Central Bank of Nigeria (CBN) Issues Warning Over Illicit Naira Conversion

With the naira to dollar exchange rate merged with huge volatility, which is currently at N665/$1, this has undoubtedly prompted bank customers and VIPs to withdraw naira and convert it to dollars. for real.

Unhappy with this act, the Central Bank of Nigeria (CBN), through its Governor, Mr. Godwin Emefiele, has issued a warning to bank customers, especially politicians and high profile personalities, to refrain from withdrawing naira for the purpose of converting them into dollars. just to keep.

He called such an act illegal which he said was capable of destroying the economy of the country, as the naira is constantly trying to solve the persistent shortage of foreign exchange (Forex), which depletes the value of the naira at a fast pace relative to the greenback. in the currency market.

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Mr. Godwin Emefiele unveiled the Central Bank’s plan to put in place a formidable surveillance system that will track illicit Naira conversion in Nigerian banks. He revealed that anyone caught in such an act would be barred from using the country’s banking system as a No Debit Item (PND) would be placed on the account of defaulting customers.

This means that with PND, these customers will never be able to bank in any of the financial systems in Nigeria. The CBN Governor also said that any Nigerian bank that aided in such an illegal act would be sanctioned by the country’s banking sector watchdog.

It has been reported that such a warning from the Central Bank has become more necessary due to the huge volatility of the naira which forces people to convert it illegally, and also with the preparations for the upcoming presidential election in 2023 speeding up. higher, it is believed that many Nigerian politicians would seek to mop up the currencies of the system by hoarding dollars for election purposes, which will undoubtedly cause the naira to lose value.

The effect was felt in May and June when different political parties across the country held their primary elections to choose their preferred presidential candidate. It was reported that the dollar became scarce in the parallel market, which saw it surge to 600 naira/$1, as the dollar was used by these politicians to woo delegates.

Due to the panic among Nigerians, after it was predicted that the naira might fall to N700 before the end of this year, many of them have started converting their naira into dollars for good. This is why the CBN set out to monitor the liquidity of the subsystem, as anyone involved would be disciplined and handed over to security agencies.

The Central Bank has therefore urged customers of the country’s banks to refrain from getting involved in such illicit conversion so as not to fall victim to the CBN’s order. He also urged them not to panic despite the naira and dollar merging with high volatility, noting that every citizen must support the CBN to preserve the value of the naira from further depreciation.