“Banks you regulate use parallel market rates” – Nigerians react to Emefiele’s claims on forex

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CBN Governor, Godwin Emefiele

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has taken a swipe at economic analysts relying on the parallel market to determine the foreign exchange rate.

He spoke Tuesday during a virtual monetary policy committee meeting in Abuja.

“I heard some analysts talking about the parallel market, saying that the exchange rate is at N480/$1.

“It’s unfortunate and really unfair that even analysts that are supposed to know will play with numbers and begin to determine the exchange rate of our currency using parallel market rates.

“For the information of everybody, parallel market as far as we know it and the data that we have is a shallow market in Nigeria with no more than 5 percent of market share.

“Parallel market, and quote me, is a tainted market, where people who desire to deal in illegal foreign exchange transactions, including sourcing of FX cash for purposes of offering bribes, corruption, and that is where they deal.

“That is where people who are supposed to understand the implication of this on the economic activities of our country being to go on television to say that our exchange rate is 480.

“This is very unfortunate,” Emefiele said.

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Many Nigerians disagreed with Emefiele, saying that his argument was illogical since the same banks being regulated by the CBN brazenly adopt parallel market rates in FX transactions.

According to Abokifx.com, the dollar traded at N483 on Tuesday.

However, the dollar traded at N386.16 on the spot market as at 3:55 p.m same day.

More individuals and businesses have come to rely on the parallel market for FX transactions due to low liquidity in the much cheaper official window.

Read reactions to Emefiele’s assertion sourced from Twitter:

 

 

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John is a University of Lagos-trained journalist who has read almost every novel written by Chinua Achebe, Jeffrey Archer and Dan Brown. He's an expert Scrabble and draughts player who is also excellent at swimming.
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