With the exchange rate between the naira and dollar merged with huge volatility, which is currently at N665/$1, this has no doubt prompted bank customers and high-profile individuals to withdraw the naira and convert it to dollar for keeps.
Displeased with this act, the Central Bank Of Nigeria (CBN), through its Governor, Mr. Godwin Emefiele has issued a warning to bank customers, most especially politicians and high profile individuals to desist from withdrawing Naira with the purpose of converting money into Dollars just for keeps.
He described such an act as illegal which he disclosed was capable of wrecking the nation’s economy as the naira is consistently making efforts to resolve the lingering foreign exchange (Forex) scarcity, which is depleting the value of the naira at a rapid rate against the greenback in the currency market.
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Mr. Godwin Emefiele disclosed the plan of the Central Bank to put in place a formidable surveillance system that will track the illicit conversion of the Naira in Nigerian banks. He revealed that anyone caught in such an act would be prevented from making use of the banking system in the country, as a post no debit (PND)would be placed on the account of customers who default.
This means that with PND, such customers will never be able to conduct banking transactions in any of the financial systems in Nigeria. The CBN governor also stated that any Nigerian bank found to be aiding such an illegal act would be sanctioned by the country’s banking industry watchdog.
It has been reported that such a warning from the Central Bank became more necessary due to the huge volatility of the Naira that forces people to illegally convert it, and also with the preparations for the upcoming 2023 Presidential election in top gear, it is believed that a lot of politicians in Nigeria would seek to mop up FX from the system by stacking up dollars for electoral purposes which will no doubt cause the Naira to lose its value.
The effect was felt in May and June when different political parties in the country, conducted their primary elections to choose their preferred presidential candidate. It was reported that the dollar became scarce in the parallel market which saw it rise to N600/$1 as the dollar was used by these politicians to woo delegates.
Due to panic amongst Nigerians, after it was predicted that the naira would possibly crash to N700 before the end of this year, a lot of them have started converting their naira to dollars for keeps. This is why the CBN has set out to monitor liquidity in the subsystem, as anyone involved would be sanctioned and handed over to the security agencies.
The Central Bank has therefore admonished bank customers in the country to desist from getting involved in such illicit conversion in order not to fall victim to the CBN order. He also urged them not to panic despite the fact that the naira and dollar have been merged with high volatility, noting that every citizen has to support the CBN in preserving the value of the naira from further depreciating.
