It’s Illegal To Transact Business In Dollars In Nigeria – Emefiele, CBN Governor

Godwin Emefiele, CBN governor

As the Central Bank of Nigeria (CBN) struggles to meet demand for dollars in the foreign exchange market, its governor, Mr. Godwin Emefiele, has taken the well-worn path of his predecessors by declaring that the currency for transacting business in the country remains the naira, warning that it is illegal to carry out transactions using the US dollar.

He said the CBN would in due course go after those who violate the policy.

THISDAY reports:

Addressing journalists in Abuja after the two-day meeting of the Monetary Policy Committee (MPC), he said: “We will be looking at areas where people are making demands for foreign currency; people who are landlords who are asking for rent in dollars; schools that are asking for school fees in dollars or transacting business in dollars.”

He stressed that it is illegal in Nigeria to transact business in foreign currency and advised those involved in the practice to desist from doing so, because the CBN would soon come after them.

Also, the CBN yesterday decided to retain the monetary policy rate (MPR), otherwise known as the interest rate, at 13 per cent as well as banks’ cash reserve requirement (CRR) on private sector deposits at 20 per cent and that of the public sector deposits also at 75 per cent.

Emefiele, who read the committee’s communiqué, said all 11 members unanimously voted to retain the rate, adding that its previous decisions needed time for their effects to fully permeate the economy.

However, he expressed the MPC’s concern over the phenomenon of currency substitution and partial dollarisation in the economy, a development, which he said might have significantly fuelled the high demand for foreign exchange.

Emefiele was emphatic that the naira remained the currency of transactions in the economy and advised commercial banks to take all possible measures to address this development.