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Tag: Forex

  • CBN resumes forex sales to licensed BDC operators

    CBN resumes forex sales to licensed BDC operators

    The Central Bank of Nigeria (CBN) says it has commenced the sales of foreign exchange to the Bureau De Change (BDC) operators in the country.

    The CBN made this known in a circular signed by Dr Ozoemena Nnaji, Director Trade and Exchange Department, and addressed to authorised dealers and BDC operators on Thursday.

    The bank said the step was part of efforts to enhance accessibility to foreign exchange, particularly to travellers following the announcement of the limited resumption of international flights by Minister of Aviation.

    “The CBN hereby wishes to inform the general public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from Sept. 7.

    “Consequently, purchase of foreign exchange by BDCs shall be on Mondays and Wednesdays in the first instance. The BDCs are to ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays accordingly.

    “Meanwhile, authorised dealers of Deposit Money Banks shall continue to sell foreign currency for travel related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents, passport, air ticket and visa.

    “All authorised dealers and BDC operators are hereby advised to ensure strict compliance with the provision of the extant regulation on the disbursement of foreign exchange cash to travellers as any case of infraction will be appropriately sanctioned,” it stated.

  • How to Day Trade Pre-Market Futures

    How to Day Trade Pre-Market Futures

    Activity on the stock market does not cease once the closing bell is rung. Before and after the normal period, assets still change hands. In the morning, pre-market exchange transitions into the official hours. Experienced players buy and sell futures that have impressive profit potential.

    It is not mandatory to start trading in these preceding hours. However, there are opportunities many players don’t want to miss. If you are used to day trading, consider starting earlier. Here is an overview of the benefits and drawbacks of this arrangement.

     

    When Trading Never Stops

    For futures, exchange occurs around the clock. Naturally, the largest volumes are traded within regular hours. When exchanges in New York and London are open, major institutions execute a lion’s share of their trades.

    Volume and movement accumulate close to the opening time. This is 9:30 EST (Eastern Standard Time). For example, take E-mini S&P 500. Its volume starts rising before the official hours — around 8:30 on average. In an hour, both volatility and volume will have already started growing. Usually, the trend continues for a subsequent couple of hours. This explains two benefits of starting early:

    • Pre-market positions allow you to foresee changes in the open marketplace.
    • Fewer competitors are there to snatch trades.

    However, users of online forex brokerage should also be aware of the downside.

    Is There a Catch?

    The approach has its own flipside — modest volumes. You may identify a promising opportunity but be unable to use it. This is because the volume could be insufficient. In general, however, at least a couple of opportunities may be spotted from 8:30 to 9:30 am. Therefore, if you are a day trader who is active in the opening hours, adopting pre-market makes sense.

    What to Look Out For

    Make it a morning habit to check the economic calendar. Do this every single day, as tonnes of valuable data are released in the early hours. Time your positions under big news releases. Here is how this should be done.

    Exit all of your positions at least a minute before. Avoid opening new ones within the 5 minutes before the release. Once dramatic information is made public, markets react. As a result, price gaps emerge, and risk management becomes paramount.

    Another peculiarity is the scope of effect. As volumes are relatively modest, influence is much stronger in comparison with regular hours. Watch for a valid trade setup before commencing any activity.

    What Trading Methods to Use

    There is no need to modify your regular trading behaviour. The same techniques that work for you during normal hours could be just as effective. However, it is important to understand a few caveats.

    First, do not rely on pre-market as a predictor of subsequent activity. In fact, your impression may be deceiving. Here is how it may impair your judgement.

    If futures you focus on will fall in the pre-market, you may feel pessimistic. However, there is no guarantee that reversal will not be observed right after the opening. A fresh stimulus may send the prices up. Similarly, stocks that rise in the pre-market may cease or continue growing afterwards.

     

    Holding Positions Through the Open

    There are conflicting opinions on whether positions should be held through the open. Some experts will instruct you to finalize any pre-hours trades. Others will call this nonsensical. Here are the two most common methods.

