Only painful sanctions by CBN can stop banks from currency round tripping
Beyond visiting banks very close to its head office in Abuja to check and give customers powers to report any erring bank frustrating flexible access to foreign exchange at official rates by the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, ending cases of forex round tripping goes warnings.
Industry analysts had continued to advise the apex bank against mere warnings and periodic checks on banks against round tripping which has become more of an economic sabotage to the economy.
Round tripping is an unwholesome practice where banks are reported to divert foreign exchange obtained from the apex bank at official rate to the parallel (black) market, thereby creating artificial scarcity by denying responsible end-users of foreign exchange to meet their basic transactions.
Industry pundits have made it clear that CBN’s key headache remains the fact in spite of CBN’s frequent liquidity interventions in the foreign exchange market to ease the problems being experienced by users, scarcity of foreign exchange is reported at different branches of banks nationwide.
The apex bank had tried its best to make sure that foreign exchange can be accessed at official rate for Personal Travel Allowance (PTA), Business Travel Allowance (BTA), payment of school fees abroad, medicals and other invisibles accessed forex at flexible rates, but many commercial banks have taken it upon themselves to frustrate the good policy of the CBN.
Whereas the had given the National Economic Council (NEC), apex bank a mandate to bridge the gap between the official rate and ‘black market’ which is a sure way of growing dollar liquidity to end-users, it has become clear that the apex bank apparently lacks the heart and courage to do the needful which is setting a strategic example with a very weighty sanction on any bank so confirmed in the act.
