It is illegal to withdraw naira to buy dollars — Emefiele

By Aduragbemi Omiyale

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Elefiele, has warned bank customers, especially politicians and high profile personalities, to refrain from withdrawing naira for the purpose of converting them into dollars just for good.

He called the action illegal, which he said was capable of destroying the economy of the country as the nation is doing its utmost to solve the persistent shortage of foreign exchange (forex), which is depleting the value of the naira very quickly. against the greenback in the currency. market.

Speaking to reporters in Abuja on Tuesday, Emefiele said the apex bank will put in place a formidable surveillance system that will track the illegal conversion of Naira into Dollar in the Nigerian financial system.

According to him, anyone involved in this case would be prevented from using the country’s banking system as a Post No Debit would be placed in the defaulting customer’s bank account.

He also added that any bank found to be assisting in this illegal act would be sanctioned by the country’s banking sector watchdog.

Mr Emefiele said this warning has become necessary as the country enters the election season and political actors would like to mop up currencies from the system to continue with the 2023 general elections, leading to further depreciation in the value of the local currency. .

Business post reports that an effect of this law was felt in May and June when political parties held primary elections to choose their presidential candidates. Dollar as very rare in the various segments of the foreign exchange market, especially in the parallel market, pushing the exchange rate over N600/$1 as the hard currency was allegedly used to woo delegates.

Tuesday, the Naira lost N7 or 1.13% against the dollar in the black market to quote at N625/$1 from N618/$1 the previous day and in the Peer-to-Peer (P2P) segment it fell N11 or 1.75% to to sell at N640/$1 in contrast to Monday’s value of N629/$1.

There are fears that the Nigerian currency could crash to N700 ahead of next year’s elections and, probably sensing this, the CBN wants to take action to avoid this as it could collapse the economy.

“As far as we are concerned, we monitor the liquidity in the subsystem. We will use our powers to mop up the money and for those who take money from the banks to buy dollars, it is illegal to do so. If the security agencies detain you, you will know what that entails,” Mr Emefiele said yesterday.

Speaking further, he said: “We are monitoring customers and banks and any bank involved would be sanctioned. We will place Post No Debit on the account of the defaulting customer. It is a very harmful tool to prevent you from conducting illegal streams whether domestic or foreign. We will investigate, and we will have evidence and you will not be able to transact at any Nigerian bank.

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