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  • CBN begins enforcement of dollar sales to BDCs

    CBN begins enforcement of dollar sales to BDCs

    To increase the volume of dollar in the market and stabilise the naira, the Central Bank of Nigeria (CBN) may compel banks to sell foreign currency proceeds of international money transfers to Bureaux De Change (BDCs).

    The CBN is likely to begin the enforcement of its directive to that effect soon, it was learnt yesterday.

    In a July 22 circular to the banks, titled:  “Sales of foreign currency proceeds of international money transfers to BDCs”, signed by its Acting Director, Trade & Exchange, W.D Gotring, CBN said the policy shift was intended to ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange (forex) market.

    Banks are yet to comply with the directive nearly two weeks after the circular was issued.

    The naira closed on Friday at N375 to the dollar in the parallel market, and exchanged at N330 to dollar in the official market. The local currency has lost over 35 per cent of its value against the dollar since January.

    Last January, CBN stopped all forms of forex sales to BDCs, accusing them of round tripping and frustrating the policies meant to stabilise the naira. But despite the stoppage of dollar sales to BDCs, the naira has continued to depreciate.

    An industry source told The Nation that the CBN is already talking with the banks and international money transfer agents like Western Union and MoneyGram to see that at least 50 per cent of the $21 billion Diaspora remittances targeted in the policy is channelled through the BDCs.

    Although the banks and money transfer agents are averse to implementing the policy, the CBN is pushing to see that BDCs are integrated into the dollar flow mechanisms that would boost liquidity and expand the forex playing field.

    “Both the banks and money transfer companies are worried over the CBN moves because selling dollar to BDCs means that the volume of dollar they transact with will be drastically reduced,” the source said.

    The volume of funds coming from the Diaspora remittances is expected to hit $35 billion yearly, following the tactical devaluation of the naira, which remains an incentive for more dollar inflows to the economy.

    Gotring directed all authorised dealers, who are agents to approved International Money Transfer Operators to sell foreign currency accruing from inward money remittances to licensed BDCs  with immediate effect.

    He explained that all International Money Transfer Operations were required to remit foreign currency to the agent banks for disbursement in naira to the beneficiaries, while the foreign currency proceeds shall be sold to the BDCs.

    “The foreign currency proceeds of International Money Transfer sold to BDC operators shall be retailed to end-users in compliance with the provisions of the Anti-Money Laundering Laws and observe the appropriate Know Your Customer  principles, including use of Bank Verification Numbers (BVNs)”.

    Gotring urged authorised dealers and BDCs to render returns on their operations daily and monthly to the CBN through the Electronic Financial Audit Sub-System (e-FASS) application in accordance with extant regulation, failing which there would be sanctioned, including withdrawal of dealership licence.

    Association of Bureau De Change Operators of Nigeria (ABCON) President Aminu Gwadabe has said the international money transfer monopoly enjoyed by Western Union and MoneyGram would soon be broken.

    He said the CBN is processing new applications from prospective operators to widen the international money transfer space, adding that  accepting new entrants into the international money transfer market would strengthen the naira and get the country out of its currency crises.

  • CBN’s rate hike more bitter than sweet, say analysts

    CBN’s rate hike more bitter than sweet, say analysts

    The increase in benchmark interest rate by 200 basis points by the Central Bank of Nigeria (CBN) on Tuesday would further burden the real sector and could worsen the volatility at the equities market.

    But the increase appeared targeted as support for the tottering foreign exchange management to woo foreign investors.

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday increased the Monetary Policy Rate (MPR) by 200 basis points from 12 per cent to 14 per cent. The apex bank however retained the Cash Reserve Requirement (CRR) at 22.50 per cent, the Liquidity Ratio (LR) at 30 per cent and the asymmetric window at +2 per cent and -5 per cent.

    According to analysts, while the increase was expected given the jump in inflation rate to 16.5 per cent, the decision would have far-reaching effects on the economy and the financial markets.

