The Central Bank of Nigeria (CNB) is on the verge to eliminate the foreign exchange black market in Africa’s biggest economy, the country’s finance minister said on Tuesday.
The naira is trading on the parallel market some 40 per cent lower than the official rate against the dollar as low global crude prices have dried up vital oil revenues and pushed Africa’s largest economy into recession.
As a result of this, the Minister of Finance, Kemi Adeosun, said the CBN has been mandated to scrap the damaging market.
The Apex Bank “has been directed to do this and CBN has promised to do something by putting a system in place to eliminate the black market because it’s damaging the economy”, she told a conference.
Lending his voice on the development, the CBN spokesman, Isaac Okorafor, said 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.
The CBN scrapped a 16-month-old peg of 197 naira to the dollar in June, but it continues to trade in the official market, so that the naira remains far stronger against the dollar there than on the parallel market.
The government has blamed that black market for damaging the already shaky economy.
“The CBN is working on the elimination of arbitrage,” Adeosun told Reuters by text message, without saying how this would be done.