CBN To Sanction Customers Converting Naira To Dollar

The Central Bank of Nigeria (CBN) yesterday read the riot act to bank customers, especially politicians, converting naira to the dollar as electioneering spending spike.

The CBN, which also raised interest rate from 13 per cent to 14 per cent, said it was monitoring liquidity in the financial system.

Governor of the apex bank Godwin Emefiele stated this during the Monetary Policy Committee (MPC) meeting in Lagos.

Emefiele said the CBN would place A “Post no Debit’ on the account(s) of any customer violating its rules.

Emefiele said: “As far as we are concerned, we monitor liquidity in the subsystem. We will use our powers to mop us cash and for those taking money from banks to buy dollars. It is illegal to do so. If the security agencies hold you, you will know the implication of that.

“We are monitoring customers and banks, any banks involved will be sanctioned. We will place Post no Debit on the defaulting customer’s account. It is a very injurious tool to stop you from conducting illegal flows, either domestic or foreign currency.

“We will conduct investigations, and we will have proof and you will not be able to conduct transactions in any Nigerian bank.”

The CBN boss added that the MPC increased the Monetary Policy Rate (MPR)- benchmark interest rate from 13 to 14 per cent; retained the asymmetric corridor at +100/-700 basis points around the MPR; Cash Reserve Ratio (CRR) at 27.5 per cent; and Liquidity Ratio at 30 per cent.

He noted also that the rise in inflation was affecting the purchasing power of the people but added that it was not peculiar to Nigeria.

According to him, inflation in several advanced economies pushed higher and further away from the long-run objectives of their central banks

Emefiele stated that the trend reflected the sustained increase in the price of food, energy, and other commodities due to the harsh combination of persisting supply chain disruptions and pent-up demand.

According to him, the committee noted with concern, the persisting uptick in headline inflation (year-on-year) to 18.60 per cent in June 2022 from 17.71 per cent in May 2022, an 89-basis point increase in just one month.

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