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CBN Governor, Godwin Emefiele

CBN denies ban on forex for school tuition, medical tourism; as foreign reserves hit 12-yr low

CBN Governor, Godwin Emefiele
CBN Governor, Godwin Emefiele
The Central Bank of Nigeria (CBN) has denied slamming any ban on sale of dollars for foreign school fees as well as on medical bills abroad.
The bank, however, explained that it would henceforth prioritise sale to sectors that are more productive in generating employment and adding value to the Nigerian economy.
Commercial Banks’ managing directors in the country had, last Friday, revealed that payment of foreign school fees alone gulped 15 per cent of the total foreign exchange supply, far more than the amount that goes to the importation of raw materials, which, according to CBN, was misconstrued to mean that a stoppage on the sale of foreign exchange for the payment of school fees.
The CBN assured that it had no immediate intention of banning the sale of foreign exchange to those schooling abroad, but stressed that the top priority was to ensure that forex went to those that would add value to the local economy.
According to CBN, ‘frivolous’ demand for foreign exchange had depleted the naira’s value to new lows.
The external reserves continued to decline, reaching almost a 12-year low as it crossed the $29 billion mark to a 30-day moving average of $28.931 billion as at Friday January 7, 2016. This brings the total decline of the reserves from the beginning of December 2015 to 3.17 per cent decline.
The reserves which was at $29.880 billion as at December 1, 2015 had dropped by 2.7 per cent within the month to $29.069 the last day of last year before a further shed of $138.668 million dollars between December 31, 2015 and January 7, 2016.
Having hovered around $30 billion since September last year, the reserves began a steady decline in December, coming down to $29 billion which it maintained throughout the month before it hit $28 on January 4, 2016 – the latest figure given by the CBN.
The external reserves had depreciated by 14.1 per cent last year, having fallen from $34.46 billion by December 31, 2014 to $29.069 billion by December 31, 2015, according to figures given by the CBN on its website, covering barely four months of imports.
A source within the CBN explained that the decline was due to the fact that the level of inflow accrued into the reserves was slower than the level of outflow during the 30-day period.

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