•Moves against currency hawkers
By Obinna Chima in Lagos and Ademola Babalola in Ibadan
The Central
Bank of Nigeria (CBN) yesterday disclosed that trading in the Chinese
Renminbi would commence before the end of this month.
A top CBN
official, who disclosed this in a chat with THISDAY, said the CBN was
finalising modalities for the trading in the Chinese currency.
This
followed a $2.5 billion bilateral currency swap agreement signed in May
between the CBN and the People’s Bank of China (PBoC).
According to
the source, the CBN wants to ensure that the regulations around the
trading of the Renminbi are tightened so as not to create any room for
arbitrage and currency manipulation.
“All hands are on deck, all the work is being done and in the next two weeks trading will commence.
“There will
be very marginal discount to encourage people to go for it. But the
discount will be so small as not to encourage arbitrage, but encourage
those who really want to do so that they can get an advantage for
embracing the Renminbi currency,” the source added.
The CBN recently held town hall meetings in some cities in the
country in its bid to woo businesses importing goods from China to use
the Yuan instead of the United States dollar in its effort to support
its naira currency and boost reserves.
Officials
said the deal was aimed at reducing reliance on the dollar and “as such,
reduce the pressure on the naira-dollar exchange rate.”
Under the
swap arrangement, the central bank would hold N720 billion in an account
in favour of the PBoC while the Chinese central bank would hold 15
billion Yuan, implying an exchange rate of N48 to the Yuan.
The bank
also said the move was aimed at encouraging Chinese firms buying local
raw materials and semi-finished goods to pay in naira.
THISDAY had reported that First Bank of Nigeria
Limited, Stanbic IBTC, Standard Chartered Bank (SCB) and Zenith Bank
Plc had been appointed the settlement banks for the bilateral currency
swap deal.
Meanwhile, the CBN has warned that hard times now await hawkers of the naira, especially those who exchange new currency notes for old ones at motor parks or parties and other social functions.
CBN over the
weekend in Ibadan assured economic agents such as the marketers,
merchants, shopping malls, supermarkets of the bank’s continuous and
direct supply of huge volumes of the banknotes to traders’ unions.
The
development, according to the acting Director, Currency Operations
Department, CBN, Mrs. Priscilla Eleje, was to ease difficulties being
encountered by the traders and customers occasioned by the inadequate
circulation of the lower denomination banks notes like N200, N100, N50,
N20, N10 and N5.
Eleje who
was represented at the public sensitisation and enlightenment campaign
on CBN direct intervention on lower denomination banknotes at the
Alesinloye market by a Deputy Director of the bank, Mrs. Olufolake
Ogundero, added that the bank recognises the important role markets play
in economic transaction hence the need for ease accessibility of the lower denominations to carry out economic transactions.
She said the objectives of the CBN’s intervention was principally to ease accessibility
and consequently address the dearth of these denominations in
circulation adding that the disbursement has commenced in Abuja and was being extended to Lagos, Kano, Enugu, Onitsha, Ibadan, Yola, Gombe, Katsina and Jos.
Eleje added:
“It is a criminal offence punishable by six months imprisonment or a
fine of N50,000 or both to sell, spray or mutilate the banknotes. It is
also a criminal offence which attracts five years imprisonment without
an option of fine for anybody to counterfeit the naira. The naira is our
pride as a country. So respect it.”
The Ibadan
zonal Controller of the bank, Mr. Musibaudeen Olatinwo, said since a
large number of the businesses deal in Fast Moving Consumer Goods (FMCG)
and service, the CBN would henceforth supply the banknotes directly to
the Joint Traders Association of Oyo State and major retail outlets to
meet the high demand for the notes.
Olatinwo
said the intervention was timely because of the experience of scarcity
of lower denominations in circulation due to hoarding and racketeering,
saying: “The CBN has tried to increase the supply of these notes only
for it to be diverted from its expected users and sold in the open
market.
The leader
of the market women in the state, Mrs. Labake Lawal, assured the CBN of
the cooperation of her members, stressing that “we will comply strictly
with the agreed guidelines and utilise the banknotes for the intended
purpose.”
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