TheNewsGuru

Tag: Forex

  • Forex: CBN introduces new rules to end scarcity

    Forex: CBN introduces new rules to end scarcity

    …as Naira exchanges for N372/$1 at parrallel market

    The Central Bank of Nigeria on Monday introduced new rules into the interbank foreign exchange market.

    This development is coming as the Naira to dollar rate climbed to 372 at the parallel market and 305.55 at the interbank market on Monday.

    The rules were contained in a new circular tagged, “Further liberalisation of the interbank foreign exchange market,’’ and signed by the Director, Financial Markets, Dr. Alvan Ikoku.

    Among other things, the regulator said authorised dealers in the interbank were meant to put only N1 spread on their transactions.

    The statement reads, “All authorised dealers shall be subject to a maximum spread of N1. Funds purchased by an authorised dealer from another dealer on the interbank market shall not be held in position overnight by the buying authorised dealer or sold to another authorised dealer.”

    “Such interbank purchases shall only be sold by the buying authorised dealer to its customers for permitted/eligible transactions as outlined in the above-referenced circular.

    It added, “Authorised dealers shall not exceed their respective foreign currency trading position without approval of the CBN. Compliance with the FCTPL shall strictly be monitored by the CBN.”

    “All interbank trades –spot, forwards, futures, option and swaps –that have an impact on an authorised dealer’s FCTPL are expected to comply with the rate reasonability standards.”

    In addition, the CBN stated that it reserved the right to intervene, as a buyer or seller, as it deemed it fit in the interbank market.

    It advised the dealers to encourage their corporate clients to on-board the FMDQ-advised forex trading system immediately, in order to avoid sanctions and to deepen the market.

  • CBN injects $190m into FOREX market, opens up market

    CBN injects $190m into FOREX market, opens up market

    Relentless to achieve convergence of rates between the interbank and Bureau de Change segments of the foreign exchange market (FOREX), the Central Bank of Nigeria (CBN) has injected another 190 million dollars into the market.

    The acting Director, Corporate Communications, CBN, Mr Isaac Okorafor, in a statement on Monday in Abuja, said 100 million dollars was offered as wholesale interventions and 50 million dollars was allocated to the Small and Medium Enterprises (SMEs) FOREX window.

    He said that 40 million dollars was also allocated to accommodate customers requiring FOREX for business, Personal Travel Allowances, tuition and medical fees.

    Okorafor said the Naira had made tremendous gain against the dollar in recent times.

    He said FOREX rates at both the inter-bank and BDC segments had almost converged, prompting even greater optimism that the value of the Naira would continue to spike.

    Okorafor observed that by ensuring transparency in the market as well as fairness to end-users, the CBN had further exposed speculators and checkmated them.

    He, therefore, urged all dealers, particularly licensed BDCs, to continue to play by the rule, adding that the CBN would not hesitate to wield the big stick against any erring bank or dealer.

    Okorafor said that the CBN had also released new guidelines to further develop the foreign exchange market and improve its structure.

    “The new circular, among other provisions, allows authorised dealers to sell their excess foreign currency to other authorised dealers without seeking prior approval from the CBN,” he said.

    Meanwhile the Naira continues to maintain its strong stand against major currencies around the globe, exchanging for N364 for one dollar in the BDC segment of the market on Monday.

     

  • Senate to invite CBN, DMBs over forex crisis, high interest rates

    …Says Presidency will sign 2017 Appropriation Bill soon

    Senate President, Dr. Bukola Saraki has said the Senate as part of its legislative function will intervene in the high interest rates on loans and forex crisis that has lingered for a while now by inviting the apex bank, Central Bank of Nigeria, CBN and Deposit Money Banks, DMBs, to technically proffer long lasting solutions.

    He stated that in an economy where workers were being retrenched and people were losing investments, it was immoral for certain sectors to be making astronomical profits.