    Analysts at Capital Bancorp said the increase could lead to more activities in the fixed income segment of the financial market and banks would rather choose to place their funds in government securities than lending to the real sector of the economy as the rate of non-performing loans continue to rise.

     “We opine that the hike in benchmark interest rate will negatively impact the cost of borrowing to the real sector as banks reprice current interest rates on existing loans. We note that this will particularly affect the small-medium enterprises, hindering expansion plans and thus necessitating the need to pass-on the higher operating costs to consumers,” Meristem Securities stated.

    President, Manufacturers Association of Nigeria (MAN), Dr. Franks Jacobs said the rate hike was not favourable to the manufacturing sector.

    “MPC at 14 per cent to the commercial banks will go higher when manufacturers finally obtain loans from banks because they will mark it up. Currently, we learnt that some banks are lending at 26 per cent.

    It is not possible to sustain the manufacturing at this level,” Jacobs said, adding that manufacturers are already faced with myriad challenges with issues such as  poor infrastructure provision, multiple taxation, poor regulatory frame  in addition to unhealthy operating environment.

    Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Mr. Emmanuel Cobham criticised the MPC noting that it would compromise the real sector. He wondered how manufacturers would finance their raw materials and operation with such high interest from banks.

    Head, Research, FSDH Merchant Bank, Ayodele Akinwunmi, said while the CBN faced a policy dilemma between growth and curtailing the rising inflation, what Nigerian economy needs now is policy to drive growth now than inflation.

  • CBN orders banks to review foreign currency loans

    CBN orders banks to review foreign currency loans

    •Naira falls to N334.50 on interbank

    The Central Bank of Nigeria (CBN) has directed banks to review and provision for non-performing loans denominated in foreign currencies.

    CBN Director, Banking Supervision, Mrs. Tokunbo Martins, who made this known in a letter to all the banks titled: Provisioning for foreign currency loans, said the exercise was in continuation of the regulator’s efforts to enhance efficiency, facilitate liquidity and transparency in the foreign exchange market.

    This is happening as the naira yesterday weakened to an all-time low of N334.50 against the dollar on the interbank market, a day after the CBN hiked interest rates to lure foreign investors back into local assets, traders said.

    The naira fell by 5.8 per cent from its opening rate, and $10 million was traded at the new record low. Traders said investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 per cent between the official and black market naira rates.

    At the parallel market, the naira was, however, exchanging at N376 to dollar.

    “If we have more people trying to buy the naira then it should strengthen. I think we will keep seeing the trickles … I don’t think we will see large inflows until the fundamentals of the economy improves,” one trader told Reuters.

    On the foreign currency loans, Martins explained that the CBN issued the Revised Guidelines for the Operations of the Nigerian Inter-bank Foreign Exchange Market meant to liberalise the foreign exchange market and increase balances on foreign currency-denominated loans and advances in the books of banks.

    The target loans also include those that had been fully provided for under the previous exchange rate regime, but were yet to be written off, per our extant regulation under Section 3.21(a) of the Prudential Guidelines for Deposit Money Banks in Nigeria of July 1, 2010.

  • CBN pegs interest rate at 14% to promote savings

    CBN pegs interest rate at 14% to promote savings

    The Federal Government yesterday got a wake-up call on the budget.

    Its implementation should be sped up to stimulate economic activities to bridge the output gap and create jobs, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) said yesterday.

    The MPC offered to work with the fiscal authorities to quickly mitigate the economic pains in the country, particularly the discomfort of inflation.

    It raised interest rate from 12 to 14 per cent to encourage savings and investment.

    Addressing reporters at the end of the bi-monthly MPC meeting in Abuja yesterday, CBN Governor Godwin Emefiele, said “the MPC underscored the imperative of coordinated action, anchored by fiscal policy, to initiate recovery at the earliest time”.

