The Central Bank has revealed that it has no plans to loosen the controls it placed over foreign currency transactions until our reserves rises to $200 billion.
According to media reports, the CBN director for monetary policy, Moses Tule made this remark during an interactive session with journalist when he was asked how long the current restrictions will remain in place.
He said, “As soon as we build up reserves up to $200 billion or more , we expect that just as the restrictions were not there initially, most of the restrictions will be lifted. But for now, every hand needs to be on deck; we need to earn foreign exchange as a country. You can improve your business processes in order to export and earn foreign exchange and that is what the country is calling on patriotic Nigerian businessmen to do.”
The highest Nigeria has ever had with reserves is $62 billion back in September 2008 and has not come close to anywhere near that figure in the last two years. The closest we have come to $50b was in April 2013 when reserves stood at $47.9 billion. It is therefore surprising that a top member of the CBN will be proposing a $200b reserve as a benchmark for lifting restrictions currently placed on the dollar.
The CBN has come under significant criticism in the past few months as its forex policies continue to stifle access to the dollar. Nigerians have significantly cut their holiday travel and spend this year as access to the dollar is nearly impossible and even when possible the rates are exorbitant. As Aminu Gwadabe, the head of Nigeria’s bureaux de change association, explained to Reuters. “The pressure on the market has slowed because most businesses are closing down for the year, while the number of those travelling abroad has fallen,”
The naira hit an all time low two weeks ago when it traded for about N280 to the dollar shortly after banks informed depositors that they can no longer use their debit cards abroad. It however rose to N266 to the dollar by Wednesday after the CBN sold $10,000 each to about 2,000 bureau de change operators