The House of Representatives has announced plans to investigate allegations of dollar hoarding by some commercial banks, following a motion moved by Babajimi Benson (APC, Lagos) during plenary on Wednesday.
Mr. Benson raised concerns that certain banks are undermining the efforts of the Central Bank of Nigeria (CBN) to stabilize the naira by hoarding dollars and not complying with the new FX risk management circular issued by the CBN.
Last week, the CBN issued a circular outlining measures to manage FX risk, including restrictions on overall foreign currency assets and liabilities. Banks found to exceed these limits are required to rectify their positions by February 1.
Mr. Benson highlighted that despite these directives, most banks have not been complying, engaging instead in speculative activities that worsen the economic situation. He expressed concern that this speculative behavior has made it difficult for legitimate businesses to access forex for their transactions.
In response to the motion, the House resolved to task the House Committees on Banking Regulations and Banking Institutions with conducting an investigative hearing on the non-compliance by banks with CBN directives on the Net Open Position Limits.
This resolution comes shortly after the appearance of the Central Bank Governor, Oluyemi Cardoso, before the lawmakers, where discussions centered on the volatility in the foreign exchange market. Lawmakers expressed concerns about the devaluation of the naira and its impact on the cost of living.
Nigeria’s naira has been experiencing a decline since the implementation of a unification policy, attributed to factors such as illiquidity and speculative practices among market operators and street traders.
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