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Nigeria's apex bank lauds crackdown on parallel market

Xinhua, November 22, 2016 Adjust font size:

Nigeria's apex bank on Tuesday endorsed the crackdown on parallel market traders by the officials of the Department of State Services (DSS) across the country.

The foreign exchange regulation in the country forbids trafficking in currency, Godwin Emefiele, the Central Bank of Nigeria (CBN) governor told reporters at the end of its Monetary Policy Committee (MPC) meeting in Abuja, the nation's capital.

He said the DSS had the rights to enforce the law and make sure that currency hawkers are forced out of the "illegal trade."

The apex bank chief, who said it was demeaning for traders to hawk currency on the streets, urged the traders to legitimize their business by applying for Bureau De Change (BDC) licence.

Officials of the DSS had raided the parallel markets in Lagos, Abuja and Onitsha over alleged arbitrary sale of forex.

The raid, which worsened U.S. dollar scarcity at its wake, had forced the naira to settle at 465 naira to one dollar.

Meanwhile, the Senate said it will reject a proposal to punish people for keeping foreign currency for more than 30 days.

"We are surprised at a recommendation by the Nigerian Law Reform Commission for a review of the Nigerian Foreign Exchange Act in order to empower the Central Bank of Nigeria to jail people for up to two years or fine them for 20 percent of the amount of the foreign currency held in their possession for more than 30 days," said Aliyu Abdullahi, the Senate spokesperson.

Abdullahi described the measure as disruptive and counterproductive and will undermine many of the reform efforts already underway in the legislature and by government ministries intended to boost investor confidence.

According to him, the Senate would never pass such a punitive and regressive proposal.

He said a market-oriented exchange rate policy is the best recipe for guiding the operations of the foreign exchange market which would ensure the supremacy of market mechanisms in efficiently allocating the scarce forex resources. Endit