Victor EzejaFormer Deputy Governor of the Central Bank of Nigeria (CBN), Prof. Kingsley Moghalu, has called on the apex bank to beam its regulatory searchlight on commercial banks not only cryptocurrency exchange platforms in tackling the forex crisis in the country.
Prof. Moghalu made the call when he appeared on Arise New Morning Show on Wednesday.
The CBN has in recent times been all out to tackle activities of speculators that are said to be a contributory factor in the persistent depreciation of the naira in the foreign exchange market.
Some of the measures include clamping down on cryptocurrency exchange platforms, like Binance. Others included revising the guidelines for Bureau de Change (BDC) operations and revocation of licences of those that failed to meet the requirements.
Former Deputy Governor of the Central Bank of Nigeria (CBN), Prof. Kingsley Moghalu, has called on the apex bank to beam its regulatory searchlight on commercial banks not only cryptocurrency exchange platforms in tackling the forex crisis in the country.
However, Prof. Moghalu, who is the chairman of the Board of Africa Private Sector Summit stated that the CBN needs to step up its oversight to check the activities of commercial in forex transactions.
“In the matter of forex, there have been reports that some of the banks are hoarding forex. I think we had about $7 billion in the bank,” Moghalu stated.
He acknowledged the recent policy regulation issued by the CBN which stipulated a maximum amount of forex that commercial banks can hold, all in a bid to boost liquidity in the foreign exchange market.
“There are many aspects of speculation that have driven the naira down. One is in the crypto market, the Binance. Yes we get it, but there is also the aspect of the banks, and we see the central bank focusing a lot on Binance and the crypto, but we don’t see a push to bring banks under discipline and I worry about that because if you cannot discipline the banks, you cannot stabilise the financial system,” Moghalu stated.
He therefore called on the CBN to investigate the commercial banks thoroughly and if any of them is found to have breached the forex guidelines, should be appropriately disciplined to serve as a deterrent to others and make everyone else sit up and do the right thing.
The economic expert claimed that such disciplinary action was taken against violators during the time he served as deputy governor of the central bank and it yielded good results.
He reiterated his earlier support for the CBN’s decision to raise the Monetary Policy Rate (MPR) from 18.75 per cent to 22.75 per cent in a bid to fight inflation ravaging the economy, although belated.
According to him, raising the MPR should have been done earlier when the naira was floated in the forex market.
“Raising the MPR by 400 basis points should have happened before or at the same time that the naira was floated or when the rates were being merged otherwise you are devaluing the naira in a monetarily lose environment and that’s why the naira has dropped so much.”
“We need to focus on the banks, we need to crack down on the banks, they are part of the problem,” Moghalu added.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
