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Tag: foreign exchange

  • CBN alerts Nigerians to fake foreign fund transfers

    CBN alerts Nigerians to fake foreign fund transfers

    The Central Bank of Nigeria (CBN) has advised members of the public to be cautious of fake SWIFT Messages on foreign exchange remittances to their Nigerian bank accounts.

    The Acting Director, Corporate Communications Department of the apex bank, Hakama Sidi-Ali, gave the advice in a statement on Tuesday in Abuja.

    Sidi-Ali said that the CBN had been inundated with claims by some stakeholders about the conclusion of foreign currency transfer to their Nigeria bank accounts.

    According to her, stakeholders like private entities, individuals, law firms, and government agencies complained that foreign currency funds allegedly transferred to them by foreign entities have yet to be credited to their accounts with Nigerian banks.

    ”In some instances, the claimants alleged that the funds were withheld by either the beneficiary bank in Nigeria or the CBN and requested the assistance towards releasing the funds to them.

    “The requests are usually supported with fake documents such as SWIFT MT103, SWIFT
    Ack copy, etc.

    “It has become imperative to state that the SWIFT ack copy and SWIFT MT103 that these claimants usually attach as evidence of remittance to beneficiary banks in Nigeria are not reliable,” she said.

    The director said that the SWIFT messages were always not traceable on the SWIFT platform, and the funds had not been received to enable their application to the beneficiary’s account.

    “In a situation where a fund transfer beneficiary’s receiving bank claims non-receipt of funds remitted by the foreign entity, the standard practice is for the sending customer to contact the sending bank.

    “The purpose is for the sending bank to send a tracer to trace where the fund is hanging and recall it.

    “For the avoidance of doubt, we wish to state emphatically that the CBN neither provides
    correspondent banking services for Nigerian banks in foreign payments nor maintains accounts for private business entities.

    “Consequently, petitioners’ claim that the alleged expected inflows for onward credit into the accounts of private business entities are trapped in the CBN is not only spurious but deceitful,” she said.

    She urged the general public to be careful with such unauthentic SWIFT messages and documents containing spurious claims of non-application of substantial foreign currency funds allegedly transferred into the beneficiary’s account.

    She warned that the CBN would not hesitate to report any bank customer making unsubstantiated and illegitimate claims to law enforcement agencies for
    investigation and prosecution.

    SWIFT messages are messages sent through the Society for Worldwide Interbank Financial Telecommunication network to facilitate financial transactions between banks and financial institutions.

  • CBN sells $543m to banks to check market volatility

    CBN sells $543m to banks to check market volatility

    The Central Bank of Nigeria (CBN) says it sold 543.5 million dollars to authorised dealer banks between September 6 and September 30.

    According to a statement issued by Omolara Duke, the Director, Financial Markets Department of the CBN, the transaction was through a two-way quote at the Nigeria Foreign Exchange Market (NFEM) on 11 dealing days.

    Duke said that the spot sales was to reduce observed market volatility driven by high demand for commodity imports and seasoned demand for fx.

    She said that the value date for all the transactions was T+2. The T+2 refers to the settlement dates of security transactions that occur on a transaction date plus two days.

    “This statement is to educate and provide guidance on the general public the pricing of FX. This is by taking a clue from the range of rates at which gx was sold by the CBN to authorised Dealers.

    “The CBN will continue to facilitate the supply of fx into the NFEM as part of its holistic fx management strategy,” she said.

    Recall that the CBN had earlier announced the introduction of an Electronic Foreign Exchange Matching System (EFEMS), for Foreign Exchange (FX) transactions in NFEM.

    Duke said that the new system was expected to enhance governance, transparency, and facilitate a market driven exchange rate that would be accessible to the public.

    “This development is expected to reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.

    “Authorised dealers will subsequently conduct all foreign exchange transactions in the interbank Fx market on the EFEMS approved by the CBN where transactions will be reflected immediately,” she said.

    She said that there would be a two-week test run in November, adding that the apex bank would publish real time prices when the EFEMS becomes operational.

    She said that the CBN would also buy and sell orders from the system and in collaboration with the Financial Markets Dealers Association (FMDA), publish the rules for the EFEMS.

    “The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants.

    “Authorised dealers are, therefore, required to comply with extant guidelines and regulations governing the Nigeria foreign exchange market.