    Saraki stated this in an interactive session with newsmen in Ilorin, Kwara State on Sunday. In his words: “They (banks) will tell you that they are doing business but in doing business, there must be social responsibility. We must be able to sit down and look at ourselves eyeball to eyeball, and we intend to do that; and I can promise Nigerians that we can find a solution. Hopefully with the stability in the forex market, we will now begin to address the high interest rate.

    “There is no business that can make money if it is trying to borrow at 28 or 29 per cent. It cannot work and if we cannot get the banks to lend to the real sector and they carry on their money to government instruments, there cannot be growth. So, we must tackle that. I can assure you that I will lead that challenge. We must sit down and discuss it.”

    Saraki added, “They are in business to make money but we must look at what money is reasonable in this kind of environment. You may have to reduce that profitability to allow your country to grow. It is that balancing that we need, but in doing that, there must be some incentives. We may have to tell them, ‘Listen, we may have to limit how much you put in government security’.

    “What do you do with that extra amount of money? It must go to the real sector. It must go to the business that produce made-in-Nigeria products. They may say that it is too risky to do that. In doing that, we must give them some assistance. This is the kind of negotiation we must make.”

    He said the Senate would discuss with the Central Bank of Nigeria and the banks on how to address the high interest rate regime.

    The Senate President urged Nigerians to patronise homemade products, adding that people should report any Ministry, Department and Agency that flouted the Senate’s directive that indigenous companies producing such commodities should be given the option of first refusal during public procurement.

    On the delay in the signing of the 2017 budget into law, Saraki told Nigerians not to be apprehensive about whether the Presidency would assent to the budget or not.

    He said, “There was a comment I read online where the Presidency had said it did not have an intention not to sign. I do not think that (not signing the budget) will happen; I doubt very much.

    “Nigerians should not be concerned about that; I am pretty sure that the Executive will sign the bill and we will begin to implement the budget. I am confident that the Executive will sign it very soon. There should be no anxiety there.”

  • Forex: CBN pumps fresh $482.6m into market

    Forex: CBN pumps fresh $482.6m into market

    The Central Bank of Nigeria (CBN) on Tuesday intervened in the inter-bank market to the tune of 482.6 million dollars in the first trading day after the Democracy Day celebrations.

    A statement issued by its Acting Director, Corporate Communications, Mr Isaac Okorafor in Abuja said that this was part of measures to underline its determination to guard the international value of the naira.

    Okorafor said that a breakdown of the intervention indicates that the retail Secondary Market Intervention Sales (SMIS) was allocated 285.7 million dollars, while the 100 million dollar was offered in the Wholesale SMIS auction window.

    The Small and Medium Enterprises (SMEs) window got an allocation of 52 million dollars, while the invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance (PTA), medicals and tuition fees, among others was allocated 45 million dollars.

    Okorafor said that the interventions were in line with the Bank’s resolve, echoed by the Governor, Godwin Emefiele at last Tuesday’s briefing of the Monetary Policy Committee (MPC) meeting.

    While expressing pleasure that the intervention of the bank had ensured stability across all segments of the Foreign Exchange market, Okorafor expressed optimism that the bank’s objective of exchange rate convergence would be achieved soon.

    Okorafor reiterated his call to all stakeholders to play their respective roles in ensuring a smooth running of the Foreign Exchange market for the overall benefit of the economy.

    According to him, surveys in Abuja, Lagos, Kano and Port-Harcourt on Tuesday indicated that the dollar traded to the Naira at an average rate of N375 to one dollar.

     

     

     

    NAN

     

  • Forex: CBN releases list of 36 qualified items

    Forex: CBN releases list of 36 qualified items

    The Central Bank of Nigeria (CBN) on Wednesday published a list of items, for which importers can source foreign exchange (Forex) from the market.

    TheNewsGuru.com reports that the CBN sent the list which has 36 categories, to all authorised dealers, Nigeria Customs and the public. It was endorsed by Director, Trade and Exchange, W.D Gotring.

