•Collaborating with security agencies on Binance

By Emma Ujah, Abuja Bureau Chief

The Central Bank of Nigeria (CBN) has again raised the Monetary Policy Rate, MPR, its benchmark interest rate by 200 basis points to 24.75 percent from 22.75 per cent.

Briefing the press on the outcome of the 294th Monetary Policy Committee (MPC) meeting in Abuja, yesterday, the Governor of CBN, Mr. Olayemi Cardososo, also announced an adjustment of the asymmetric corridor around the MPR   to   +100/-300 basis points

He said that the Cash Reserve Ratio (CRR) of commercial banks was retained at 45 percent, while the CRR for merchant banks was increased to 14 percent from 10 per cent.    But the   Liquidity Ratio   of banks was left at 30 percent.

Cardoso explained that members of the MPC were faced with continuing with the tightening cycle or a hold to see further impact of last month’s MPR   hike but at the end, after reviewing the balance of risks, it was decided that a further tightening was the way to go.

All valid FX claim cleared

The CBN boss insisted that the backlog of all valid FX transactions had been cleared, adding that security agencies were investigating infractions discovered by the audit firm.

He said:   “We got a reputable audit firm to look into the documents and they did a thorough job and came out to say that a number of these transactions did not qualify.

I have said this before.    In some cases you have allocations of millions of dollars which were never requested.

“You also had cases where there were requests but no Naira backing, yet were allocated foreign exchange.    And the list goes on. Those were some of the infractions.    It was for those reasons that we refused to validate those transactions.

“Apart from the fact that documentation was not satisfactory, in many cases, they were outright illegal.    The law enforcement agencies are now looking at those transactions that as far as we are concerned, were not valid to be paid.

“I would emphasise that if there is any information to the contrary, we would in due course consider that.    But as at today, that is exactly where we stand. The law enforcement agencies are taking a very hard look into those transactions.

“I have said it before and I will say it again, that the valid transactions, as far as, the CBN is concerned, have been taken care of.    We are also not unmindful that, just maybe, some stakeholders may have some backlog over a period of time or the other.    We are not unmindful of that.    Some may go back years over a period of time.

“We have done what we can to make the market open, transparent and liquid as much as possible.    So those particular stakeholders are free to access the market.  

Collaboration on Binance

On Binance, the governor said that CBN has collaborated with security and other agencies of government in handling the case.

“Let me clarify that the CBN collaborates with other government agencies.    A month ago, we had collaboration with EFCC, security agencies, ONSA, SEC and we have been sharing information together.

“The responsibility for regulating crypto currency is not our own.    It is strictly that of SEC,” Cardoso said.

Why CBN opened dairy products import

  The CBN boss also explained that the decision to allow those interested in the importation of dairy products into the country to access the FX market was to ensure a level playing field in the sector.

He said, “We have decided to make the market as transparent as possible.    Because it is this lack of transparency that drives people away from the market.    Where the market players feel that there is something that isn’t quite right, that there is distortion, there is tendency for them to pull back.

“We observed that in this particular case, only six companies were allowed to bring in dairy products and its derivatives.    Only six.     We believe we should not constraint anybody that wants to come to the FX market to purchase FX from doing so.     

We should leave the market open and transparent.    Certainly we cannot restrict that market to just six players.”