CBN will introduce new foreign exchange laws and guidelines to combat Naira depreciation – Cardoso
The Governor of the Central Bank of Nigeria, CBN, Mr. Yemi Cardoso, has stated that the apex bank will soon introduce a new set of foreign exchange laws and guidelines to combat the depreciation of the Naira and achieve exchange rate stability.
Cardoso, who made the announcement during a speech at the 2023 Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN), on Friday, November 24, said they will also conduct a new recapitalization exercise for the banking sector, directing banks to increase their minimum capital base to a level sufficient to support the vision of a $1 trillion economy.
He said;
“Our monetary policies will aim to achieve price stability, promote sustainable economic growth, stabilize the naira exchange rate and reduce interest rates to facilitate borrowing and investment in the real sector. To ensure the smooth functioning of national and foreign foreign exchange markets, clear, transparent and harmonized rules governing market operations are essential. “New foreign exchange guidelines and legislation will be developed, and extensive consultations will be carried out with banks and foreign exchange market operators before implementing any new requirements.
“Considering political imperatives and projected economic growth, it is crucial for us to assess the suitability of our banking sector to serve the anticipated larger economy. This is not just about the stability of the financial system at the present time, as we have already established that the current assessment shows stability.
“However, we need to ask ourselves: Will Nigerian banks have enough capital relative to the needs of the financial system to serve a $1.0 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action.
“Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will guide banks to increase their capital.”
Regarding the new licensing structure for fintechs, Cardoso said:
“Technology will continue to play a key role in providing financial services and strengthening financial inclusion.
“However, recent developments in the payment services landscape have raised concerns regarding the use of the technology and the existing regulatory and licensing framework. We have observed that some licensees are operating outside of approved activities, violating the limits established for them.
“Any intentional or unintentional non-compliance will be subject to sanctions, as operators have a responsibility to ensure they are licensed for the activities they carry out.
“At the same time, as we conduct a comprehensive review of the licensing framework for payment services, we will undertake extensive consultations to develop a new regulatory and compliance framework that is suitable for the technology-driven payment services sector.”
Source: www.lindaikejisblog.com