    Gorting explained that the list became necessary, following misconceptions and enquiries across market on items that are “Valid for Foreign Exchange”.

    The items include animal or vegetable fats and oils fractions, hydrogenated- not including palm oil/ olein and margarine; prepared glues and adhesive based polymers of headings 39.01 to 39.13 or on rubber; other plates, sheets, film, foil, and strip of polymers of ethylene printed – only for pharmaceutical and manufacturing.

    Others are bobbins, spools, cops and similar supports of paper or paperboard used for winding textile yarn; uncoated kraft paper and board, in rolls, uncoated kraft paper and board, in rolls, paper coated with kaolin (China clay), synthetic filament, artificial filament, woven fabrics of synthetic filament yarn, including woven fabrics obtained from material polypropylene fabrics, of the type used as carpet backing.

    The list also includes glass in balls, rods or tubes, unworked, float glass, coloured throughout the mass opacified, flashed or merely surface ground only for pharmaceutical manufacturing, non-domestic heating/cooling equipment, non-electric water heaters among others.

    TheNewsGuru.com reports that the CBN had earlier denied reversing a ban on importers of 41 items, from accessing foreign exchange through the forex window.

  • Forex: CBN injects fresh $81.2m for BTA, PTA, others

    Forex: CBN injects fresh $81.2m for BTA, PTA, others

    The Central Bank of Nigeria, CBN, on Monday in its series of intervention to boost the Naira and made the dollar available to all sectors of the economy injected the sum of $81.2 million in the invisible and Small and Medium Enterprises (SMEs) segments.

    According to the apex bank, the fresh intervention will cover for invisibles such as Basic Travel Allowances (BTA), Personal Travel Allowances (PTA), medical bills and tuition fees, among others.

    A breakdown of the interventions indicates that the Bank provided the sum of $44 million to meet customers’ requests for invisibles. The Acting Director, Corporate Communications at the,CBN, Isaac Okorafor, confirmed the intervention, adding that the SMEs segment also received a boost of $37.2 million.

    According to him, “the Bank remains committed to ensuring that there is enough supply of forex to genuine customers to achieve the goal of forex rates convergence.”

    While expressing satisfaction with the current stability in the forex market, Okorafor reiterated his confidence in the ability of the CBN to sustain its interventions in the market.

    It will be recalled that the CBN on Friday, May 5, 2017, sold a total sum of $389 million to authorized dealers in the retail sector of the market as spot and forwards. Of the sum, $87.885 was for spot sales, while $300.8 million was sold as forwards in three tenors of 30, 45 and 60 days, respectively.

  • Forex crisis: CBN set to inject additional dollars this week

    Forex crisis: CBN set to inject additional dollars this week

    The Central Bank of Nigeria (CBN) is set to inject more dollars through intervention segments of the market, thereby heightening expectations that the Naira will appreciate significantly during the week.

    The spokesman of the apex Bank, Isaac Okorafor, while exchanging views with news men over the weekend, confirmed the anticipated interventions in most segments of the market during the week, with effect from today, Monday 8th,2017.

    According to him, the Bureau De Change (BDC) and the Small and Medium Scale Enterprises (SMEs) along with other major segments will also receive the adequate intervention with a view to providing liquidity in the entire foreign exchange market.

    Meanwhile, manufacturers have praised the CBN over the foreign exchange management strategy adopted recently.

    The Director General of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadiri, was recently quoted as saying the, “the recent pronouncement of the CBN comes as a relief. If the intervention is sustained, there’s no doubt that we will have continued improvement in sourcing raw materials.”

    TheNewsGuru.com reports that the apex bank has constantly release tranches of the United States dollars in all segments of the market in order to boost the Naira which has been on the decline for a while now.