    First, you could hold your trades through and hedge risks. This involves placing a stop loss and a target. Avoid taking action until either of these is activated. The indicators are as likely to be hit as in any other situation. A very close stop loss may not be favourable. In case of a dramatic surge, it will be quickly triggered.

    The second approach is timed even more rigorously. All trades open before 9:30 am must be exited at 9:29. The one-minute time gap is enough to minimize risk. The same logic is followed by traders closing positions before data releases.

    What Should You Choose?

    There is no universal recipe. Try out both methods and see which one suits you. Keep track of the profits reaped in the early hours. Compare positions closed before the opening and held through it.

    A thoughtful approach takes time and patience. However, the importance of data collection may not be overlooked. Therefore, keep at it for several months. This will ensure your conclusion is solid.

     

     

  • CBN injects $210m into Forex Market

    CBN injects $210m into Forex Market

    The Central Bank of Nigeria (CBN) has injected the sum of 210 million dollars into the inter-bank Foreign Exchange Market to boost liquidity in the sector.

    The bank’s Director, Corporate Communications Department, Mr. Isaac Okorafor made this known in a statement in Abuja on Tuesday.

    Okorafor explained that authorised dealers in the wholesale segment of the market received the sum of 100 million dollars, while the Small and Medium Enterprises segment received the sum of 55 million dollars.

    He said customers who were seeking foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance, among others, were allocated a total of 55 million dollars.

    The director stated that the CBN’s commitment to sustaining liquidity and ensuring stability in the market remained paramount on the minds of the management of the bank.

    According to him, the continued intervention by the bank underscored the resolve of the Governor, Godwin Emefiele, to guarantee access to all those who genuinely required foreign exchange from the forex market.

    News Agency of Nigeria (NAN) recalls that the bank was on Friday, injected the sum of 218.41 million dollars and CNY18 million into the Retail Secondary Market Intervention Sales segment.

    Meanwhile, the Naira on Tuesday, remained stable, as N358 was exchanged for a dollar in the Bureau de Change segment of the market.

  • CBN summons currency dealers, others on development in forex market

    The Central Bank of Nigeria (CBN) has summoned all authorised currency dealers for a meeting to discuss development in the foreign exchange market.

    The invitation was contained in a circular released and signed by the bank’s Director, Trade and Exchange, Mr Ahmed Umar in Abuja on Friday.

    It explained that the meeting would engage the participants on development so far in foreign exchange market with a view to proffer solutions or to chart a way forward.

    According to the circular, the meeting will be held at Sheraton Hotel, Ikeja, Lagos on Thursday, July 4.

    The News Agency of Nigeria (NAN) reports that apart from authorised currency dealers, the representatives of Nigeria Customs Service were also expected at the meeting.

    Other participants are representatives of Standard Organisation of Nigeria (SON) and those of National Agency for Food and Drug Administration and Control (NAFDAC).

  • Refinery: FG Will Source Forex from Dangote – CBN Gov

    The Federal Government will soon start sourcing foreign exchange (forex) from Dangote Group, as soon as the latter’s refinery, petrochemicals and fertilizer projects come on stream.

    This potential reversal of roles was disclosed by the Central Bank Governor, Mr. Godwin Emefiele, after he spent over four hours touring the ongoing Dangote Refinery, Petrochemicals, Fertilizer projects and Dangote deep-water jetty at the weekend.

    Emefiele toured the project sites in the company of the President/CE of the Dangote Group, Aliko Dangote; Deputy Governor of the CBN, Aishah Ahmad; Group Managing Director, Dangote Industries Limited, Mr. Olakunle Alake; Group Executive Director of Dangote Industries, Mr. Devakumar Edwin; and the Managing Director of Guaranty Trust Bank, Mr. Segun Agbaje.

    The CBN governor premised his comment on the huge forex earnings that are expected to accrue from the export of the petrochemical and fertilizer products from the Dangote refinery and fertilizer plants by the time the fertilizer plant begins operations in May this year, and the refinery takes off as planned in 2020.

    Mr. Emefiele, who commended Aliko Dangote for the volume of work done on the Dangote projects since his last visit over two years ago, also enthused that the refinery and fertilizer projects would help Nigeria to create thousands of Jobs and check importation of fuel by the federal government; thereby saving government huge amounts of forex currently being spent on fuel import.

