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UPDATE 2-Central Bank of Nigeria Keeps Rates Stable and Targets Illegal Currency Brokers

By on September 17, 2021 0

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By Chijioke Ohuocha

ABUJA, Sept. 17 (Reuters) – Nigeria’s central bank kept its benchmark interest rate unchanged at 11.5% on Friday, its governor said, adding that the bank would seek to flush out illegal traffickers in the forex market .

The Nigerian naira has hit new lows in the unofficial market following actions by the central bank to channel demand for dollars to official platforms.

Governor Godwin Emefiele said that as part of the bank’s attempt to crack down on illegal currency trading, his investigations showed that the ABOKIFX currency trading platform https://abokifx.com/ was being used to manipulate rates exchange rate.

“The bank therefore maintains its determination to continue restructuring the exchange rate market and will pursue all recent policies aimed at cleaning up the market to improve transparency and efficiency and eliminate illegal currency brokers,” Emefiele said.

ABOKIFX, which is registered in Britain, earlier told Reuters it had not been contacted by the central bank or its Nigerian banks about an investigation.

Nigeria has multiple exchange rates operating in parallel, a system put in place during an oil crash in 2016 as the government sought to avoid a large official devaluation of the naira out of national pride.

Africa’s leading economy, Nigeria is under pressure from foreign lenders, including the World Bank, to reform its exchange management system and consolidate its multiple exchange rates.

Emefiele said that the deceleration in inflation and the continued recovery of the economy convinced the central bank to keep rates stable, a position supported by all members of the monetary policy committee.

Nigeria’s annual inflation slowed in August for a fifth consecutive month to 17.01% after the pace of food price growth slowed.

“MPC welcomed the robust recovery in output growth in the second quarter and the continued decline in inflation in August 2021,” Emefiele said. (Reporting by Chijioke Ohuocha; writing by MacDonald Dzirutwe; editing by)