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As the gap between the value of the Naira at the interbank and parallel market continues to widen, the Federal Government has announced plans to converge the rates by abolishing the parallel market.
The gap between the interbank and parallel market rates has grown to N184.75 as at yesterday, as the naira was sold at N490 to the dollar at the parallel market as against N305.25 at the interbank end of the market, increasing the temptation of round tripping.
The Minister of Finance, Kemi Adeosun, said yesterday that the ministry is in talks with the Central Bank of Nigeria (CBN) to eliminate the parallel market otherwise called black market, which has been blamed for the sinking value of the local currency.
Adeosun said having discussed with the apex bank, “the CBN has promised to do something by putting a system in place to eliminate the black market because it is damaging the economy.”
Earlier in the year, the CBN which sells foreign exchange to bureaux de change (BDC) in the country stopped dollar sales to the BDCs, telling them to source their foreign exchange from other sources. It had also asked banks not to sell dollars to them, a decision it rescinded when it allowed BDCs to buy remittances from banks recently.
In June the apex bank had finally heeded calls to allow a free float foreign exchange market, scrapping the 16 month old peg of the naira at N197 to the dollar. This had led to the sharp decline of the naira at both the interbank and parallel markets as the local currency dropped to around N350 to the dollar before stabilising at N305 at the interbank market while at the parallel market, the currency had gravitated towards N490 which it currently sells at.
Acting director, corporate Communications at the CBN, Isaac Okoroafor, was quoted by Reuters as saying the central bank was working towards “ensuring that the forex market operates as effectively as we would envisage.”
He said the aim was to “ensure there is no black market” but did not give details of how this would be achieved.
Meanwhile, the Chief of Mission, International Organisation for Migration, IOM, Enira Krdzalic, disclosed yesterday that the remittances from Nigerian migrants had increased to about $35 million dollars in 2016.
Speaking at the Annual Migration Dialogue to mark this year’s International Migrants Day in Abuja, yesterday, while quoting statistics by the World Bank, pointed out that the significant increase of remittances of Nigerian migrants from $21 million in 2015 made it the second largest recipient of remittances in Africa.
This according to her, implies that Nigeria ranks the fifth largest recipient of remittances in the world from its citizens who sent home money to relatives and friends.
“According to the World Bank report, remittances have reached levels nearly three times higher than official development corporation funds with global figures of remittances still expected to grow.
“Remittances have been expected to grow at an average of 8 per cent annually in the period from 2013 to 2016, to about 700 billion dollars in 2016,” Krdzalic said.
She explained that migration did not have negative impacts on nations but also had positive impacts when done through the due process and that the aim of the joint initiative was not to stop migration but to work together to ensure that migration process was safer and better managed.