    He added that about 55 to 60 per cent of Nigeria’s spending on foreign exchange for the importation of petroleum products and food items would be saved when the Dangote Refinery come on stream. Emefiele said one third of Nigeria’s spending on forex will also be retained when the Dangote Refinery is completed.

    Emefiele described the Dangote Refinery as transformational project for Nigeria, which totally keys into the objectives of President Muhammadu Buhari on self-sufficiency in petroleum products, conservation of forex and diversification of the economy. “I am sure by that time, the CBN will be begging Dangote to sell its dollars to the bank,” he said.

    He noted that the completion of the refinery would make Nigeria self-sufficient in the production of refined products and also make the country to be among the league of exporters of petroleum products.

    Emefiele declared the CBN’s support to any company or individuals who are ready to invest in the transformation of the Nigeria economy. “We are ready to support in Naira and also ready to provide foreign exchange for any investor who is ready to support Nigeria’s transformational agenda.

    “I use this opportunity to repeat that we are ready to support any individual like Aliko Dangote who is willing to invest in this country. We will continue to support companies that display the determination to support the CBN. I feel so delighted and I am happy this is happening in my own life-time and I am sure you are all so happy.”

    Speaking also, President, Dangote Group, Aliko Dangote, said the project would definitely transform the Nigerian economy. “We have a couple of projects at hand and we will continue with these transformative projects. The biggest problem we have in Nigeria is that we currently import more than we produce like any other African countries. But, by the time we finish our fertilizer plant, Nigeria will be the largest exporter of fertilizer in Africa. We will also be the largest exporter of petrochemicals and the largest exporter of petroleum products in the whole of Africa. This is a major transformation.”

    He said the 3billion Standard Cubic Feet gas pipeline and other Dangote Projects are geared towards Nigeria’s economic transformation.

    Dangote commended CBN for its moral support to the refinery project. “There are lots going on in Nigeria. We want the CBN to support us like what it did in cement sector, which made Nigeria not only self-sufficient in the production of cement, but it became an exporter of the product. Today, Nigeria will not even import cement because we no longer have capacity for importation of cement,” he added.

    In a presentation made to the CBN governor, Group Executive Director at Dangote Industries Limited, Devakumar Edwin, disclosed that the company’s target is for a significant portion of Nigeria’s crude oil production to be refined domestically, rather than imported, thereby creating jobs within Nigeria, and bringing a halt to the current importation of refined petroleum product.

    Edwin said the refinery is going to provide over 100,000 indirect employment through retail outlets. He said the refinery is designed to meet Euro V grade, which is the highest standard in the world, hence products can be exported to any part of the world.

    “It will be well diversified and able to process Nigerian crude, African crude and crude from other parts of the world. In terms of evacuation routes, two crude oil single point mooring (SPM) buoys and three multi-product SPMs will be located within the Atlantic Ocean to transfer crude oil to a calling tanker.

    “The 2-Line Dangote Fertilizer Complex, consisting of Ammonia and Urea plants, is conceived to be one of the world’s largest fertilizer plants with a total capacity of 3 Million Tonnes per Annum of Urea fertilizer. Therefore, the Dangote Fertilizer is positioned to bridge the gap between local demand and national capacity. Dangote Fertilizer Plants will produce Urea that will assist farmers boost their crop yields through easy access to fertilizer,” he added.

  • Forex: CBN adds fertilizer to banned items, vows to clamp down on violators

    The Central Bank of Nigeria (CBN) has announced plans to sanction some corporate and entities said to be engaging in the dumping of the 41 items restricted from being imported into the country with foreign exchange sourced from the Nigerian Foreign Exchange Market.

    Recall that the CBN as part of its developmental objective of employment generation and inclusive growth in Nigeria on July 1, 2015 restricted the availability of forex to the importation of 41 items which could be competitively produced within the economy.

    However, the CBN in a circular signed by Kevin Amugo, Director, Financial Policy and Regulation Department on Monday said the the apex bank had discovered that there were circumvention of the policy as the restricted items were being dumped in the country.

