Ari Aisen, who is representing as deputed representative of the International Monetary Fund (IMF) in the country of Nigeria, has observed in detail the recent crypto-related directives issued by the Central Bank of Nigeria (CBN). While appearing in a virtually held news interview, Aisen endorsed various claims and remarks of CBN to state that in his opinion in Nigeria crypto is majorly used for illegitimate transactions involving corruption, money laundering, and trade of proscribed drugs.
Aisen of IMF has recently suggested that extra care should be implemented regarding the use of cryptocurrencies and digital assets within Nigeria. He also stated that he had personally looked into the directives issued by CBN regarding crypto. He suggested that he couldn’t agree more with what CBN has suggested and said that CBN was justifiable when it issued the directives. In his opinion CBN has come up with a genuine solution that is in the best interest of the Nigerian payment system and its citizens.
But the IMF representative has urged the monetary regulators in Nigeria to reconsider their stance on the exchange rates. Aisen suggested that in order to better the local financial system, Nigerian regulators must unify the rates on foreign exchanges.
There are apparently two types of exchange rates available in Nigeria these days. One, which is maintained by CBA through naira exchange i.e. @ 380:1 against USD. The other is the rate maintained by parallel market i.e. @ 475:1 against USD. Obviously, the rate of parallel market is considerably on the higher side and therefore seems to be anti-competition, suggested Aisen.
On the other hand, the Nigerian Government is of the view that by setting up a higher rate of exchange, it has been able to fulfill its obligations. However, in the viewpoint of the general public, the overvalued rate has been implemented for reducing cross-border money transfers. Particularly those cross-border transactions in which the money has been remitted within Nigeria, suggested the public.
It was later on pointed out by Nairanalytics that the remittances have considerably reduced over the past few months. The analytical company also pointed out that remittance is one of the primary sources of revenue generation for Nigeria. Any reduction in the revenue generation, would seriously and adversely affect the national economy and citizens’ well-being, said Nairanalytics. It was reported by an analytical firm that in January 2020 the remittances were on their peak. However, they dropped from US$ 2.05 Billion to just under US$ 54 Million till September i.e. less than 8 months.
In this context, Aisen was found trying to persuade CBN to regulate exchange rates in the way that uniformity is applied. This is essential because Nigeria is still struggling to the effects caused by Covid-19, said Aisen. He also urged the Nigerian Government to use state machinery to ensure transparency for unified exchange rates throughout the country.