Former deputy governor of the Central Bank of Nigeria (CBN), Obadiah Mailafia has stated that the decision of the apex bank to stop sales of foreign exchange (FX) to Bureau De Change (BDCs) operators may worsen naira value.
He stated this in an interview with ThePunch on Wednesday.
Mailafia stated that more caution is needed as the apex bank’s decision may worsen the Naira value.
The former CBN deputy governor warned against scarcity of foreign exchange as a result of bureaucratic processes in the commercial banks.
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“If we are not careful, that decision will actually worsen the naira value because the BDCs, you could walk into any of them anywhere and within five minutes, they will attend to you but the banks, you have to drive to your nearest bank, you have to queue most of the time,” he said.
“The CBN has not told us the rate, the banks will want to make a profit over the official rate, we don’t know whether they will make a decent profit or they will profiteer.
“Bankers were the biggest experts in round-tripping. Old habits, I don’t think they change. Leopards are very unlikely to change their spots.
“So, we may end up in a scenario where there is scarcity and the simple economics of demand and supply tells you that where there is increase scarcity, price is likely to shoot up.
“If bank bureaucracy makes it difficult for people to access dollar, what it means is that the bureaucracies, obstacles and bottlenecks are likely to put pressure on supply and pressure on supply may mean an increase in demand for the dollar and greater fall of the naira, if we don’t play the cards well.”
Mailafia added that commercial banks in Nigeria cannot be trusted with the sales of forex.
He stated that the banks will prioritise their interests and only make available to the public whatever is left.