    It said the implications were that the growth and employment benefits arising from the policy may be eroded if not checked.

    “The CBN views this development with trepidation. The Economic Intelligence Unit of the bank in collaboration with the EFCC would commence immediate investigation of the accounts of the corporate and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits,” the circular said.

    “Such sanctions would among others include blacklisting the corporates and their directors; closure of their bank accounts; and restricting them from maintaining any bank accounts in any bank under the CBN remit. Banks that provided their platforms for such economic abuses would also be appropriately sanctioned.”

    Meanwhile, in another circular, the CBN confirmed the inclusion of fertilizer on the list of ban items effective Dec 7, 2018.

    The circular signed by Ahmed Umar, Director, Trade and Exchange Department said, CBN will ensure that transaction (Form M) on fertilizer for which payment are outstanding are settled at the appropriate settlement dates

    CBN said the policy had resulted in massive investments and the establishment of cottage industries that now engage in the production of the items across the country.

    “The growth and employment benefits have been phenomenal,” the bank said.

    THE 42 ITEMS RESTRICTED FROM IMPORTATION WITH FOREX

    Rice

    Cement

    Margarine

    Palm kernel/Palm oil products/vegetables oils

    Meat and processed meat products

    Vegetables and processed vegetable products

    Poultry chicken, eggs, turkey

    Private airplanes/jets

    Indian incense

    Tinned fish in sauce(Geisha)/sardines

    Cold rolled steel sheets

    Galvanized steel sheets

    Roofing sheets

    Wheelbarrows

    Head pans

    Metal boxes and containers

    Enamelware

    Steel drums

    Steel pipes

    Wire rods(deformed and not deformed)

    Iron rods and reinforcing bard

    Wire mesh

    Steel nails

    Security and razor wine

    Wood particle boards and panels

    Wood Fibre Boards and Panels

    Plywood boards and panels

    Wooden doors

    Toothpicks

    Glass and Glassware

    Kitchen utensils

    Tableware

    Tiles-vitrified and ceramic

    Textiles

    Woven fabrics

    Clothes

    Plastic and rubber products, polypropylene granules , cellophane wrappers

    Soap and cosmetics

    Tomatoes/tomato pastes

    Eurobond/foreign currency bond/ share purchases

    Fertilizer

     

  • Communications ministry, CBN move to include ICT, Telecom on Forex list

    The Minister of Communications, Mr Adebayo Shittu, says the ministry is collaborating with the Central Bank of Nigeria (CBN) to include the ICT and Telecom industry on Forex priority list.

    Shittu, represented by Mr John Emeawa, Director, Planning, Research and Statistics (PRS), Ministry of Communications, disclosed this on Wednesday in Abuja while inaugurating the ICT, Computers/Devices Service Centre.

    The centre was established by the Ministry of Communications and Certified Computers Manufacturing of Nigeria (CCMON).

    According to the minister, there is an ongoing discussion between the ministry and the CBN to include the ICT and Telecom industry in the list of sectors to be accorded Forex priority.

    “In this regard, I will proudly say that Nigeria has an array of young people with great energies and creative abilities to launch Nigeria into the league of world leading economies by leveraging on ICTs.

    Shittu stressed the need for the nation to adopt a deliberate, planned and sustainable national programme for developing a competent, knowledge-driven workforce and society.

    He said sustained access to ICT tools was a critical component of competent and knowledge-driven workforce.

    The minister said in ensuring a competent workforce that the Certified Computer Manufacturers of Nigeria (CCMON) seeks to collaborate with the ministry and its agencies to establish the centre.

    According to him, the ministry fully identifies with CCMON since its activities align with the mandate of the ministry because we know that their value propositions will be beneficial to the sector.

    “Our collaboration with CCMON is intended to transform and build the capacity of the workforce in digital literacy and in preparation for a full implementation of the National e-Government Master plan.

    “ICT Roadmap and also equip benefitting tech savvy youths with entrepreneurial and job creation skills.

    “I am happy to inform you that the Computer Service Center aligns with the implementation of the Federal Government Local Content Initiative,“ he said.