    The MPC, Emefiele said, advocated “for the urgent diversification of the economy away from oil to manufacturing, agriculture and services and called on all stakeholders to increase investment in growth stimulating and high employment elasticity sectors of the economy in order to lift the economy out of its current phase”.

    The MPC, he said, recognised the weak macroeconomic environment, as reflected particularly in increasing inflationary pressure and contraction in real output growth. Members, Emefiele said, “call on the Federal Government to fast-track the implementation of the 2016 budget in order to stimulate economic activity to bridge the output gap and create employment”.

    Members, the governor said, agreed that the economy was passing through a difficult phase, dealing with critical supply gaps and underscored the imperative of carefully navigating the policy space to engender growth and ensure price stability. The MPC  summarised the two policy options it was confronted with as restarting growth or fighting inflation.

    The MPC expressed concern over non-payment of salaries in some states and urged express action in that direction to help stimulate aggregate demand.

    The MPC restated its commitment to measures and deployment of relevant instruments within its purview to complement fiscal policy with a view to restarting growth.

    The Committee also enjoined Deposit Money Banks (DMBs) to partner with the government and the CBN “by redirecting credit from low employment generating sectors to those capable of supporting growth, reducing unemployment and improving citizens’ standards of living”.

    Emefiele lamented that the economy is still saddled with the effects of the shocks of the first quarter of 2016, which led to a contraction in output arising from energy shortages, high electricity tariffs, price hikes, scarcity of foreign exchange and depressed consumer demand, among others.

    The CBN governor also said “the implementation of the 2016 budget in the second quarter remained slower than expected”. “The Committee noted that most of the conditions undermining domestic output growth were outside the direct purview of monetary policy.

    “Aggregate output contracted in virtually all sectors of the economy, with the non-oil sector recording a decline of about 0.18 per cent, compared with the 3.14 per cent expansion in the preceding quarter. Agriculture and Trade were the only sectors with positive growth at 0.68 per cent and 0.40 per cent, respectively, whereas, Industry, Construction and Services contracted by 0.93, 0.26 and 0.08 percentage point, respectively.”

    Speaking on the biting inflation Emefiele said “the increase in headline inflation in June reflected increases in both food and core components of inflation”. Core inflation “rose sharply for the fourth time in a row to 16.22 per cent in June, from 15.05 per cent in May; 13.35 per cent in April; 12.17 per cent in March; 11.00 per cent in February and 8.80 per cent in January having stayed at 8.70 per cent for three consecutive months through December, 2015. Food inflation also rose to 15.30 per cent in June, from 14.86 per cent in May; 13.19 per cent in April; 12.74 per cent in March; 11.35 per cent in February, 10.64 per cent in January and 10.59 per cent in December, 2015.”

    Emefiele noted that the MPC was concerned that while the situation called for obvious tightening of the monetary policy stance, the technical recession confronting the economy and the prospects of negative growth to year-end needed to be factored into the policy parameters.

    The MPC voted to: Increase the MPR by 200 basis points from 12.00 to 14 per cent; Retain the CRR at 22.50 per cent; Retain the Liquidity Ratio at 30.00 per cent; and Retain the Asymmetric Window at +200 and -500 basis points around the MPR.

    Emefiele assured the country that the CBN development finance focus remained.

    He said: “We would through target interventions continue to support Disbursements of funds to certain targeted sectors of the economy, particularly agriculture, mineral sector those who want to go into new and fresh manufacturing, importation of plants so as to boost industrial output.”

    “The MPR was moved up by 200 basis points for specific reasons and the CBN remains committed to boost through targeted intervention and through its anchor borrower programme not only for rice but also for tomato and other agricultural produce where we see potentials for strong comparative advantage in the country, Emefiele said.

  • CBN canvasses for more states’ funding of youth training from states

    The Central Bank of Nigeria, Entrepreneurship Development Centre (CBN/EDC), has called for more funding by the Southwest states to train more youths to make them self-reliant.