    “They should ensure that all necessary documentation, training, and systems integrations are concluded ahead of the go live date,” she said.

  • Real reason CBN introduced EFEMS for FX transactions

    Real reason CBN introduced EFEMS for FX transactions

    The Central Bank of Nigeria (CBN) has announced the introduction of an Electronic Foreign Exchange Matching System (EFEMS) for Foreign Exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).

    According to a statement issued by Omolara Duke, the Director, Financial Markets Department , the EFEMS will be implemented latest by Dec.1. Duke said that the new system was expected to enhance governance, transparency, and facilitate a market driven exchange rate that would be accessible to the public.

    “This development is expected to reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market. Authorised dealers will subsequently conduct all foreign exchange transactions in the interbank Fx market on the EFEMS approved by the CBN where transactions will be reflected immediately,” she said.

    She said that there would be a two-week test run in November, adding that the apex bank would publish real time prices when the EFEMS starts becomes operational. She said that the CBN would also buy and sell orders from the system and in collaboration with the Financial Markets Dealers Association (FMDA), publish the rules for the EFEMS.

    “The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants. Authorised dealers are, therefore, required to comply with extant guidelines and regulations governing the Nigeria foreign exchange market. They should ensure that all necessary documentation, training, and systems integrations are concluded ahead of the go live date,” she said.

  • CBN injects 122.671m Dollars into FX market

    CBN injects 122.671m Dollars into FX market

    The Central Bank of Nigeria (CBN), has sold the sum of 122,671 million dollars to 46 authorised dealers.

    According to a statement issued by the apex bank’s Director in charge of Financial Markets, Dr Omolara Duke, the move is aimed at promoting stability as well as to reduce market volatility in the foreign exchange market.

    Duke said that 67.5 million dollars of the total sale was sold to 27 authorised dealers, while the sum of 2.5 million was bought from one authorised dealer on July 10.

    She said that the range of the bid for the July 10 sales was between N1,480 and N1,500 to the dollar, while the value date for the payments, going by the settlement cycle of two days was July 12.

    “Similarly, on July 11, the sum of 55.171 million dollars was sold to 19 authorised dealers at N1,540 to the dollar.

    “The value date for the payments of the spot sale is July 15,” she said.

    She urged all authorised dealers to ensure that foreign exchange purchases from the CBN were used exclusively for trade-backed transactions, which should be reported within 72 hours.

    Duke said that the CBN supplied FX to the market to improve liquidity through spot sales to authorised dealers using two-way quotes.

    She assured that the CBN would continue to ensure stability in the FX market.

  • Senate rejects bill to amend Foreign Exchange act

    Senate rejects bill to amend Foreign Exchange act

    The Senate on Thursday, rejected a Bill seeking to amend the Foreign Exchange Act, 2004.

    The piece of legislation also sought to make provisions for  control, monitoring and supervision of transactions conducted in the Foreign Exchange Market.

    The bill was sponsored by the Chairman, Senate Committee on Finance, Sani Musa (APC-Niger) during plenary.

    The proposed law is titled: “The Foreign Exchange (Control And Monitoring) Bill, 2024 (SB. 353) was read for the first time on Tuesday, Feb. 20.

    In his Lead debate, Musa described the bill as an important legislation that sought to repeal the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004.

    Musa said the proposed law would provide for  regulation, monitoring and supervision of the transactions conducted in the market and for related matters.

    He said it would also contribute to the sound development of the national economy by striving to facilitate foreign transactions and maintain an equilibrium of balance of international payments.

    “The Bill seeks to stabilise the value of currency by ensuring the liberalisation of foreign exchange transactions to maintain an equilibrium of balance of International payments.

    “It will also stabilise the value of currency by ensuring liberalisation of foreign exchange transactions and of other foreign transactions by revitalising
    market functionality.

    “The newly introduced clauses will enable the CBN to determine the basic exchange rate of purchase and sale of foreign exchange,” Musa said.

    Most senators in their various contributions,  expressed fears that a fresh legislation,  seeking to monitor or control activities of the foreign exchange market apart from what the CBN was doing, could be counter productive.

    Some of the senators who expressed serious reservations over the proposed law were Solomon Adeola (Chairman Committee on Appropriation ); Tokunbo Abiru (Chairman, Banking, Insurance and other Financial Institutions) and Aliyu Wadada (Chairman, Senate Public Account Committee).