    Shittu said the centre will support all systems bought in the public service, saying it was a pilot project of the ministry with plans to be replicated in every MDAs to provide after sales and services support.

    “Such after sales support will ensure that computers bought by government are duly maintained.

    “This will stop all incidents of breakdowns and malfunctioning of computers used for government business.

    Consequently, the centre is for skills acquisition of staff that will provide services to various MDAs.

    “The programme, therefore, will save costs for government and eliminate huge maintenance costs in government IT infrastructure.

    “ I wish to state that our ministry will continue to support CCMON as well as other equipment manufacturers to provide policy direction, who may wish to set up an assembly plant in Nigeria in the future,‘’ he said.

    In her opening remarks, Mrs Nkechi Ejele, Permanent Secretary, Ministry of Communications, said the centre would serve as a model for promoting in-house maintenance of ICT devices.

    Ejele said the centre would also carry out preventive maintenance, encourage purchase of locally manufactured ICT devices.

    “Increase the life span of systems and serve as a training centre for devices repair and maintenance thereby lowering the total cost of ownership.

    “As a ministry, we have consistently stated the ICT sector of the Nigerian economy has the capacity to serve as one of the leading sources of government revenue, if the enabling environment is created through partnership and investment.”

    On his part, Mr Bode Pedro, President, CCMON, said the centre will create trade opportunity for the unemployed youths, the MDAs and private sector.

    Pedro said the coming together of local manufacturers to set up a unified service centre will reduce cost and provide efficient services.

     

  • Forex: CBN revised manual takes effect

    The recently review manual for the foreign exchange (forex) market in the country took effect on Wednesday, August 1, 2018.

    This was confirmed by a circular signed by the acting Director in charge of Trade and Exchange Department of the Central Bank of Nigeria, Mrs F O Okonji.

    Recall that as part of a deliberate programme for the liberalization of the Foreign Exchange Market, the central bank in 2006 undertook a review of the Foreign Exchange Manual to incorporate policy changes that had taken place since its introduction in 1995 pursuant to the powers vested on the CBN via the provisions of Act 17 section 1 (2) of 1995, LFN Cap F34.

    However, contemporary developments have since made the existing provisions of the manual inadequate, resulting in the need to update the document.

    In the circular, the apex bank explained that “changes introduced in this revised Foreign Exchange Manual are intended to streamline documentation requirements, enhance transparency of transactions and engender compliance by stakeholders.”

    “In view of the above, the provisions of the revised Foreign Exchange Manual shall take effect from August 1, 2018,” Mrs Okonji stated.

  • NCC tasks telecom operators on efficient usage of FOREX allocation

    The Nigerian Communications Commission (NCC), has called on telecom operators to ensure efficient usage of FOREX allocation to prevent capital flight.

    NCC made the call at a meeting with operators on “Framework for Confirmation of Reasonableness of Service Requests’’ in Abuja on Tuesday, while deliberating on ways to overcome the challenges of FOREX allocation in the sector.

    Prof. Danbatta Umar, the Executive Vice Chairman of NCC said that as telecom services increased, it was imperative to expand coverage and optimise network capabilities through network elements which often engaged overseas vendors.

    Danbatta was represented at the forum by Mr Bashir Idris, Head, Competition and Tarrifs Unit of the Policy Competition and Economic Analysis Department of NCC.

    He said that these services were priced by the overseas vendors in foreign currencies and Nigerian telecom operators were required to pay for such services in foreign currencies thereby creating significant demand for foreign exchange.

    “The CBN, in ensuring monetary and price stability and maintaining external reserves to safeguard the international value of the Nigerian currency, sought our assistance to address demand for foreign exchange by telecom industry.

    “By virtue of this collaboration, the NCC provides expert advice and vets invoices and international payments to overseas vendors by telecom companies in Nigeria in order to ensure efficient usage of the FOREX allocation.

    “This is for prevention of capital flight and round tripping amongst other things.

    “This ultimately led to the development of appropriate rules and procedures for the processing of confirmation of reasonableness of service request/application submitted by CBN to the commission on behalf of Nigerian telecom,’’ he said.

