Foreign Exchange: Who Is Destroying Nigeria Economy, CBN or DMBs

Many may not know that the continuous devaluation of naira against other foreign currencies resulting in high cost of living in Nigeria may be largely caused by the arbitrary profit making operational practices by banks.

Around August this year, many of the Nigeria Deposit Money Banks, DMBs placed $100 as international transaction limit per month on their naira debit cards.

According to the Nigerian Banks, they took the action to help mitigate the continuous falling of the naira in the forex market.

Unknown to many Nigerians that the banks were just lying and concealing the hidden truth.

The truth being told, the banks arbitrarily and stylishly pushed many Nigerians to open domiciliary accounts to enable the banks make more unhealthy profits at the detriment of the Nigeria economy.

Placing $100 international limit per month on naira debit cards forced many if not millions of Nigerians to open domiciliary accounts with the extorting banks in order to be able to make returns or continued partnership with their international vendors and investors.

What millions of Nigerians now do, they withdraw their naira cash or through internet transfers of the naira cash from the extorting banks and thereafter proceed with it to the black market, sourcing for dollar cash.

The black market dealers or Bureau De Change takes advantage of the high demand of dollar cash by Nigerians; resident and living in Nigeria to start making arbitrary increase in the purchase of the dollar cash.

This may largely among other illicit act explain why the cost of buying dollar and other foreign currencies became so high in the fourth quarters of 2020 in Nigeria.

Nigerians after using their naira cash to buy dollar cash at an exorbitant rate at the black market, will return to the same extorting banks to deposit the purchased dollar cash into their domiciliary accounts.

This they do after losing thousands or millions of naira in the exchange for dollar cash in the man made arbitrary black market force.

Better said, international purchase or settlement that ought to cost you about 365 naira to one dollar if you were allowed to make the international purchase or settlement with your naira debit card as it used to be, now arbitrarily cost you 475 naira to a dollar.

More than N100 loss per every one dollar. Representing more than 20 percent arbitrary increase in the cost of production or purchase of international goods and services.

This may interest you to know among other factors why cost of eventually everything is increasingly on the high side in Nigeria most especially of recent time.

Bad as it maybe, the motive of the Deposit Money Banks for placing $100 on international transfer limit on naira debit cards is obviously an undeniable fact that the domiciliary accounts enable the banks make more profits even more than the well regulated other current accounts.

To get gold debit card or domiciliary account MasterCard cost between $15 to $20 in most of the Deposit Money Banks in Nigeria.

In some of the banks spoke with, the domiciliary debit card cost $10 monthly as maintenance charge.

The more, more Nigerians open domiciliary accounts; the more they must request for domiciliary accounts debit card if they are ready to continue or succeed in their businesses.

Customers pay 0.5 percent on every withdrawal done on domiciliary accounts.

Unlike other current accounts that charges one naira per every one thousand naira.

0.5 percent of one dollar at CBN official rate cost three naira, sixty-five kobo.

Dollar is not Nigeria official currency. Why should CBN allow people resident in Nigeria to be sourcing for dollar before they can do business with their international partners.

The big question is, do Americans living in America source for naira before they can do business with their international partners resident in Nigeria!Nigerians need to wake up and know the cause of their problems.