₦airaland Forum

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.

He has been in office for less than 100 days but the office of the first lady is still vacant, as each of the two wives are claiming to be the legal occupant of the controversial office.

Hajia Aisha Bagudu and Dr. Zainab Bagudu, are both using the logo and letter headed paper of the Kebbi State office of the First Lady with their official cars carrying the insignia of the wife of the governor of Kebbi state also.

The inability of the governor to choose who will occupy the position among his two wives appears to be affecting the operations of the office of the First Lady in the state.

Dr Zainab Bagudu accompanied the governor during his pre-election campaign tours. Sources said the governor had earlier planned to appoint Zainab as the first lady considering her contributions to his campaign but was at a crossroad after the visible closeness of Hajia Aisha Bagudu to women at the grassroots came to light, especially her robust relationships with the mall ams and locals in the state.

A source in the governor’s office told Per Second News that after the swearing -in of the governor, he instructed that the letter headed paper for the office of the first lady should be printed for Zainab.

"But after His Excellency travelled to Abuja and returned, he change his mind and directed that the letter headed paper for the office of the first lady should be printed for his two wives and the decision is now generating tension in the family."

The situation is getting messier by the day as an instruction last month to the duo to proceed to the government house and choose their accommodation wing degenerated into a fisticuff between Zainab and Aisha.

A source who was present when the physical fight started said that it took the timely intervention of security aides to restrain the warring governor’s wives.

Per Second News reliably gathered that the governor was livid after he was briefed about the incident swearing not to move to the government house again.

The governor now operates mostly from his house, according to Per Second News findings.

Some top government functionaries that commented on the first lady crisis advised the governor to appoint the wife of the deputy governor as the first lady, since he is afraid to offend his wives by appointing one of them as the first lady.