The Nation Newspaper

Tag: cbn

  • CBN: substandard products not covered in currency swap

    The Central Bank of Nigeria (CBN) said the currency swap agreement it reached with the People’s Bank of China (PBoC), will not cover the importation of substandard goods into the country.

    Its Governor, Mr Godwin Emefiele, who spoke yesterday in Abuja at the Currency Swap sensitization for North Central Zone, said the swap deal had the potential to reduce importation of made-in-China substandard goods as only goods approved by regulatory bodies such as the Standards Organisation of Nigeria (SON) would qualify under the agreement.

    Represented by the bank’s acting Director, Corporate Communications, Mr Isaac Okorafor, at forum, Emefiele said: “If there is anybody that thinks he or she will collect Renminbi through this window and sell on the street, is sadly mistaken. Transactions under the deal will be done electronically and this deal is only for products that originate from China. It does not apply to any transaction in Asia, outside the Chinese territory.”

    In his presentation, Assistant Director, Financial Market Department at the CBN, Mr Oreva Eweh, identified “speed and efficiency as some of the benefits of trading under the Renminbi denominated window for the transaction with China.”

    Also speaking, Mr Richard Maikai, of the Trade and Export Department of the CBN, shed light on documentation requirements under the agreement.

    He said:”Importers intending to import from China must obtain proforma invoice denominated in Renminbi as part of the documents required for registration of Form M. Also, the foreign exchange window cannot not be used for payments on transactions in which the beneficiaries are not in China. In addition, authorised dealers shall not open domiciliary accounts denominated in Renminbi for customers.”

    Maikai said Bureau de Change (BDC) Operators were not eligible to take part in the transaction as cash transactions would not be allowed under the window.

    Earlier, the Director-General, Abuja Chamber of Commerce and Industry,  Mines and Agriculture (ABUCCIMA), Mr Adetokunbo Kayode, said the currency swap deal would make doing business easier for its members.

  • Forex: Wholesale market, others get $210m from CBN

    The Central Bank of Nigeria (CBN) has sustained its intervention in the inter-bank foreign exchange market by injecting $210 million into the market.

    At Tuesday’s trading, the Bank offered the sum of $100,000,000 as wholesale interventions and allocated the sum of $55,000,000 each for Small and Medium Enterprises (SMEs) forex window and the invisibles sector, for customers requiring forex for Business/Personal Travel Allowances, tuition and medical fees, among others.

    Confirming the figures in Abuja, the Acting Director, Corporate Communications at the CBN, Mr. Isaac Okorafor, said the Bank was pleased at the performance of the naira, noting that the currency had continued to enjoy stability against the dollar and other major currencies of the world in recent times.

    Okorafor reassured the public that the Bank would continue to intervene in the interbank foreign exchange market in line with its resolve to ensure liquidity in the forex market and maintain stability. He reiterated that the steps taken by the CBN in forex management had resulted in further reduction in the country’s import bills and accretion to its foreign reserves.

    It will be recalled that the CBN last Friday, intervened in the Retail Secondary Market Intervention Sales (SMIS) to the tune of $327 million in the agricultural and raw materials and CNY 69 million in the spot and short-tenored forwards.

    The naira continued to maintain its strong stand against major currencies around the globe, exchanging for N360/$1 in the BDC segment of the market on Tuesday, August 14.

    Meanwhile, the CBN will today sensitise stakeholders in Abuja and the adjoining States on the Bilateral Currency Swap Agreement between the CBN and the People’s Bank of China (PBoC) signed on April 27.

     

  • Forex: CBN injects $327m, CNY 69m into Retail SMIS

    The Central Bank of Nigeria (CBN) has injected $327.4 million into the interbank retail Secondary Market Intervention Sales. This is in addition to the sale of CNY 69,707,333.39 in the spot and short-tenored forwards.

    The figures obtained from the CBN at the weekend, showed that the dollar-denominated interventions were only for concerns in the agricultural and raw materials sectors.

    The Acting Director, Corporate Communications at the CBN, Isaac Okorafor said the exercise, which was in tune with the  CBN guidelines, was for the payment of Renminbi denominated letters of credit for agriculture as well as raw materials. He added that the sales in the Chinese Yuan were through a combination of spot and short-tenored forwards, arising from bids received from authorised dealers.

