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Nairaland Forum / Nairaland / General / Politics / Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits (1777 Views)
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Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by abagoro(m): 7:59pm On Jul 31, 2015 |
http://www.thisdaylive.com/articles/naira-rebounds-in-parallel-market-as-banks-reject-dollar-deposits/216163/ Naira Rebounds in Parallel Market as Banks Reject Dollar Deposits 31 Jul 2015 Obinna Chima The naira, which had fallen sharply in the parallel market, staged a major recovery thursday, as it appreciated to a band of N225 to N230 to a dollar, compared to N240 to the dollar at which it sold in the last few weeks. Forex dealers attributed the naira’s gain to excess supply of the greenback in the market, even as it looked like a lot of speculators would lose their shirts. THISDAY gathered from a reliable source that commercial banks that presently have dollars in excess of $1 billion in their vaults have started taking desperate measures to mitigate currency risk. In fact, the source, a bureau de change (BDC) operator, disclosed that banks have stopped accepting dollars because they have too much cash in their vaults. According to the source, as a result of the development, banks have been rejecting dollar deposits into domiciliary accounts, but customers are allowed to withdraw cash from their accounts. “The reason the banks have too much cash is due to speculation and money laundering. A lot of people have been speculating against the naira and amassed so much cash. Then there are those who have been amassing dollars obtained illicitly and want to launder the money, “So bank vaults are awash with dollars, largely driven by speculation and money laundering. The banks made it very clear that they want to get rid of the dollars in the system, so if you want to withdraw you can, but you cannot pay in dollars into your domiciliary account,” the source explained. Confirming the development, an official of the Central Bank of Nigeria (CBN) said the banks even offered the dollars to the central bank and sought its assistance to help them to wire the funds overseas, which the CBN rejected. Following the rejection, the banks were left with no option than to stop accepting dollar deposits from customers, hence the sharp depreciation of the dollar to the naira in the informal forex market. “By the time CBN refused to wire the cash abroad, the banks led by Stanbic IBTC stopped accepting cash from their customers. Stanbic IBTC sent an email two days ago to its customers that it would not accept dollar deposits for the time being and this was followed by ten other banks,” he divulged. He said the situation was compounded by CBN’s insistence that BDCs obtain the Bank Verification Numbers (BVNs) of their customers before transacting any business with them. “The central bank introduced this measure so that it can track the wire transfer BDCs carry out on behalf of their customers. That way, a money trail can be established to ensure that the funds being wired out are for legitimate transactions and not illicit transfers. “Another option available to the CBN is to give BDCs prepaid debit cards in denominations of $1,000 instead of selling them cash so that these cards could be used for legitimate transactions that are traceable,” the official explained. Also, an analyst at Ecobank Nigeria, Mr. Kunle Ezun, who spoke to THISDAY, attributed the naira’s surge to the directive by the central bank that all licensed BDCs in the country must provide the BVNs of their customers for all transactions. “I have been watching the market in the past few days and since last week’s directive by the central bank for the inclusion of BVNs as one of the requirements for accessing the interbank market, the naira has been appreciating. “As the enforcement of the BVN commences next week, I think we would see more transparency in that market. I have always said that what is driving the parallel market is speculation and that is what the CBN has always said. “So once the BDCs start complying with the BVN requirement, we might see the naira appreciate further in the parallel market,” Ezun said in a phone chat with THISDAY last night. The CBN about a fortnight ago also directed the BDCs to provide the BVN of all their directors before August 15, as failure may affect their continued participation in the forex market. It also directed that information on all transactions by customers be included in the BDC returns to the CBN. It added that for corporate customers, the BVN of a director or an authorised signatory of the entity must be provided. The CBN said the move was to ensure greater transparency in the transactions of licensed BDCs in the country. |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by ladyF(f): 7:59pm On Jul 31, 2015 |
Hmmm....Interesting |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by superstar3: 8:09pm On Jul 31, 2015 |
This is a good news. I hope naira appreciate further. |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by Bugatie(m): 8:19pm On Jul 31, 2015 |
God bless Jonathan, The BVN exercise project is a laudable exercise initiated by his administration. 7 Likes |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by saintopus(m): 8:41pm On Jul 31, 2015 |
With this news as explained here it means that hodders are in real trouble if they don't hurriedly sell off their dollars because the naira will continue to appreciate and Nigeria being who they are with so much greed may lose much money if they continued the nodding. |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by baralatie(m): 8:45pm On Jul 31, 2015 |
Bugatie:it makes life easy for the CBN and efcc 1 Like |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by baralatie(m): 8:47pm On Jul 31, 2015 |
saintopus:not as strait forward as you think! |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by KHAYGOLD(m): 9:02pm On Jul 31, 2015 |
I should quickly run to bureau de change tomorrow to buy dollars. |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by Nobody: 9:16pm On Jul 31, 2015 |
KHAYGOLD:It is people like you that are contributing immensely to the current plunging of the naira. 2 Likes |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by KHAYGOLD(m): 9:22pm On Jul 31, 2015 |
FriedPlantain: Abeg go and continue frying ur plantain jare. u sabi wetin I wan take dollar do? Mr bebeto. I no know who call u. 3 Likes |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by ZACHIE: 9:39pm On Jul 31, 2015 |
saintopus: Abi o let them kontinu o Na headache go settle the matter 1 Like |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by mbizzy(f): 9:41pm On Jul 31, 2015 |
Good move |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by rusher14: 9:53pm On Jul 31, 2015 |
Sai Buhari!! |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by doncaster(m): 10:38pm On Jul 31, 2015 |
But the pounds is still gaining against the naira. This shows that the appreciation against the greenback is artificial. Today I got an sms from DTI that they are doing 355 against 1 pounds while LCC and Coinstar are doing 350. Naira will appreciate against all currency when the govt states its policy otherwise this only dollar appreciation is just a gimmick. |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by chesterlee(m): 10:50pm On Jul 31, 2015 |
We don't have a finance minister!!! Sai Buhari! |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by Adesiji77: 6:30am On Aug 01, 2015 |
Good one...waiting for the dollar to drop further “I have been watching the market in the past few days and Cc: Ishilove, lalasticlala |
Re: Naira Rebounds In Parallel Market As Banks Reject Dollar Deposits by MaZterZ(m): 7:03am On Aug 01, 2015 |
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