President Muhammadu Buhari has said that banks, importers and individuals involved in round-tripping of dollars they buy from the Central Bank of Nigeria’s (CBN) official market and resell in the parallel market will be made to face the law when caught.
The president gave the warning in an interview monitored on Al Jazeera television at the weekend.
Forex round-tripping or arbitrage refers to a process whereby funds obtained from the official forex market (at lower rates) and diverted to other markets and sold at a higher rate by forex dealer, banks and end users.
There has been strong suspicion that some banks and other end users that get weekly forex allocations from the CBN divert some of the dollar cash to the parallel market because of the wide gap between the official and parallel markets.
In his response to a question on alleged round-tripping in the forex market, the president said: “I agree with you, but we are going to check that and we are going to apply sanctions to anybody that is given dollars by the central bank for the importation of essential raw materials, for example pharmaceutical products, and because he can make N100 more, goes to the parallel market to sell it. We will pursue them and obviously would punish them.”
The CBN Governor, Mr. Godwin Ifeanyi Emefiele, recently said the central bank was on the lookout to penalise banks found in such unhealthy practice.
He also warned that if any bank was caught in the act, it is not just the institution that would be penalised, its management would also be severely punished.
Continuing, Buhari reiterated his stance against the devaluation of the naira, maintaining that “countries that play around with their currencies are countries that have enormous production capacity”.
“They have factories in place, they have infrastructure in terms of power, and their communications and security are actually perfect,” he said.
According to him, Nigeria virtually imports everything, from rice to toothpicks, adding: “If we don’t have the money for importing those things, what is the value in further devaluing the naira?”
He pointed out that in terms of the country’s exchange rate policy, national interest supersedes the interest of multilateral agencies such as the International Monetary Fund (IMF)