11 April 2009

Despite measures taken by the Central Bank to reverse the falling trend in the value of Nigeria's currency, yesterday it became apparent that the value of Naira was on the downward trend.

The dollar was exchanged for between N180 and N182 at the parallel market yesterday.

Meanwhile, the Association of Bureau De Change Operators of Nigeria (ABCON) has accused the commercial banks in the country of round tripping as they deliberately sell dollars to touts at rates higher than the official rate given by the Central Bank of Nigeria (CBN).

Efforts to get the CBN's comment on the matter failed.

Speaking with Daily Trust in Lagos yesterday, the Public Relation Officer of ABCON, Mr Olajide Shittu said the government should hold the commercial banks operating in the country responsible for the ongoing appreciation of the dollar against the country's currency as they continuously refuse to sell to genuine customers but rather sell to touts who in turn increase the price and sell to the BDCs.

According to Mr. Shittu, banks "call some people and sell to them at between N170 and N172 and they are told to pay into private accounts of some of the banks' managers to avoid monitoring from the CBN."

The ABCON spokesman said since banks sell only to touts at N171 or N172 "they (touts) call us and sell to us and since we are in the business to gain we also put some amounts and that is why Dollar now goes for between N180 and N182 in the country."

He said unless the CBN takes drastic measure against the banks, the round tripping being done by them, as per the exchange rates, may soon spell doom for the sector, adding that the way things are going the dollar may hit N200 again.

"This will surely have a negative effect on our economy generally," he added.

"We said then that the CBN measure to flood the market with dollars would not bring lasting solution to the crisis in the market, now we are vindicated. You can see what is going on now. The Dollar has jumped to N180, N182 again and the trend may likely continue as the banks refuse to sell at official rates. The banks should be held responsible because they have continuously refused to sell to customers directly at official rates of N140 and N150; instead they call people I can refer to as touts and sell to them at higher rates of between N171 and N172. They are given private accounts to pay to in order to avoid the monitoring from the CBN. It is these touts who now sell to the BDCs who in turn sell at higher rates.

"The government should investigate the banks with view to stopping the round tripping they are carrying out because if truth must be told the banks are really ruining the country's economy. I have been doing independent monitoring of the commercial banks for a long time and I discover that Nigerian banks do everything illegal that is detrimental to the country in order to make huge profits", he said.

ABCON had told Daily Trust that the fire brigade approach employed by the CBN two weeks ago, which made the Naira to appreciate a little against the Dollar and some other foreign currencies, may not be the permanent solution to the problem.

It said: "But I can tell you this may not be the permanent solution as we may still revert to old way. The naira may still fall."

Meanwhile, Pounce has also gone up again against the Naira as one BR pounce now equals to N240. ABCON said the government needs to act fast as the economy may be the worst for it.

The association called on the CBN to revert to the old system prevalent in the sector as the new system being used has not helped matter.

It would be recalled that the CBN two weeks pumped dollars into circulation and the Naira slightly appreciated. But the joy that followed the appreciation was short lived as the Naira last weekend began to nose dive again.