CBN Is Manipulating Forex – Prof Leo Ukpong

Prof Leo Ukpong of the University of Uyo has faulted the latest foreign exchange policy of the Central Bank of Nigeria, describing it as manipulative.

The Professor of Financial Economics in an interview stated that the gap between the official rate and the parallel rate (popularly called black market) was high.

At the time of this report, FX rate on the CBN website was NGN411.74/$1 while it’s NGN565/$1 at the parallel market, thereby creating a gap of NGN154, “because to me anything above N50 is too high,” he said.

Leo, who believed that Bureau De Change (BDC) operators have crucial roles to play in stabilising the fx market stated that BDC is to make the market more liquid.

He pointed out that by cutting the supply of forex to the BDCs, Nigeria’s apex bank “is restricting supply to the market, keeping in mind that the banks do not have enough to meet demand.”

While CBN pegged the official exchange rate at NGN411.74/$1, Professor Leo said restriction placed on the activities of BDC has caused higher demand, which according to him, the commercials banks couldn’t meet.

“When the supply is lower than the demand, the price of the commodity will go up, the same thing is playing out with the forex market.

In fact, the value of the naira against the dollar should even be higher than N450 but CBN is manipulating it, to keep it low,” Leo was quoted in an interview published by The Punch on December 8, 2021

What Does It Mean For CBN To Manipulate Forex?

In the forex market, manipulation is a deceptive way of putting out an official exchange rate of what buyers can not obtain when they tried to purchase forex at the designated banks that are accredited by CBN to handle forex.

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For instance, some of the commercial banks in Nigeria sell $1 as high as NGN480 when Nigerians tried to order online or pay for services online. In one of our publication, we reported how one of the banks charged NGN480/$1

How It Began

On July 27, 2021, the CBN governor Godwin Emefiele announced that the apex bank would no longer sell forex to over 5,000 BDC operators in Nigeria, accusing them of indulging in unwholesome acts in the FX market.

Emefiele directed businessmen and women, students who need forex to make payment for foreign school fees, and for Personal Travel Allowance (PTA) to approach commercial banks that have licenced to do so.

The policy caused a scarcity of the FX in the market pushing the price of the available FX to an All-Time High (ATH) of NGN580/$1 in the history of Nigeria’s FX market.

The CBN that had earlier banned cryptocurrency in February 2021, would launch eNaira, a Central Bank Digital Currency (CBDC) which is a virtual form of Nigeria’s fiat currency (naira).

The launch summarily caused a panic in the FX market, which made the naira to made a little gain against the US dollar and its competitors in the fx market.

The lowest it had recorded since the CBN stopped the sales of FX to BDCs was NGN525. The apex bank had been trying all it could to defend the naira.

One of such actions was to accuse abokifx, FX tracking website, that it was using its platform to manipulate the exchange rate with the aim of making gains from the difference.

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CBN Policy Not Sustainable

The UNIUYO lecturer in the interview pointed out that the CBN doesn’t have enough FX to sell to importers, saying the inflation on goods is a result of what importers bought.

“The only reason they sell those commodities at such prices is because they cost them more. What the CBN is doing is saying ‘we want things to be cheaper for Nigerians so let’s place the exchange rate at N410,” saying everyone who needs dollars is unable to get it NGN410.


For CBN to get it right, the university don suggested that the Federal Government should invest more in local production so as to reduce the craze for foreign goods and services.

Prof Leo Ukpong advised the FG to invest heavily in education so as to eliminate the strike action usually embarked upon teachers, upgrading of the hospitals in Nigeria so that demand for foreign medical fees would be reduced.

He called on the CBN to tackle the issue of inflation, stating that the apex bank should put in place policies that would boost the confidence of Nigerians in the diaspora who have dollars outside the country to bring it in without so many restrictions.

“CBN should make the regulations easier to move dollars in and out of the country. With that, dollars will flow into Nigeria” Prof Leo Ukpong advised.

What’s CBN doing?

The Godwin Emefiele-led CBN has introduced several intervention funds to boost local production. One of them is the gas intervention fund.

Unfortunately, Marketers of petroleum products in the downstream oil sector lamented in December 5, 2021, that they were unable to access the N250bn gas intervention facility.

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Another one is the Smallholder Economic Interest Farmers Agricultural Cooperative known as SEIFAC loan which is a credit facility to support genuine farmers across the country. Again, non-farmers were discovered to have fraudulently accessed the funding.

The latest is the 100 for 100 Policy on Production and Productivity (PPP) with the objective of eliminating over-reliance of Nigeria on imports. If the PPP is properly monitored by the CBN, it’s capable of increasing the value of the Naira in the fx market.


  • Opeyemi Quadri

    Ope is a finance writer and researcher with 10+ years of experience in content creation. His interests cut across investment, foreign exchange, government policies and politics. Ope is available on Twitter @OpeQuadri.

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