The Central Bank Governor, Olayemi Cardoso has said that his foreign exchange reforms have restored sanity in the forex exchange market......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
The governor said the reforms have reduced the gap between the official and parallel market rates below one per cent.
Cardoso said this on Thursday while answering questions at the 299th Monetary Policy Meeting, monitored by THE WHISTLER.
The apex bank governor said the administration has been on the path of ensuring that it delivers a foreign exchange market that is deep and transparent.
He said it is also the aspiration of the CBN to have an easy entry and exit into the foreign exchange market.
Cardoso said, “There have been a series of measures which have been taken from the outset, including, of course, wiping out the multiple exchange windows, which, quite frankly, if you recall, have cost the federal government, have cost this country an enormous amount of money.
“So, our ability to close those gaps and ensure that we have a system that is more open, more transparent, our ability to take on the whole issue of diaspora remittances and IMTOs at some point in time.”
The governor said the country has lost more to forex arbitrage and multiple exchange windows than losses from the subsidy on PMS of two per cent and three per cent of GDP.
According to the CBN boss, initiatives like the FX Code, B- Matching System positioned the market to be more open and transparent concerning buying and selling of forex.
He said, “The window or the differential in rates between the BDCs and the official rate has come down to maybe less than one per cent.
“The FX code is one in a number of measures, which importantly, have brought all the different key stakeholders together to agree on the different practices for which foreign exchange market will be transacted.
“And at that particular forum where this signing was done, I just want to remind people that we had a lot of commitment from the banks because they are major players in that industry.
“The chairman of the banks, the CEOs, and the chief compliance officers were invited to that forum. And we also at the bank were present and we all signed up to this international code, which covers ethics and we are doing business and the consequences for not doing things the proper way.”
He said the banking community has been supportive and fulfilled their own part of the bargain.
Cardoso added, “I think that clearly, in my view, has sent the right signal to the market and has brought about greater transparency and greater accountability, which is what it should be or what it should have been in the past.
“So, we have merely taken our market back to what it used to be.
“The rates have moderated, which is not surprising. And the differential between the official and the black market has also come down to very insignificant amount.”