    The Project Director of CBN/EDC Southwest, Dr Olumide Ajayi made the call in a communique issued in Ibadan, the Oyo State capital, after second meeting of the Technical Advisory Committee (TAC) of EDC held at the Lagos State Ministry of Wealth Creation and Employment.

    According to him, without funding by the Southwest states the centre cannot achieve its aim of training more youths to be entrepreneurs.

    “Concerning the challenges CBN/EDC is experiencing, nothing has been done by Oyo State which is the hosting state. Since Oyo State is hosting the SW/EDC on behalf of the Southwest, it would be a good if TAC members could meet with the Oyo State government concerning the challenges CBN/EDC is facing in their State,” he said

    Ajayi praised Osun State for its involvement in CBN/EDC activities, noting that it is the first to give the centre sponsored trainees.

    He said: “Osun State gave CBN/EDC 135 participants that are currently trained. Still on participation, Ogun State requested for names of those trainees that have been trained by CBN/EDC and who are doing businesses in the state for funding through the BOI-OGSG fund.

    “Ogun State promised to give more funds to CBN/EDC but the trainees need to have their businesses in Ogun State. In order to achieve this, it would be if we can have trainings organised in the state to enable more indigenes that do businesses in the state to participate.

    “The centre has also started Youth Innovation and Entrepreneurship Development Programme (YIEDP) for current and ex-corps members who served in the last five years. The essence of the programme is to train youths on entrepreneurship and teach them how to write a bankable business plan. If the business plan is viable enough, they would be granted loans to begin their own businesses.”

    The director also stated that the centre has built an ICT Incubation Scheme Tech-hub to assist people to develop their business or ideas.

    ‘’The hub helps them develop their ideas when they are set for market. The incubation centre gives them opportunity to start their businesses pending when they have their own office,” Ajayi said.

    Earlier in his remarks, The Lagos State Commissioner for Wealth Creation and Employment, Babatunde Durosimieti, emphasised that the major reason for the creation of the ministry is to proffer lasting solution to unemployment.

    The Commissioner commended the gesture of CBN/EDC towards the initiative, adding that the ministry looks forward to working with ALF/CBN/EDC Southwest in order to create a synergy in the region.

  • How we’ll reduce economic pains – CBN

    How we’ll reduce economic pains – CBN

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has offered to coordinate activities with fiscal authorities to quickly mitigate the economic pains in the country, particularly inflation.

    Addressing journalists at the end of the bi-monthly MPC meeting in Abuja on Tuesday, the CBN Governor, Mr. Godwin Emefiele, said “the MPC underscored the imperative of coordinated action anchored by fiscal policy, to initiate recovery at the earliest possible time.”

    The MPC, Emefiele said, advocated for urgent diversification of the economy away from oil to manufacturing, agriculture and services and urged stakeholders to increase investment in growth stimulating and high employment elasticity sectors of the economy in order to lift the economy out of its current phase.

    The CBN governor said the MPC recognized the weak macroeconomic environment as reflected in the increasing inflationary pressure and contraction in real output growth.

    The committee, according to Emefiele, urged the Federal Government to fast-track the implementation of the 2016 budget in order to stimulate economic activity and generate employment.

     

  • Banks ignore CBN’s directive on dollar sales to BDCs

    Banks ignore CBN’s directive on dollar sales to BDCs

    •Naira recovers in parallel market

    Commercial banks have shown little or no interest in implementing the Central Bank of Nigeria (CBN’s) directive that they sell dollar to bureaux de change (BDC) operators, The Nation has learnt.

    The lenders are complaining that the CBN did not spell out their margin in the said transaction, which makes the zeal to implement it almost non-existent.

    The CBN had over the weekend, lifted its six-month ban on forex sales to BDC operators. In a circular to authorised dealers titled: “Sales of Foreign currency proceeds of international money transfers to Bureaux De Change operators”, signed by the CBN Acting Director, Trade & Exchange, W.D Gotring, the apex bank said the policy shift would ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange market.

