Banks restricted from selling dollar to authorized buyers

In its efforts tosanitize the nation’s foreign exchange market, the Central Bank of Nigeria (CBN) has directed authorized dealers not to sell its interventions funds in the interbank market to authorized buyers such as hotels.
The apex bank  also directed that funds purchased through its interventions at the interbank market should be utilised within two working days of delivery, at a rate not more than 10 kobo above the purchase rate.
The CBN said in a circular  that the unutilised funds within two days of delivery should be returned to the Bank at the original purchase rates.
The circular further said, “the essence of the directives was to ensure compliance with the Net Open Trading Position limit and to ensure further control of the interbank market operations. It stated that any observed flouting of these directives will be appropriately sanctioned.”
In view of the dwindling prices of crude oil, the CBN Governor, Mr. Godwin Emefiele recently said the central bank would unveil plans to support price stability in the coming weeks.
Emefiele had assured Nigerians that both the fiscal and monetary authorities were taking measures that would make sure that country withstands any likely shock on the economy.
The Monetary Policy Committee had at its last meeting expressed concerned that banks were holdinglarge excess reserves averaging over N300 billion even when therewere ample opportunities for productive and profitable lending tothe real sector of the economy.
The concern was furtherstrengthened by the reality of injecting an additional N866 billion into the system through the redemption of maturing AMCON bonds in October. It explained that given the apathy to lending, banks may be inclined more to placing these new funds in the SDF or use it to increase pressureon the exchange rate.
The Committee advised the Bank to explore ways of encouraging banks to lend such excess reserves to the realsector.