It’s Illegal to Withdraw Naira to Buy Dollar—Emefiele

July 20, 2022
Godwin Emefiele Naira

By Aduragbemi Omiyale

Governor of the Central Bank of Nigeria (CBN), Mr Godwin Elefiele, has warned bank customers, especially politicians and high profile persons to desist from withdrawing Naira for the purpose of converting them into Dollars just for keeps.

He described this action as illegal, which he said was capable of wrecking the country’s economy as the nation makes every effort to resolve the lingering foreign exchange (forex) scarcity, which is depleting the value of the Naira very fast against the greenback in the currency market.

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

According to him, anyone caught involved in this would be prevented from using the banking system in the country as a Post no Debit would be placed on the bank account of the defaulting customer.

He also added that any bank discovered to be aiding this illegal act would be sanctioned by the country’s banking industry watchdog.

Mr Emefiele said this warning became necessary as the country goes into the election season and political actors would want to mop up FX from the system to prosecute the 2023 general elections, causing the value of the local currency to further depreciate.

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

On Tuesday, the Naira lost N7 or 1.13 per cent against the Dollar in the black market to quote at N625/$1 compared with the previous day’s N618/$1 and in the Peer-to-Peer (P2P) segment, it fell by N11 or 1.75 per cent to sell for N640/$1 in contrast to Monday’s value of N629/$1.

There are fears that the Nigerian currency could crash to N700 before the polls next year and probably sensing this, the CBN wants to take steps to avert this as it could collapse the economy.

“As far as we are concerned, we monitor liquidity in the subsystem. We will use our powers to mop up 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,” Mr Emefiele declared 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 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.”

Aduragbemi Omiyale

Aduragbemi Omiyale is a journalist with Business Post Nigeria, who has passion for news writing. In her leisure time, she loves to read.

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