The Central Bank of Nigeria, CBN, has accused some commercial banks of breaching its regulatory limit on foreign currency borrowings, which is responsible. The apex bank had increased the foreign currency borrowing limit for lenders from 75 per cent of their respective shareholders’ fund to 125 per cent.
But the CBN said the banks failed to take all $100 million foreign exchange, forex, allocations it offered to them.
The demand for forex by authorized dealers reduced considerably as the dealers were only able to pick $45 million out of the $100 million offered by the apex bank on wholesale spot.
This is attributed to the level of forex pumped into the system by the CBN. Experts believe that this may cause the dollar to crash in the nearest future.
The dollar has also crashed against major currencies since President Donald Trump’s surprising declaration that China is not manipulating the value of the yuan.
Isaac Okorafor, acting director of Corporate Communications, CBN, said the major the interventions of the CBN during the week were aimed at providing access to all stakeholders with legitimate need for forex. “The CBN remains upbeat that the forex market will remain liquid and that Nigerians who genuinely require the forex will get ample access to the currency,” Okorafor explained.