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CBN tasks businesses on foreign exchange generation

BY MICHAEL EBOH
The Central Bank of Nigeria, CBN, has called on businesses in the country to ensure that their activities and operations are geared towards generating foreign exchange, which they will in turn, use for their import needs.

Speaking at the 2011 Access Bank Plc Financial Markets Conference, CBN’s Deputy Governor, Economic Policy, Mrs. Sarah Alade, who was represented by Mr. Charles Mordi, Director of Research, said that the rising demand for foreign exchange will be curtailed if businesses are concerned about generating foreign exchange for the country and for their own use.

She said that the CBN will continually ensure that it churns out policies that will lead to increased foreign exchange.

Speaking in the same vein, Mr. Musa Batari, Director, Trade and Exchange, represented by Nathaniel Igba, Deputy Director in the Department, said that it is the mandate of the CBN to ensure monetary and price stability as well as maintain external reserves to safeguard the international value of the naira, among others.

To achieve this, he said the CBN’s policies are aimed at price stability, looking at the supply end as well as the demand for foreign exchange with a view to maintaining a balance.

He explained that the challenges confronting the CBN in regulating the foreign exchange market is the diversification of sources of foreign exchange inflow, especially with the over-dependence on crude oil and low level of value addition and manufacturing activities in the country due to massive importation of consumables, products and services.

The CBN also emphasized the need for banks to adopt prudent management, safety and stability over returns and profits.

Mrs. Sarah Alade said that recent events in the banking sector have brought to the fore the need for banks to be prudent and ensure that depositors’ funds are managed judiciously.

She noted that unnecessary risk-taking should be discouraged, while a robust risk management framework should be developed and adhered to.

Alade advised banks to develop business models that will attract customers and enlarge their clients’ base, focus on strengthening their corporate governance framework through building of strong and effective Boards.


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