Monday, 3 August 2015

Briefly: Central Bank of Nigeria Stops Deposit of Foreign Currencies

The Deposit Monetary Banks (Commercial banks), in line with the Central Bank of Nigeria directive, have stopped their customers from depositing foreign currencies into their domiciliary accounts.

The banks’ restriction on the cash deposit of foreign currencies was necessary because of the persistent fall in the value of naira in the parallel market i.e. the black market. Banks have, however, flooded the parallel market with dollars and other foreign currencies to discourage large speculation on naira.

In the past few weeks, the naira had appreciated against the dollar from 245 to 220 at the parallel market and there is market speculation that the naira would likely appreciate further against the dollar in the coming week.

Meanwhile, the Central Bank  of Nigeria in its purview has "appropriately priced" the naira at its current level of 197 to the dollar on the interbank market and fixed the spread at which parallel market operators (Bureaux De Change) could sell dollars to individuals as well as limited the amount that bank customers would spend using their debits cards abroad.

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