CBN Governor speaks on FX, makes strong revelation about parallel market

XThe Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, said the parallel market is where illegal foreign exchange transactions take place.

Governor Emefiele speaks on the FX parallel market @ the 276th MPC press briefing held 24th November, 2020. pic.twitter.com/NcO84JXo9x

— Central Bank of Nigeria (@cenbank) November 25, 2020

Emefiele also claimed that the market is a place where sourcing of forex cash for purposes of offering bribes and other corrupt activities occur.

He explained that the parallel market is a shallow market with not more than 5% shares in the Nigeria’s market.

According to him, Nigeria’s official exchange rate should not be determined by the rate in that market where the naira has weakened to a 3-month low.

Techeconomy.ng obtained this from a statement released on Tuesday, November 24, by Emefele during a virtual briefing in Abuja after the Monetary Policy Committee meeting.

The statement read:  “And indeed I heard some analysts talking about the parallel market saying that exchange rate is at N480.

“I want to say this, that it is unfortunate and really unfair that even analysts who are supposed to know will play with numbers and begin to determine the exchange rate of our currency using parallel market rate.

“For the information of everybody, parallel market as far as we know it and the data that we have, is a shallow market in Nigeria with no more than 5% of market share.

“Parallel market and quote me is a tainted market in Nigeria, where people who desire to deal in illegal foreign exchange transactions including sourcing of FX cash for purposes of offering bribes, corruption, that is where they deal.

“And that is where people who are supposed to understand the implication of these on the economic activities on our country begin to go to television and begin to say our exchange rate is N480. This very unfortunate.”