Banks barred from holding funds in dollars

Posted by News Express | 19 December 2014 | 2,799 times

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As part of fresh measures to reduce pressure on the naira, the Central Bank of Nigeria (CBN) yesterday barred banks from holding their own funds in dollars.

Reuters quoted CBN Governor, Mr. Godwin Emefiele, as saying: “We do not want speculators in this market any longer.” He added that he believed the current naira band, set last month at N160-N170, was “appropriately priced at this time,” meaning that the apex bank will continue to defend the currency even as it is currently trading below the band. According to Reuters, the naira fell to a record low of 188.85 to the dollar after his comments.

The news agency reported that currency traders were mostly reluctant to quote prices for the naira yesterday amid confusion about the impact of a central bank adjustment to foreign exchange trading regulations. The financial regulator stipulated overnight that dealers had to reduce the percentage of “shareholders funds” that they could hold in dollars from 1 percent to zero.

•Sourced from Newswatch Times. Photo shows CBN Governor Emefiele.


Source: News Express

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