Looking for the best HOST for your website? Hostinger is the BEST. Try It NOW!
Share on:
Some of the online microfinance institutions in the nation have reportedly been prohibited by the Central Bank of Nigeria (CBN) from initiating new accounts and acquiring new clients.
The microfinance institutions affected include Moniepoint, PalmPay, Opay, PiggyVest, and Kuda, among others.
Insiders informed Peoples Gazette on Monday that this action was taken due to suspicions that these institutions were being utilized to channel cryptocurrency and manipulate the value of the naira.
The insiders claimed that the CBN saw the ban on new accounts as necessary to combat money laundering activities that have led to the naira depreciating against the dollar once again in recent times.
Nevertheless, Moniepoint announced on its platform over the weekend that it has temporarily halted new registrations for potential clients.
It stated:
“Hello! We’ve temporarily paused new sign-ups on our platform.
“This means that you’ll be unable to open a new account at the moment. We apologise for any inconvenience this may cause.”
The Nigerian currency, the naira, experienced a setback on Monday evening as it traded at N1350 against the dollar. This marks a regression from its recent upward trend, where it reached N950 in early April.
In February, the naira faced a significant depreciation, almost reaching an exchange rate of N2000 to a dollar. In response, the Central Bank of Nigeria (CBN) collaborated with the Economic and Financial Crimes Commission (EFCC) to take action against Binance.
As a result, Tigran Gambaryan, an executive of Binance and a U.S. citizen, along with Nadeem Anjarwalla, a British Kenyan, were detained on allegations of manipulating the naira.
Recall that, The Central Bank of Nigeria (CBN) has asked Nigerians to be patient while the bank’s management works tirelessly to strengthen the naira.
The CBN Governor stated this during the Nigerian Economic Society’s (NES) 2024 public lecture, “Recent Developments in the Nigerian Foreign Exchange Market: Issues, Options, and Way Forward,” held yesterday at the CBN Centre of Excellence Hall, University of Ibadan.
Dr. Usman Opanachi, Department of Monetary Policy, CBN, spoke on behalf of the Governor of the Central Bank, Dr. Olayemi Cardoso, At the ceremony, he said:
When the naira is on trial, the CBN is also on trial. We are working tirelessly to address the difficulties, and we are hopeful that things will work out. “The exchange rate is a problem on its own.”
“Excess demand for forex in Nigeria is a legendary problem. It has just been there and over the years, the bank has implemented various strategies to address this problem. Those strategies have only been able to provide some temporary relief.”
“The Central Bank of Nigeria does not supply or produce dollars; It is naira that it produces. CBN management thinks when you hold the price of a commodity that is determined by Fx down artificially, a time comes when you will not be able to do that.”
“The thinking of the new management of CBN is that the policies you have are intended to address the problem. The approach the management has adopted is the Market forces approach. The bank now allows the market forces to play a greater role in the determination of the price of naira.”
Prof Sam Olofin, a famous economist who presented the public lecture, stated that the CBN will find it difficult to manage the foreign exchange market since parallel market forces have taken over.
He went on to say that market forces are extremely powerful and influential, and to make matters worse, the law that established foreign exchange does not enable anybody to hold them to account.
Leave a Reply