Why Naira Keeps Falling - Acting CBN Governor Explains

Category: Nigeria News

The acting governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, on Thursday, attributed the continuous of fall of Naira against dollar to present unofficial diaspora remittances.

Shonubi stated this at the National Institute for Security Studies, Abuja where he delivered Distinguished Personality lecture titled: “Diaspora Remittances and Nigeria Economic Development” for members of Executive Intelligence Management Course (EIMC) 16.

According to reports, the naira plunged to a record low of N925/$1 on the parallel market on Wednesday as demand for foreign currency outstripped supply.

This is the aftermath of liberalizing the foreign exchange regime, which is a clear departure of what obtained during the President Muhammadu Buhari- led administration.

But Shonubi explained that many diaspora remittances came to Nigeria in dollars, and they were not recorded officially, as such found their ways to black or parallel markets.

“With those remittances, the dollars have come in, we know the dollars have come in, but we don’t see them in the official system. So, they must be going somewhere and somewhere.”

“And the challenge with the black market, unofficial market or parallel market or whatever name you want to call it, it is as a result that it is not regulated, and it becomes an easy place to have criminal activities.

“We investigate bankers, not just bankers, anybody who has committed an offence, the first thing they want to do is to run to the black markets, change it to the dollars because it is less money to carry around.

“Some of the funding in the black markets are actually from diaspora remittances. That’s why it important we need to know a lot of what’s going on there. We can’t play the sentiment game. If we don’t understand the dynamics, we usually go with the literature which does not necessarily work for us,” the top banker said.