By Franklin Alli & Naomi Uzor

Lagos—The Lagos Chamber of Commerce and Industry, LCCI, warned yesterday that a new wave of Non-Performing Loans in the banking system is imminent following the recent closure of sales of foreign exchange through the Retail Dutch Auction System, RDAS, by the Central Bank of Nigeria, CBN.

LCCI, in a statement on the closure of the RDAS/WDAS foreign exchange (forex) window by the apex bank, also proposed a minimum refinancing facility of N200 billion to be provided at single digit interest rate and a 15-year tenure to cushion the effect of the new policy on investors with high foreign exchange exposure.

Remi Bello, LCCI President said: “This policy measure has its merits and its downsides; exchange rate induced loses could trigger a new wave of non-performing loans in the banking system and this have implications for financial system stability.”

“Following the revision of the guidelines and the exclusion of some transactions, this forex window was targeted at providing support for the real sector of the economy because of their strategic importance to the development process, job creation and inclusive growth. They are therefore the first natural victims of the closure, particularly the few that had access to this window.”