    Confirming the development, President Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe, said the lenders have shown high level of unpreparedness to execute the CBN’s directive to sell the greenback to BDCs.

    He said the BDCs have no direct access to Western Union and MoneyGram, which are the key international money transfer agents, hence the operators rely on banks to access the funds.

    He also disclosed that most of the offshore inflows are dry transactions, meaning that they are cash-in cash-out deals with nothing left for BDCs.

    He told The Nation that although the policy is already having positive impact on the naira exchange rate at the parallel market, the unwillingness of the banks to sell to BDCs is adversely affecting the expected positive impacts on rates.

    Gwadabe said the CBN should give the BDCs the sole right to sell Business Travel Allowances (BTAs) and Personal Travel Allowances (PATs) to enable them fix demand at the retail end of the market.

    “The policy has positive impact on rates. The naira today (yesterday) exchanged at N374 to dollar against, N378 last Friday”.

    However, on the official market, the naira yesterday slipped 2.5 per cent to a new closing low of N310 per dollar, failing to lure in local investors or foreign players as trade dried up a day before an expected interest rate hike from the CBN.

    The currency had opened at a record low of 302.10 and traded a total of just $8.64 million by the close, far less than $100.54 million on Friday, when the CBN spurred the market by selling some of its dollars.

  • Banks fail to meet CBN’s forex terms

    Banks fail to meet CBN’s forex terms

    The Central Bank of Nigeria (CBN) is set to cancel the Foreign Exchange Primary Dealers (FXPDs) status of some of the 15 FXPDs banks for recording low forex volumes of transactions against set guidelines, The Nation has learnt.

    Some of the FXDPs banks include FirstBank, Zenith Bank, United Bank for Africa (UBA), Access Bank, GTBank, Stanbic IBTC and Ecobank Nigeria.

    The CBN appointed the FXDPs lenders to boost dollar liquidity in the forex market but their performance in achieving the set target has not met the CBN’s expectations, given the continued dollar scarcity and poor liquidity in the market.

    The FXDPs lenders met a minimum of N400 billion in total foreign currency assets; minimum shareholders’ fund unimpaired by losses of at least N200 billion and minimum liquidity ratio of 40 per cent set by the regulator.

    Besides, the lenders operating as FXPDs were expected to have strong forex trading capacity to deploy all FMDQ Thomson Reuters FX trading Systems or any other systems approved by the CBN.

    The CBN expects FXPDs banks to act as professional counterparties and market participants in their overall conduct and support of market efficiency and liquidity. The participants are also required to resell a minimum of 70 per cent of any dollar uptake from the CBN in the inter-bank market on the day of purchase.

    They are to participate in the market on a daily basis or such period as may be required by the CBN. “FXPDs that record low volumes of FX transactions with the CBN during the evaluation period, that repeatedly provide bids and offers that are not reasonably competitive, or that fail to provide useful market information and commentary, shall be deemed not to have met the expectations of the CBN,” the guidelines stipulated.

    “Furthermore, while the main responsibilities of the FXDPs shall be to foster liquidity of forex purchases, CBN may trade on their offers. FXDPs that constantly give uncompetitive quotes risk the CBN trading on their offers. In such circumstances, the CBN may limit  FXDP’s participation in any or all operations, approved products and may suspend or terminate the authorised dealer’s status of FXDP if it continues to fail to meet these aforementioned expectations,” it added.

    But since the appointment of the FXDPs lenders in June, the CBN has consistently been intervening in the market, with little or no inputs from the lenders because of poor dollar liquidity. The CBN intervened via the Special Secondary Market Intervention Sales (SMIS) – Retail (End-users) and the Interbank FX market to clear a total forex backlog of $4.02 billion in the early days of the policy.

    When contacted, CBN Acting Director, Corporate Communications, Isaac Okorafor, said the FXDPs policy is still in force. He said the apex bank, like every other participant, intervenes in the market only when the need arises.

