Thursday, December 31, 2015 08:55 AM / FBNQuest
The CBN governor, Godwin Emefiele, told the annual dinner of the Chartered Institute of Bankers of Nigeria in Lagos in late November that it had achieved stability in the exchange rate since February, adding that “some are not happy with us for that action”.
This group of the discontented includes the offshore portfolio community and manufacturers running low on imported inputs. That said, we do not expect a change of tack from the authorities and we repeat our view that devaluation would be a last resort.
The pressure in the market has eased a little for the moment with the end of the pre-Christmas import surge and the encashment of FX by the returning diaspora on holiday.
The CBN’s pursuit of stability is underpinned by administrative measures.
Since November all sales of FX by bureaux de change have required a biometric verification number (BVN). This has constrained FX demand, and they all now have to place a cautionary N35m deposit with the CBN.
Our chart shows the steady increase in domiciliary accounts held at the DMBs, reaching N4.58trn in December 2014 or a manageable 16.7% of their total liabilities. The banks have since stopped taking fx cash deposits and so closed off one mechanism for importing.