As the crisis that rocked the financial system appears to settle down, the Central Bank of Nigeria (CBN) has reiterated its earlier stance, insisting that any sacked chief executive officer of the rescued banks found culpable will go to jail as a deterrent to others. Sanusi Lamido Sanusi, central bank governor who spoke at HARDtalk, a BBC programme, said what happened to the rescued banks was as a result of poor risk management and regulation.
While answering questions at the programme on Monday, he said shareholders made a lot of profits at the expense of depositors. For what the chief executives did to the banks, he said, bankers must show remorse over their actions.
Negative shareholders’ funds are one of the main concerns for potential investors in Nigeria’s rescued banks despite the fact they have all returned to profit this year, he said.
He, however, agreed that he (Sanusi) may have made some mistakes in the past, but that he never made any mistakes in any of the key decisions he has so far taken.
Meanwhile, the naira weakened against the dollar on the inter-bank market on Monday even after the central bank increased supply at its bi-weekly foreign exchange auction, traders said.
The local currency traded at N155.70 to the dollar on the inter-bank market compared to N155.45 at Friday’s close with strong demand from bureaux de change unrelenting, traders said.
The central bank sold all the $586.42 million demanded at its dollar auction on Monday at a rate of N151.30, compared to $400 million at N151.27 at the previous auction last Wednesday.
The regulator initially offered $600 million on Wednesday.
Traders said dollar demand from bureaux de change and other transactions that cannot go through the official window -- which is limited to trade-backed dollar sales -- outweighed the impact of the central bank’s increased dollar supply.
“The fact that we cannot trade foreign exchange purchased at the official window among ourselves (inter-bank) is causing a disconnect between the two markets,” one dealer said.
Dealers said dollar inflows to the inter-bank market remained weak, and expected the naira to weaken further.
State-run energy firm, NNPC, sold around $400 million to some lenders on Friday, but it was not enough to satisfy the market.
Traders expect the naira to remain weak through presidential, National Assembly and state governorship elections next month as they believe much of the dollar demand is being fuelled by political uncertainty.
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