    For instance, Sen. Ibrahim Dankwambo (APC-Gombe) noted that the law, if passed, would confuse Nigerians.

    He was of the opinion that any further law aimed at regulating the foreign exchange market should come from the executive arm of government to avoid crisis in the sector.

    Also contributing, Sen. Adams Oshiomhole (APC-Edo) said: “we have to be careful because we cannot speculate. Anything done in this house, Nigerians will take it very seriously, because we have the power to make laws.

    “Senators who have spoken, have  summarised and amplified meticulously, the contradictions and negative implications of passing the law.

    “I believe that the bill should not attract further hearing because we are trying to take over the monetary policy regulations of the CBN if we go ahead with it.

    “If the executive arm of government likes, let them bring a Bill to further strengthen the regulatory powers of the CBN. It is not our work.”

    The President of the Senate, Godswill Akpabio, urged Musa to withdraw the proposed law for further consultations but the senator refused to do so.

    Akpabio subsequently called for voice vote to determine its approval or rejection for second reading and majority of the lawmakers voted against it.

  • CBN has cleared all outstanding FX obligations – Director

    CBN has cleared all outstanding FX obligations – Director

    The Central Bank of Nigeria (CBN) says all valid foreign exchange backlogs have now been settled.

    This is according to a statement by CBN’s Acting Director, Corporate Communications, Mrs Hakama Sidi.

    Sidi said that the step was in fulfilment of a key pledge of the CBN Governor, Yemi Cardoso, to process an inherited backlog of seven billion dollars in claims.

    She said that the CBN recently concluded the payment of 1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the fx backlog.

    She also said that independent auditors from Deloitte Consulting meticulously assessed these transactions, ensuring that only legitimate claims were honoured.

    According to her, any invalid transactions were promptly referred to the relevant authorities for further scrutiny.

    Meanwhile, Cardoso said that the apex bank made clearing the fx backlog a priority to restore credibility and confidence in the Nigerian economy.

    “It was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions.

    “This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us,” he added.

    Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in the last Monetary Policy Committee (MPC) meeting.

    The aim, according to the CBN, is to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy.

    Cardoso had used the MPC meeting and a subsequent conference call with foreign portfolio investors to set expectations for sustained increase in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.

    The CBN, afterwards, reported a significant increase in external reserves, rising by 993 million dollars to 34.11 billion dollars as of March 7, the highest level in eight months.

    The apex bank reported that month-on-month increase was driven by a marked advance in remittance payments by Nigerians overseas.

    It said that higher purchases of local assets, including government debt securities, by foreign investors , was also responsible for the increase.

  • Foreign Exchange: Naira gains weight twice in one week

    Foreign Exchange: Naira gains weight twice in one week

    The Naira has gained weight significantly against the US Dollar for the second consecutive time in the period of just one week at the foreign exchange market.

    Figures  from FMDQ indicate that the Naira appreciated N1542.58 per US dollar on Wednesday from 1,551.24 on Tuesday.

    This shows a significant improvement of N8.63 or 0.6 per cent gain compared to the N1,551.24 recorded at the close of trading on Tuesday.

    Accordingly, the Naira has gained N36.66 since Monday, when it traded for N1,574.62 per US dollar at the official forex market.

    This is as the US dollar supply surged on Tuesday by 76.62 per cent, according to FMDQ data.

    Furthermore, at the parallel market, the Naira dropped to N1,860 per US dollar on Wednesday from N1,740.00 on Tuesday.

    The margin shows clearly   that the margin between the official and parallel forex markets’ exchange rates has widened.

    The development comes barely 24 hours after a clampdown on illegal Bureau De Change operators by officers of the Economic and Financial Crime Commission, EFCC, in Wuse Zone 4.

    It would be recalled that in the past weeks, the Central Bank of Nigeria has introduced several policies to checkmate the continued fluctuations of the Naira in the FX market.

    The latest policies by CBN were the new guidelines issued to stop the payout of Personal Travel Allowance, PTA, and Business Travel Allowance, BTA, in cash.

     

  • We will tackle pressure on foreign exchange – FG

    We will tackle pressure on foreign exchange – FG

    The Federal Government says it is actively addressing the issue of pressure on foreign exchange in Nigeria.

    Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, said this on Tuesday, during the inauguration of two new factories and extension of the Tropical General Investment Group (TGI) at the Sagamu Inter-change in Ogun.

    Uzoka-Anite emphasised the government’s commitment, under the leadership of President Bola Tinubu, to encourage industrialisation and allocate necessary resources to boost economic recovery.

    She added that the present administration also aims removing obstacles that hinder business growth.

    “President Bola Tinubu is determined to tackle the challenges of unemployment, foreign exchange pressure, and economic diversification conclusively.

    “Manufacturing and value chain addition is necessary for the overall development of our country. There is no way around it; the cause of inaction is huge and we cannot afford it,” she said.

    In his remark, Gov. Dapo Abiodun emphasised the importance of corporate social responsibility by companies on its host communities.

    Abiodun commended the TGI Group for its positive impacts on the community and its contribution to the success story and economic growth of Ogun State.

    Abiodun added that when companies engage in corporate social responsibility, the community takes ownership and supports its overall development.

    “I want to thank the TGI Group because you are a classical example of the success story of Ogun State; you are a reference point, a shinning example of foreign direct investment in the country.

    According to the governor, Ogun is the most improved economy and one of the two most resilient states in the country.

    Earlier, Executive Director, Food Distribution, TGI, Mr Roy Deepanjan, said the Group sources about 80 per cent of its raw materials locally.

    This, he noted, shows the company’s commitment to supporting local industries and the economy.

  • How Nigeria can enhance foreign exchange earnings – Customs CG

    How Nigeria can enhance foreign exchange earnings – Customs CG

    The Nigeria Customs Service (NCS) says the African Continental Free Trade Agreement(AfCFTA) stands as a golden opportunity for Nigeria to significantly enhance its foreign exchange earnings.

    The Comptroller General of Customs (CGC), Comptroller Adewale Adeniyi, said this at the Distinguished Lecture Series organised by the Nigerian Institute of International Affairs (NIIA), on Thursday, In Lagos.

    The lecture had the theme: “Nigeria’s Economic Growth and Development: Reforming and Positioning the Nigeria Customs Services for the AfCFTA and other Emerging Challenges.”

    According to Adeniyi, the expansive marketplace created by AfCFTA can serve as a catalyst for increased trade, attracting diverse businesses and stimulating economic growth.

    He said Nigeria, with her rich array of sectors from agriculture to technology, had the potential to capitalise on this opportunity by strategically positioning herself within the continental trade framework.

    The CG said that Nigeria should focus on targeted sector-specific initiatives, invest in infrastructure to facilitate seamless trade, and actively engage in cross-border collaborations to solidify its position as a key player in the African trade landscape.

    He said this could be worked on by establishing task forces or committees dedicated to each key sector to identify opportunities, address challenges, and formulate tailored plans for growth within the AfCFTA framework.

    Adeniyi also stressed that the success of AfCFTA is hinged on the crucial factor of policy alignment, necessitating Nigeria’s commitment to crafting policies that synergised with continental objectives.

    “This policy harmony must extend to infrastructure development, balancing the trade facilitation mandate of the NCS with revenue generation expectations.

    “In navigating this balancing act, the NCS must engage Africans at the heart of its operations, fostering a collaborative dialogue through transparent communication channels.

    “The crescendo towards economic brilliance requires prioritising infrastructure development, continuous policy adaptation, and stakeholder engagement.

    “As we delve into the intricacies of Nigeria’s economic growth, development, and the dance of trade, remember that behind every policy and every customs checkpoint, there’s a story,” he said.

    According to Adeniyi, while the delay in ratifying AfCFTA may be considered a setback, it provides Nigeria with a crucial moment for strategic recalibration.

    This, he said involves meticulous planning and implementation of measures that align with AfCFTA objectives.

    “Nigeria should view this delay as an opportunity to strengthen its readiness, focusing on resolving challenges, streamlining regulatory processes, and enhancing the ease of doing business.

    “To kickstart this recalibration, it is recommended that Nigeria conducts a comprehensive review of existing policies, identifying areas that require adjustment to align with AfCFTA standards,” he said.

    Speaking on the importance of policy alignment, Adeniyi said the success of AfCFTA intricately depended on the alignment of Nigeria’s fiscal policies with its foreign policies.

