meeting genuine customers’ demands for BTA, PTA, tuition and medical fees. “Indeed, on a weekly basis, the CBN has been selling at least $80 million to banks for onward sale to their customers for these invisible items.
“Thus, members of the public seeking to buy FOREX for the above-mentioned purposes are therefore, advised to go to their banks and obtain their FOREX,” he said.
It would be recalled that the International Monetary Fund (IMF) last week advised the Nigerian government on ways to ease its economy out of recession. It urged Nigeria to lift its remaining foreign exchange restrictions and scrap its system of multiple exchange rates and boost investor confidence and help the economy on its way to recovery.