The governor of the Central Bank of Nigeria (CBN) Godwin Emefiele says the embrace of the parallel market exchange rate by some professionals in that country is unfair and unfortunate. The CBN governor says the parallel foreign exchange market only accounts for a share of the market that does not exceed 5%. He also adds that this market is popular with corrupt individuals because it enables them to facilitate their illegal activities.
Parallel Market Tainted
Emefiele’s remarks were prompted by reports in late November that the local Naira currency has plunged to 1:480 against the U.S. dollar. This is in contrast with 1:380 which the CBN says is the actual rate.
In remarks made during the CBN’s monetary policy committee (MPC) press briefing on November 24, Emefiele decries the use of what he terms a “tainted market” to determine the national currency’s exchange rate. Describing the foreign exchange parallel market Emefiele says:
It is a tainted market where people who desire to deal in illegal foreign exchange transactions including sourcing of FX cash purposes of offering bribes, corruption…that is where they deal.
Throughout the short speech, Emefiele reiterates the belief that Nigerian analysts are abetting the use of the black market exchange rate for formal business transactions. Lamenting the apparent embrace and widespread use of the parallel market exchange rate, Emefiele repeats that it is unfortunate that “those who are supposed to know (are) trying to bend numbers in this country.”