Nigeria, world’s biggest importer of US dollars –Sanusi

Nigeria has become the world’s biggest importer of United States dollars. Central Bank of Nigeria, CBN, Governor, Mallam Lamido Sanusi, made the disclosure yesterday.

He noted that the situation had to be reversed. Speaking in Abuja after the 234th meeting of the Monetary Policy Committee, Sanusi expressed worry over suspected money laundering activity through the bureaux de change segment of the forex market and said the CBN was determined to curb such abuses and keep the naira stable 

According to him, new guidelines that would make transactions at the bureaux de change, BDC, market more closely monitored and spell out stiffer penalties for infractions of the guidelines.

Sanusi said the move became necessary in view of perceived lapses within the BDC sub-sector of the foreign market in recent times and the need to ensure strict compliance with the rules in the market.

Sanusi, who also disclosed that the Committee decided to retain the Monetary Policy Rate, MPR, at 12 per cent with a corridor of +/-200 basis points around the midpoint, 50 per cent CRR on public sector funds and 12 per cent on private sector deposits, said most of the decisions taken at the meeting were informed by developments in the domestic and global economic environments, particularly to sustain macroeconomic stability in the economy.

Although the governor did not give details about the proposed policy measures, he however confirmed that the issues that would form the object of the guidelines will be how to curtail the incidence of money laundering, avoid multiple exchange rate regime and spikes that will create arbitrage and also prevent the likelihood of the country becoming the highest importer of the US dollar globally. He explained: “We will come out with policies in the near future; I am not going to tell you the details.

You must remember that one of the challenges we have is that we are dealing with some of the policies that get in the way of each other. We need to stop the money laundering.
We need to reduce the amount of cash dollars through BDCs and at the same time we need to make sure that we do not have a multi exchange rate regime and spikes that will create arbitrage.

“There has to be a whole set of policies that are looked at carefully and pursued with a lot of determination. We think there is something absolutely wrong with BDCs buying hundreds of millions of dollars and not being able to account for them. We think that these monies are not being used for importation of goods and services. We think they are a part of a money laundering exercise and we would have to deal with it.

“We also think that the whole policies around massive withdrawals and deposits of cash should now move from naira to dollars and we have to stop the situation where Nigeria has become the highest importer of US currency in the world.
In the next few weeks, you will see a sector with new policies from us. I know there would be a lot of resistance from outside but again, what’s new?” Sanusi asked.
On the recent rumblings within the discount houses, he said the CBN was already taking steps to investigate the operations of the entities, adding that with the recent revocation of the licence of Express Discount House and establishment of the soundness of two others investigated, there are no causes for alarm.
According to him, CBN examiners had already moved into Express Discount House with a view to determining the extent of fraud perpetrated there, assuring that no depositor would lose their deposits as all unsecured depositors of the company would be paid within this week.
“We have taken comprehensive review of various discount house activities which resulted in the recent revocation of Express Discount House which further led to total review of their activities.

“We discovered that Kakawa and Associated Discount Houses are in good form and their shareholders – First Bank, GTB, FCMB, Access Bank- are also doing well, but in the case of Consolidated Discount House, there appears to be a massive fraud and misrepresentation of accounts and we have taken action.

“We have examiners in there trying to know the extent of damage over there. We, however, assure its depositors that we will pay all unsecured deposits by the end of this week. No depositor is going to lose any money in that discount house”, Sanusi assured. CDL is owned by First Bank of Nigeria Plc, Mainstreet Ltd, Skye Bank Plc, Union Bank of Nigeria Plc, CDL Cooperative and Williams Street Trustees Ltd.

Sanusi also restated the apex bank’s commitment to ensure Naira exchange rate stability by adopting appropriate monetary policies to protect the currency from the vagaries of the foreign exchange market but that this agenda would not be pursued at all cost.

He clarified further: “My view and that of the CBN is if we need to tighten money, use some of our reserves to support economy we will, no CBN Governor will say he will support currency at all cost. But we want to be very clear that there is no country that allows its currency to just be determined by market.

“We are not looking for a stronger currency neither are we looking at a weaker one. People want to pay fees and investors want to know that they will have returns for their investments. We will use reserves, we will use interest rates, we have gone through the difficult months, hopefully the next few months will not be difficult. We will not allow the naira to be weakened and we are committed to that,” Sanusi added.

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