Addressing Exchange Rate Impact: ONSA, CBN join Forces to Tackle Challenges on Economic Stability

As part concerted effort to safeguard Nigeria's foreign exchange market and speculative activities, the Office of the National Security Adviser (ONSA) and the Central Bank of Nigeria (CBN) are joining forces to address challenges impacting the nation's economic stability.

The joint effort is a demonstration of the Nigerian government's commitment to improving its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework and to exit the grey list of the Financial Action Task Force.  

According to the Head, Strategic Communication, Office of the National Security Adviser, Zakari Mijinyawa, the efforts will also make progress in ensuring a stable and transparent foreign exchange market, fostering investor confidence, advancing the nation's economic well-being as well as combat speculative activities contributing to heightening rates in the country. 

As the CBN's proactive measures to stabilize the foreign exchange market and stimulate economic activities have been commendable, the effectiveness of these initiatives is being undermined by the activities of speculators.

This speaculators, the statement stressed are both domestic and international, operating through various channels, thereby exacerbating the depreciation of the Nigerian Naira and contributing to inflation and economic instability and hardship on citizens.

The CBN had in a move to address the exchange rate volatility had initiated a comprehensive strategy to enhance liquidity in the forex market, including unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.

While the Economic and Financial Crimes Commission (EFCC) has also raised a 7,000-man special task force across its 14 zonal commands to clamp down on dollar racketeers to reduce the pressure on the naira. 

But inspite of all these efforts, recent intelligence reports have highlighted continued illicit activities within the Nigerian foreign exchange market. The ONSA and CBN are therefore embarking on a collaborative approach to tackle the highlighted infractions. 

The partnership according to the statement from the ONSA will involve a coordinated effort with key law enforcement agencies, including the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service and the Nigeria Financial Intelligence Unit (NFIU).

The primary objective of this alliance is to systematically identify, thoroughly investigate and appropriately penalize individuals and organizations involved in wrongful activities within the FX market. 

This will be done by leveraging the expertise of these agencies, with the aim of deterring malicious practices, protect investor interests, and promote sustainable economic growth.