Key Takeaways
- Nigerian banks to auction forex on financial portal
- Central bank recently made a major change to its forex policy
- Crypto-assets proposed by some quarters as a potential solution to forex dependence
This development was revealed by Segun Agbaje the Managing director of one of the leading banks in Nigeria, Guaranty Trust Bank. Agbaje made this known following the completion of the recently concluded Banker's Committee meeting held on Thursday.
According to him, commercial banks had taken to the central bank's new forex policy for residents of Nigeria. He added that the banks had agreed to a new portal developed by the Nigerian Inter-Bank Settlement System Plc (NIBSS). This portal would enable customers to make applications for forex allowances.
Agbaje also noted that banks had a system that detected fraud applications, and those willing to game the existing application system would be caught. He concluded by expressing his belief that customers would reduce their dependence on cash for transactions in the future.
Nigeria is a unique economy and depends on 70% imports from foreign countries to meet its domestic needs. This has made the economy depend on the availability of forex like the USD and Chinese Yuan.
Previously the central bank had taken to selling forex to exchange operators. However, the bank noted that the forex sold ended up in the black market and stopped this service in July 2021. Since then, banks have been selling forex to businesses and citizens directly.
This new policy has not been entirely smooth due to the dependence of several businesses on foreign exchange. As a result, the local cryptocurrency community has proposed that the apex bank considers crypto-assets to replace the dependence on the USD.
It remains to be seen whether Nigeria drastically changes its foreign policy to align with the rapidly growing global financial system.