    But Currencies Analyst and Head Treasury at Ecobank Nigeria, Olakunle Ezun, said the CBN still remains the major supplier of dollar to the market despite the appointment of the FXDPs banks.

    “So far, it appears the Central Bank of Nigeria (CBN) still remains the major supplier of dollars, with over 95 per cent of market volume. The CBN has supplied around $1 billion spot and $3.5 billion forward to Authorised Dealers (Banks) and direct to end-users since Monday, June 20 2016. Trading in the interbank foreign-exchange market is yet to pick up, partly because there is too little foreign-exchange liquidity in the market. The interbank average turnover is barely about $40 million a day, compared to weekly volumes of around $1 billion about three years ago,” he said.

    Ezun admitted that forex liquidity remains a challenge despite CBN and FMDQ efforts to support interbank forex market with Forwards and Over-the-Counter (OTC) Forex Futures/Naira Settled Forwards transactions.

    “The CBN’s ability to meet its matured obligations as at when due is not in doubt, but recent development as per frequency and volume of CBN’s forex sales to the Foreign Exchange Primary Dealers (FXPDs) have questioned CBN capacity to support the market as growing import and investment demand are not being settled,” Ezun added.

    The guidelines insist the nature of the relationship with the FXPDs is primarily a counterparty relationship and require that the FXPDs qualified lenders register as authorized dealers designated to deal with the CBN on large trade sizes on a two-way dollar quote basis. They serve as the bulk traders dealing directly with the CBN on forex matters.

  • CBN meets over volatile naira, interest rate

    CBN meets over volatile naira, interest rate

    •Lifts ban on forex sales to BDCs

    The Monetary Policy Committee (MPC) is set to review recent developments in the global and domestic economy at a crucial two day meeting commencing tomorrow in Abuja.

    Topping the agenda for the meeting is the volatility of the naira in the parallel market in the aftermath of the introduction of the flexible forex policy regime, likely interest rate hike, and rising inflation.

    Ahead of the meeting, the Central Bank (CBN) has lifted the ban on forex sales to bureaux de change (BDC) operators.

    In a circular to authorized dealers, the  CBN Acting Director, Trade & Exchange ,W.D Gotring, said the policy shift would ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange market.

    The MPC meeting is coming against the backdrop of fears about the global economy, sustained sub-optimal domestic economic performance and declining economic growth and consumer purchasing power.

    Analysts believe the MPC will likely be weighing options on the exchange rates in view of rising fiscal constraints.

    Managing Director, Afrinvest West Africa Limited, Ike Chioke, said the International Monetary Fund (IMF) projected a 1.8 per cent contraction of the Nigerian economy in 2016, a 4.1 per cent downward revision from 2.3 per cent estimated in April.

    Besides, the June 2016 economic data to be released next month would confirm the economy to be in a recession.

    Chioke wants the MPC to be more proactive than reactive in its response to challenges in the economy.

    “The need to regain investor confidence in the aftermath of the newly launched forex framework should be a paramount item on the agenda of the MPC,” he said.

    He expects the MPC to raise interest rate by 100 basis points to 200 basis points and keep other rates constant to attract portfolio capital inflows which is yet to respond to currency market flexibility.

    “We believe the CBN will adjust benchmark policy rate to reflect this tight policy thrust, thus completing its policy back flip by taking the first option tomorrow and next. We believe taking this route will aid the CBN in stabilising the forex interbank market and buy some time for fiscal and monetary authorities to engage in more long term structural reforms to buoy competitiveness,” he predicted.

    The analyst said that since the last MPC meeting, volatility in the global economy has been amplified by Britain’s decision to exit the European Union (EU) at the tail end of last month.

    He said rising inflation, bearish second quarter 2016 growth outlook, weak credit expansion to the private sector, rising level of banks’ non-performing loans and volatility in the forex market have continued to pressure domestic economy and financial market.

