The decision by the Nigerian National Petroleum Corporation, NNPC, to withdraw $1.2 billion (N240 billion) from banks, has triggered more dollar liquidity squeeze in the money market, causing the value of the naira to depreciate further at the parallel market.
The oil corporation, according to multiple sources, wrote the lenders last Tuesday, intimating them of its intention to transfer its domiciliary accounts to the Central Bank of Nigeria (CBN).
A top NNPC official, who confirmed the withdrawal Tuesday said the decision to move the accounts to the CBN stemmed from the ongoing probe of the corporation, stressing that it was to harmonise all “their accounts.”
A CBN official, who corroborated the NNPC official’s statement, said the corporation’s directive to transfer its funds to the Central Bank was in order given the fact that the CBN is a banker to the government and that the oil corporation is also an institution of the government.
He, however, said the funds would boost the CBN’s reserves and improve its ability to stabilise the naira, which has received severe bashing at the parallel market, where forex end users that do not need documentation source for their dollars.
Besides, he said the decision to move the NNPC accounts to the CBN might not be unconnected with the ongoing probe of the oil swap deal and NNPC.
However, as at Tuesday, there were signs that the withdrawal of the funds has continued to jolt the money market, as banks, which had already created assets with the dollars, were said to be running helter-skelter to restructure the mis-matches that had been created with the NNPC funds.
A treasurer in one of the tier-one banks said lenders may have to start calling back their dollar loans extended to customers.
“This is a serious problem for us because the CBN has not …Read More
Source:: New Mail