FOREX: CBN’S DIRECTIVES ON NAIRA REMITTANCE AIM TO PREVENT HOARDING, ASSERTS BEWAJI
Dr. Wunmi Bewaji, an expert in securities and financial regulation law, expressed that the Central Bank of Nigeria’s (CBN) directives instructing International Money Transfer Operators (IMTOs) to remit in naira will curb hoarding of scarce forex and deter speculation by those holding the currency.
In an interview with our correspondent, he emphasized the positive nature of this move, stating that it is a step in the right direction.
In a document released on January 31, the CBN directed IMTOs not to facilitate money transfers from Nigeria to other countries, making it mandatory for them to pay in naira.
The financial expert pointed out that although the Nigerian government, through the CBN, is the primary supplier of forex exchange, the country is not benefiting significantly from forex remittances.
He welcomed the directive as it introduces a two-way traffic exchange regime, allowing individuals like importers, students, tourists, emigrants, medical tourists, property buyers, and those engaged in money laundering to enter the market and purchase foreign exchange.
Dr. Bewaji highlighted that Nigeria has an annual diaspora remittance of approximately $30 billion, but 95% of this money remains outside the official system, contributing to issues facing the Naira.
He believes that the new directives will address the problems of hoarding scarce forex and prevent speculation by those holding the currency.
Regarding the CBN’s description of the directive as a move to “liberalize the forex market and ensure transparency,” Dr. Bewaji noted that despite the decision to float the naira, there has been increased volatility as the CBN works to clear forex backlogs worth about $7 billion.
He expressed confidence that the apex bank and the economy will benefit from the directives, as they will contain unpatriotic individuals attempting to circumvent the system through cryptocurrency and other means.
Dr. Bewaji lauded the recent lifting of the ban on cryptocurrency, stating that its recognition allows the government to regulate and prevent its undermining of the financial system.
He concluded by emphasizing that this move aligns with international practices, citing examples of currency exchange procedures in countries like the United Kingdom and the United States. Dr. Bewaji believes that Nigeria will soon start experiencing the benefits of these directives.
Reporter: Tobi Adetunji
News Source: Techeconomy