    “The feedback effect of reforms in the energy sector has taken a further toll on price level as June inflation rose to 16.5 per cent in amid higher fuel prices and electricity tariff. The implementation of the floating exchange rate regime in the currency market triggered a 41.1 per cent depreciation of the naira as the equities market year-to-date return rose to seven per cent in anticipation of the return of foreign players,” he said.

    Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said the MPC will be closely monitoring the inflation data. He said a precipitated move such as lowering rates is an unlikely outcome at tomorrow’s meeting.

    “The market is still digesting the impact of the N1.3 trillion debit for the $4.02 billion forward sale of forex,” he said.

    Chief Economist, Africa at Standard Chartered Bank, Razia Khan, said inflation remains pressured despite the Central Bank of Nigeria’s (CBN’s) liberalised forex regime which took off last month.

    She said the CBN’s monetary tightening intent is likely to come under scrutiny adding that the requirements for forex liberalisation may supersede banking-sector and wider economic concerns.

    In the circular  entitled Sales of Foreign Currency Proceeds of International Money Transfers to Bureaux De Change Operators announcing  the lifting of the ban on forex sales to bureaux de change (BDC) operators, Gotring said the policy shift would ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange market.

    The CBN had in January this year, stopped all forms of forex sales to BDCs, accusing the operators of round tripping and frustrating the policies meant to stabilize the naira.

    But despite the stoppage of dollar sales to BDCs, the local currency has continued to depreciate, and was exchanging at N305 to dollar in the parallel market as at yesterday and N378 to dollar in the parallel market.

    Gotring has now directed all authorised dealers who are agents to approved International Money Transfer Operators to sell foreign currency accruing from inward money remittances to licenced Bureaux De Change Operators (BDCs) with immediate effect.

    He explained that all International Money Transfer Operations are required to remit foreign currency to the agent banks for disbursement in naira to the beneficiaries while the foreign currency proceeds shall be sold to the BDCs.

    “The foreign currency proceeds of International Money Transfer sold to BDC operators shall be retailed to end-users in compliance with the provisions of Anti-Money Laundering Laws and observe the appropriate Know Your Customer  principles, including use of Bank Verification Numbers (BVNs)”.

    Furthermore, he urged authorised dealers and BDCs to render returns on their operations daily and monthly to the CBN through the Electronic Financial Audit Sub-System (e-FASS) application in accordance with extant regulation, failure which there would be sanctioned, including withdrawal of dealership licence.

  • Naira crashes again in major market segments

    Naira crashes again in major market segments

    The naira on Friday depreciated further against the dollar, pound sterling and the euro in all segments of the market.

    At the parallel market, the naira shed three points to exchange at N378 to the dollar at the close of trading on Friday afternoon, against N375 it closed with on Thursday, representing a depreciation of 0.8 per cent.

    It also weakened further against the pound sterling and the euro as it exchanged at N487 and N405 respectively against N485 and N405 it traded respectively on Thursday.

    However, the Nigerian currency maintained losses at N375, N485 and N405 respectively against the dollar, pound sterling and the euro at the Bureau de Change segment of the market.

    The naira also performed poorly at the interbank window as it crashed further to N307.98 to a dollar from N295.38 it traded on Thursday.

    Currency traders expressed worry over the extension of losses of the naira against other currencies in nearly all the segments of the foreign exchange market.

    They, however, called on the Central Bank of Nigeria to urgently intervene in the market to save the naira from further crash.

    It would be recalled that the CBN, on June 20, began implementation of flexible exchange rate policy which many analysts hailed as the magic wand that would shore up the value of the naira.

    Four weeks into its implementation, the naira appeared lonely in the face of its trial by macro-economic elements as forces beyond it seemed bent on prolonging its trial.

    Stakeholders count on the Monetary Policy Committee meeting of the Central Bank of Nigeria holding next week to pull the right monetary policy lever needed to salvage the naira.