  • JUST IN: Forex: CBN lifts ban on 41 items

    JUST IN: Forex: CBN lifts ban on 41 items

    The Central Bank of Nigeria (CBN) has lifted the restriction on 41 items listed as ineligible for foreign exchange, with a condition.

    “Importers of items classified as not valid for forex with transactions value of $20,000 and below per quarter shall now qualify for allocation of foreign exchange,” the bank said in a circular.

    TheNewsGuru.com reports that the Central Bank of Nigeria (CBN) in July 2015, restricted 41 items, including vegetable oil, poultry products, toothpicks, cosmetics, plastic and rubber products, among others, from accessing foreign exchange from the interbank foreign exchange market.

    Details later…

     

  • Forex crisis: World Bank blames CBN’s fixed exchange regime

    Forex crisis: World Bank blames CBN’s fixed exchange regime

    The World Bank has blamed Nigeria’s continued foreign exchange instability on the fixed exchange regime in the official forex market.

    In a publication on African economies titled: ‘Africa’s Pulse,’ the World Bank singled out Nigeria and Angola as two countries that had yet to experience stability in the forex market despite rebound in the prices of commodities being exported.

    The report stated, “The rebound in commodity prices and improved growth prospects in some countries have helped stabilise commodity exporters’ currencies.

    “However, with the Nigerian naira and Angolan kwanza remaining fixed against the US dollar, the imbalance in the foreign exchange market remains substantial in both countries.”

    The report also mentioned Nigeria as one of the countries in the region where there were substantial risks in the banking sector due to a number of factors, including non-performing loans and policy uncertainties.

    The World Bank said, “Banking sector vulnerabilities remain elevated in the region, including in Angola, CEMAC countries, the Democratic Republic of Congo and Nigeria. Foreign exchange restrictions, policy uncertainty and weak growth have affected the soundness of the banking sector.

    “Non-performing loans have increased, and profitability and capital buffers have decreased. Several proactive measures have been introduced to contain risks to financial stability, including through increased provisioning and by intensifying monitoring and supervision of banks.”

    On inflation, the report stated that although inflation remained very high in the region, it had started to ease but singled out Nigeria and Angola as two countries where inflation was rising as a result of depreciation of currencies in the parallel exchange market.

    The report added, “Inflation in the region is gradually decelerating from its high level in 2016 but remains elevated. Although a process of disinflation has started in Angola and Nigeria, inflation in both countries remains high, driven by a highly depreciated parallel market rate.

    “Inflation eased in metals exporters, because of greater currency stability and lower food prices due to improved weather conditions.”

    The National Bureau of Statistics, however, reported that inflation in the country had continued to increase until it reached a peak in January.

    According to the NBS, the inflation rate reduced from 18.72 per cent in January to 17.78 per cent in February. By March, it further went down to 17.26 per cent. The inflationary figure for April has yet to be released by the bureau.

  • Forex: CBN injects fresh $100m as Naira suffers decline

    The Central Bank of Nigeria (CBN) on Thursday said it had offered 100 million dollars to authorised dealers as its intervention to stabilise the foreign exchange market.

    Isaac Okorafor, Acting Director of the Corporate Communications Department of the apex bank disclosed this in a statement on Thursday.

    Okorafor, however, said that no intervention was made in the retail window in Thursday’s auction.

    He said that the bank continued its weekly sale of foreign exchange to the Bureau de Change (BDC) segment to meet the needs of low-end users.

    The CBN spokesman further said that the bank had observed that quite a good number of dealers were adhering to the forex guidelines.

    Okorafor said the CBN would continue to monitor activities of authorised dealers to ensure that no outfit or individual circumvented laid down forex rules.

    He urged all concerned to put the Nigerian economy first, adding that the CBN was determined to guarantee the international value of the naira.

    Meanwhile, the Naira on Thursday depreciated slightly against the dollar at the parallel market.

    The Nigerian currency lost two points to close at N390 to the dollar, while the Pound Sterling and the Euro traded at N495 and N415, respectively.