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Senate Recommends N200/$ Exchange Rate for Pilgrims, CBN Reacts

The Senate has recommended the concession of N200 to $1 by the Central Bank of Nigeria (CBN) to intending pilgrims embarking on the 2017 Hajj, to bring the cost of the pilgrimage down to a bearable level.

This is in spite of the CBN's benchmark of N305 to $1, for the 2017 Hajj operations, approved by the fedeal government.
The Senate also urged the government to extend concessions on naira-dollar exchange rate to the National Hajj Commission (NAHCON) and the Nigerian Christian Pilgrims Commission (NCPC) once every year for pilgrimages.

The position of the lawmakers followed the adoption of the recommendations of its Senator Monsurat Sunmonu (Oyo Central)-led Committee on Foreign Affairs, on the alleged extortion of pilgrims by NAHCON.

The report was borne out of an investigation of the circumstances surrounding the present feeding regime and exorbitant airfare as fixed by NAHCON, with a view to exposing any sharp practices.
Thisday

CBN Replies

The Central Bank of Nigeria, CBN on Friday reacted to claims by the Senate that it is selling dollars to some businesses at an unofficial rate of N200.

On Wednesday, the Senate in a resolution asked the Federal Government to direct the CBN to supply dollars at a subsidised exchange rate of N200 to intending pilgrims to either to Saudi Arabia or Israel.

The resolution followed a motion by the former governor of Kebbi State, Adamu Aliero, APC-Kebbi, requesting, as a matter of urgency, concession to be granted as a policy every year to the pilgrims.
Mr. Aliero said his request followed confirmed information he had that the apex bank was allocating foreign exchange to some businesses at N200 to the dollar.

“The committee strongly recommends the concession of N200 to $1 for 2017 Hajj, to bring down the cost to a bearable level,” Mr. Aliero said. He did not name the businesses.

Based on the former governor’s submission, the committee on foreign affairs, while submitting its report on alleged “Extortion of Pilgrims” by the National Hajj Commission, adopted the recommendation.

But, the CBN in a response to enquiries by PREMIUM TIMES on Thursday, denied the allegations that it has been allocating FOREX to any business at N200.
“It is not true,” CBN spokesperson, Isaac Okorafor, said in a response to an SMS to him on Friday.

“We (CBN) are NOT selling FOREX to anyone at N200 to the dollar. The lowest rate in the entire market is the inter-bank rate, which ranges between N305 to N315,” he explained.

Since June 2016, when the CBN unveiled the flexible FOREX policy, the apex bank was partially stripped of the powers to intervene and fix the exchange rate of the Naira against any currency.

With the policy, which effectively removed CBN controls of the exchange rate, abolished the previous N197-199 band to the dollar, with exchange rates in the international currency market becoming a subject determined purely by the prevailing forces of demand and supply.
The new arrangement created a single inter-bank trading window, which determines the exchange rate of the dollar to the Naira.

The chief executive of Pan Africa Development Corporation, Odilim Enwegbara, who was one of the Nigerians that reacted to the resolution by the Senate on Thursday, said under the prevailing floating exchange rate policy, the CBN was handicapped to meet the lawmakers’ request.

“By virtue of the CBN floating exchange rate policy, the exchange rate is determined by market forces. Any intervention by the CBN is illegal,” Mr. Enwegbara said.

Most other Nigerians, who commented on the issue, have condemned the resolution, describing it variously as ridiculous, selfish, and self-serving.
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