    Danbatta said that NCC in performing its role had observed instances of over-quoted invoices, double submissions, untenured contracts and demand notices not backed by required valid contract agreements.

    He recalled that similar Confirmation of Reasonableness of Service (CRS) were held in 2003, 2009, and 2013 where subsisting procedures were developed and updated to guide the payments of invisible trade transactions.

    Danbatta therefore called on all participants to contribute actively and constructively at the forum to help to enrich the CRS application process.

    Mr Bashir Idris, the Head, Competition and Tariffs Unit of NCC, said the forum was to present a revised guideline for processing reasonableness of service requests.

    “There are tangible and intangible assets being put together by operators, NCC is in charge of assessing the reasonableness of the pricing of the intangible assets like software.

    “It is collaboration between the NCC and CBN to prevent the capital flight and all manner of infringement on our foreign exchange reserves.

    “To make sure that whatever the operators are paying out to their vendors outside the country are actually what they should be paying out so that the country is not short changed.

    “Over time since 2003 when we started this exercise, new challenge came up and we reviewed the guidelines to address those challenges so as not to put any of the parties in a difficult situation in their operations,’’ he said.

    Idris said the forum was to help all stakeholders in the telecom industry on the way forward and tackle new challenges that had been noticed in the last couple of years.

    He said this would ultimately benefit the telecom consumers because it would bring about realistic pricing based on realistic costing.

     

  • Forex: Emefiele pays unscheduled visits to First Bank, UBA, Zenith, insists on $1/N360 benchmark

    Mr Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), on Monday paid an unannounced visit to First Bank, UBA and Zenith banks offices in Abuja to inspect sales of foreign currencies to customers.

    He said that the visit was to ascertain banks compliance with the new directive by the CBN to sell foreign currencies to all customers over-the-counter whether the customer had an account or not.

    “The essence of us being here is to make sure that the banks are able to service not just their customers, but also those who are not their customers, particularly those who want to travel outside the country.

    “I want to seize this opportunity to let everybody know that there is dollar availability. If you want to travel, go to a bank. It doesn’t have to be your bank.

    “Whether you have an account or not, you should be attended to.

    “Just work into any bank with your travel document, show your Visa and air ticket. They will ask for your BVN and once they verify it, they should attend to you on the spot.

    “Nobody should go home and come back because he or she wants to buy foreign exchange. You should be attended to immediately and that’s what over-the-counter means,’’ he said.

    Emefiele said that all the banks were well stocked and whoever want to make foreign exchange transaction should look for the “BTA/PTA counter’’ or “Bureau de Change counter’’ located in all banks’ branches.

    He also said that all banks were expected to display daily foreign exchange rates for major currencies, so that the customer would be aware of how much he or she is paying.

    “The essence of this inspection is to say that there is ample liquidity for any eligible traveler and nobody should fall into the temptation of buying BTA or PTA from a bank at more than N360 to a dollar.

    “The banks are entitled to their margin, and their margin has already been built into the price so you don’t have to pay any additional charge,’’ he said.

    According to Emefiele, the CBN Examiners will continue to do on-the-spot assessments at banks to find out and be sure that people who are traveling get attended to Over-the-Counter.

    Emefiele visited the First Bank branch in Central Area, UBA branch in Area 3 and Zenith Bank in Maitama, Abuja.

    He asked customers of the three banks their experiences in accessing foreign exchange, if they were being attended to promptly or not.

    He also spoke with the Head Branch Service, First Bank, Abuja, Ms Zainab Darlington, Zenith Bank’s Executive Director, North, Mr Umar Ahmed and the Assistant General Manager, UBA, Mrs Jennifer Illoabache.

    They all confirmed ample supply of foreign exchange from the CBN to meet all eligible demand for foreign exchange.

    According to the Apex bank, Nigerians traveling out of the country for personal reasons, are entitled to access a maximum of 4,000 dollars every quarter, while those going for business, 5,000 dollars.

    Meanwhile, the Naira on Monday exchanged for N366 to a dollar at the Bureau de Change segment, showing slight improvement from the N367 it closed on Friday.