Cardoso: $26bn passed through Binance in one year – New Telegraph Newspaper
New Telegraph
Determined to curb the current crisis in the nation’s financial sector, the Central Bank of Nigeria (CBN) took some major decisions yesterday during the Monetary Policy Committee (MPC) meeting in Abuja. The meeting, which is the first under the current CBN Governor, Mr. Olayemi Cardoso, also provided an opportunity to unveil the level of illegality in foreign exchange dealings by unscrupulous persons.
Briefing journalists after the meeting, the apex bank boss, while speaking on the activities of crypto currency and forex policies initiative of the bank, said in the course of investigation it was discovered that about $26 billion passed through Binance Nigeria in one year. He said to stem the tide the CBN had resolved to collaborate with other regulatory bodies, whose jurisdictions border on protecting investors and the forex market in the country.
He said: “We have a responsibility to protect Nigerians. It’s with that in view that you have the CBN collaborating with other agencies of government like the Securities and Exchange Commission (SEC). “The collaboration with SEC is not just by virtue of the fact that the DG of the stock exchange is a member of the MPC. The fact is they have a very important role to play with respect to the way of protecting the interest of numerous investors they have a very minor role to play there. “And in that regard, I am pleased to note that the collaboration we have had has been able to identify some of our fears really and to confirm some of our fears.
“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows at best. In the case of Binance, in the last one year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify.
“There is a lot that is going on now as a result of collaboration between the different agencies, which include EFCC, the police and the office of the NSA; and in due course, as we progress and have more information to share we will certainly share with you.” Giving insights into the Committee’s decision to jerk up the lending rate by 400 basis points, he cited consistent inflationary pressure as the greatest challenge of the economy. Rising from the meeting, all 12 MPC members in attendance voted unanimously to raise the Monetary Policy Rate (MPR) by 400 basis points to 22.75 per cent from 18.75 per cent in July, 2023. In the same vein, the Cash Reserves Ratio (CRR) was jerked from 32.5 per cent to 45.0 per cent, while it retained liquidity ratio at 30 per cent and adjusted the asymmetric corridor around the MPR to +100/-700 from +100/-300 basis points. Advancing reasons for upward adjustments in lending rate by 400 basis points, Cardoso noted that inflation and price stability had become a concern of every Nigerian.
While justifying recent policies and actions taken by the bank in the management of forex, he said the policies were well thought out and were designed to curb abuses. “It is very important in general that we have a market that has a good amount of liquidity; where distortion are minimised and by that I mean create an environment where people can come in and out as they please; where distortions that are present are taken out so that the market functions a lot better and also is a lot more transparent and regulated by us. “Where the market is able to attract liquidity and can function properly. In the recent past, we have been able to at least through certain monetary tools begin to attract liquidity into the system. “For example, you may be aware that recently we attracted up to $2 billion as a result of the tools that we had used to calibrate interest rates.
Expect to see it improving as time goes on,” Cardoso promised. He noted that forecasts indicated the economy would grow in 2024 by 3.38 per cent (CBN), 3.88 per cent (FGN) and 3.00 per cent by the International Monetary Fund (IMF) projection. Cardoso said external reserves had seen fresh accruals as, according to him, gross external reserves stood at $34.51 billion on February 20, 2024, compared with $32.23 billion at endJanuary 2024. Giving updates on clearance of the forex backlog (FX forward contract) due to foreign airlines and others, Cardoso said Nigeria would clear all identified and genuine requests. “We are committed to clearing the backlog of identified and genuine requests that are pending. And I can tell you that just today we paid out another $0.4billion ($400 million) to those that were so identified and the bank is committed to doing so to those that are genuinely identified and proven,” he added. Cardoso defended various circulars recently sent out on forex policy, insisting they were not knee-jerk circulars. “I can assure you we had different layers of regulations going to test and to look at the banks and to see where there were in fractions and to see where people were not complying and ensuring the circulars were very well understood,” he declared.
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© 2023 All right reserved. New Telegraph, Nigeria
© 2023 All right reserved. New Telegraph, Nigeria