Forex Supply Drops to $700m Monthly

 

Governor Godwin Emefiele

 

The economic crisis in Nigeria has been aggravated by the scarcity of forex which has dipped massively according to CBN reports. The Central Bank of Nigeria said on Tuesday that the monthly supply of dollars at its disposal had dropped to between $600m and $700m.

 

While the bank had a stock of up to $3bn monthly in 2013 and 2014, it said the forex scarcity that hit the country lately had left it with roughly $700m.

 

The Deputy Governor, CBN, Mrs. Sarah Alade, who appeared before an ad hoc committee of the House of Representatives in Abuja, explained that the forex scarcity was the reason why the apex bank was unable to meet all demands, particularly those coming from importers of petroleum products.

 

The ad hoc committee, which is headed by a member from Imo State, Mr. Nnana Igbokwe, is conducting a public hearing on the review of the pump price of petrol from N145 to N70.04 as proposed by the House.

 

The committee had summoned the Governor of the CBN, Mr. Godwin Emefiele, to respond to allegation by importers that the bank was denying them access to forex.

 

Emefiele was also to explain how International Oil Companies got involved in the sale of foreign exchange to importers and petroleum marketers in the country.

 

But Alade, who represented the governor, told the committee that it was impossible to meet every forex demand in the light of the present scarcity.

 

She said, “Things are not the way they used to be.

There is a shortage of foreign exchange. In 2013 to 2014, the Federal Government used to get $2bn to $3bn monthly, and the CBN in the interbank market sold about 30 per cent of that. Seventy per cent came from foreign investors.

“Today, we get $600m or $700m. Nothing comes in from interbank market; $1.5m is sold every day and $1bn was done in December to clear matured Letters of Credit. It’s not the way it used to be.”

 

The Minster of State for Petroleum Resources, Dr. Ibe Kachikwu, responded to the question on why the IOCs were involved in the sale of forex to importers.