    He said that a harmonised policy framework would create an environment conducive to trade, attracting investments and facilitating the seamless flow of goods and services.

    “To accomplish this, Nigeria should establish a continuous feedback mechanism between fiscal policymakers, foreign affairs representatives, and NCS,” he said.

    He, however, said the inadequacy in infrastructure posed a substantial threat to the seamless and timely movement of goods, potentially resulting in detrimental trade delays.

    “The focus should centre on the modernidation of entry points, the implementation of cutting-edge technology infrastructure, and the creation of an environment conducive to expeditious trade operations,” Adeniyi noted.

    Prof. Eghosa Osaghae, Director-General, NIIA, said the institute was set up to promote the understanding of international affairs, especially complexities that made those affairs not easily intelligible to the ordinary people.

    “Beginning today, the NIIA will have as part of its repertoire and its intellectual foundations, the Bashir Adeniyi Centre for International Trade and Investment.

    “Together with the NCS, the NIIA will now establish a senior executive force for senior officers of the NCS to ensure that they provide the leadership that Africa is waiting for to drive the AfCFTA,” he said.

    Chairperson of the lecture, Erelu Dosumu Abiola, said the AfCFTA was a game changer, noting that to position the NCS as a catalyst for economic development, a journey of reforms must be embarked on.

    She said this included embracing technology for streamline processes, investing in human capital and enhancing collaboration with other stakeholders, adding that challenges of corruption, inadequate infrastructure, and others cannot be overlooked.

    “Each hurdle demands strategic and immediate response by fostering a culture of integrity and unity, investing in infrastructure, supporting no mainstream sectors and collaborating with international partners.”

  • BREAKING: Reps summon CBN Gov for lifting FX ban placed on 43 items

    BREAKING: Reps summon CBN Gov for lifting FX ban placed on 43 items

    The Nigerian House of Representatives has summoned Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso to explain the decision to lift the restriction on forex supply on 43 imported items.

    TheNewsGuru.com (TNG) reports the House passed the resolution to summon the CBN Governor during plenary on Tuesday.

    This followed the adoption of a motion of urgent public importance sponsored by Sada Soli, a lawmaker representing Kaita/Jibia Federal Constituency of Katsina State.

    Some of the items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, poultry and processed poultry products, tinned fish in sauce (Geisha)/sardine, cold rolled steel sheets, galvanized steel sheets among others.

    Moving the motion, Soli recalled that the CBN imposed the restrictions in June 2015 to conserve the foreign exchange reserves and promote local production of certain goods, including about 11 food items.

    He recalled that  on Oct. 12, the apex bank announced, among other issues, the lift on FOREX restrictions hitherto placed on 43 items.

    According to him, some of the items have tariffs to protect local industries, as they are part of the imports prohibition list.

    Soli expressed concern that the decision of the bank will greatly affect local production of items such as rice, cement, and palm oil among others.

    The lawmaker said that it will force local manufacturers to hold the short end of the stick, leading to factory closure and ultimately eroding capacity to build the country’s local economy.

    “Almost all the 43 items are from two critical sectors which have been identified by all policy documents from NEEDS, SEEDS to Vision 2022 as being areas that are critical to economic diversification.

    “Worried that some of the listed items enjoy 60 to 70 per cent subsidy from their countries of origin, thus putting Nigeria’s local products at a comparative disadvantage and without any protection, and will lead to job losses and social exclusion;

    “Also worried that the benefit of the cheaper imported inputs as stated by the CBN will give undue advantage to middlemen to drive the economy, which is inimical to our economic growth and not suitable to the current unified FOREX market in the country.

    “Further worried that Nigeria will not be competitive in the African Continental Free Trade Area if our markets are flooded with imported finished goods.

    “The decision followed the rising food inflation in the country which has significantly impacted the economy and the purchasing power of consumers in the country,” he said.

    Soli said that lifting of the FOREX restriction on the importation of 43 items may not have meaningful impact on the rising food inflation as a result of soaring exchange rate.

    In his ruling, the Speaker of the House, Rep. Tajudeen Abbas pursuant to Section 8 (4) (a) (b) and Section 5 (b) of the CBN Act, 2007 said that the CBN governor should be invited.

    He mandated the Committees on Customs and Finance to interface with the governor to explain reasons for the decision.