    While noting that availability of Renminbi was sure to ease pressure on the Nigerian foreign exchange market, Okorafor attributed the relative stability in the foreign exchange market to CBN intervention as well as the sustained increase in crude oil prices in the international market. He further assured that the CBN would remain committed to ensuring that all the sectors continue to enjoy access to the needed foreign exchange by Nigerians.

    Meanwhile, $1 exchanged for N360 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.35.

  • CBN injects $210m into forex market

    The Central Bank of Nigeria (CBN) yesterday injected $210 million into the inter-bank Foreign Exchange (forex) Market. The move was meant to boost forex availability and also meet customers’ requests in various segments of the market.

    At the forex trading, the CBN offered $100 million to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment received $55 million. Customers requiring foreign exchange for invisibles, such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated $55 million.

    The bank’s Acting Director, Corporate Communications Department (CCD), Isaac Okorafor, confirmed the figures and reassured the public that the bank would continue to intervene in the interbank foreign exchange market in line with its quest to sustain liquidity in the market and maintain stability.

    He added that the steps taken so far by the bank in the management of forex had paid off, as reflected by reduction in the country’s import bills and accretion to its foreign reserves.

    Meanwhile, the naira exchange rate remained stable in the forex market, exchanging at an average of N360/$1 in the BDC segment of the market on Tuesday.

     

  • CBN: framework’ll be strengthened to check cyber crimes

    With the global cost of cybercrime estimated at over $600 billion in 2017, the Central Bank of Nigeria (CBN) yesterday said it would strengthen its regulatory framework to check cybercrimes on Nigeria’s financial system.

    Deputy Governor, Financial Systems Stability of the CBN Mrs. Aishah Ahmad, made this disclosure during a cyber security conference in Abuja.

    She stated that “whilst a variety of organisations are exposed to cybercrime, the financial sector is particularly vulnerable given its crucial role of financial intermediation in a highly connected global financial system.”

    According to her, while technology is transforming the way financial transactions are being conducted,  she lamented that “the adoption of innovation such as robotics and artificial intelligence and block chains have potentials to disrupt the process.”

    This development, she said. has necessitated the need to further strengthen regulatory framework because of the “attractiveness of globalisation, interconnectivity and financial innovation are being undermined by incidences of cybercrimes.”

    She said the CBN was aware of these threats and has convened the conference to tackle these threats.

    She noted that these series of cybercrimes “have ushered in complex security challenges some of which range from identity and intellectual property theft, email spamming, virus dissemination, sophisticated hacking and theft by digital crime syndicate, all of which have led to a significant rise in cybercrimes.”

    “At the CBN, we are committed to strengthening the regulatory framework for cyber risk, we are encouraging our regulated institutions to build realistic vulnerability testing systems for contingency planning.” she said.

    According to her,  “a recent study by the IMF estimated global annual losses from cyber-attacks may be close to nine per cent of banks’ net income or around $100 billion, and in a severe scenario, where the frequency of attacks are twice as high as currently experienced and with greater contagion, losses could be as high as $350 billion.”

    Also speaking at the event, the Director, Information Technology Department, CBN, Mr John Ayoh said the CBN was putting up strong measures to improve data protection in the banking industry.

    He noted that steps have to be taken to ensure that the CBN is not attacked by cyber criminals and he acknowledged that an attack on the central bank will affect the stability of the financial system.

    According to him, “it will make CBN lose tremendous reputation in the market place. People will start to wonder whether or not they can depend on the CBN, he said.

  • CBN sets five-year timeline on cheque storage

    The Central Bank of Nigeria (CBN) has set a five-year timeline for banks to keep physical cheque presented to them by customers after which the instrument may be disposed.

    This is contained in the Nigerian Bankers’ Clearing System (NBCS) Rules released yesterday by the apex bank. The policy is in line with the CBN’s exercise  of  the  powers  conferred  on  it under Sections  2(d),  33  (1)(b)  and  47(2)  of  the  CBN  Act  2007  — to  promote a sound  financial system,  issue  guidelines,  facilitate  the  development  of  an  efficient  and effective  payments  system.

    The  NBCS Rules,  which took effect immediately, said any licensed bank that is not a member of the NBCS may enter into an agency agreement  with  any  member – bank  for  the  purpose  of  accepting cheques and other instruments drawn on it and for collecting cheques drawn on other banks.

    A  member  bank  may  be  penalised  by  suspension  from  participating  in  clearing for such periods as shall be determined by the CBN for non-attendance of two consecutive meetings of the Committee, without a satisfactory reason communicated in writing within five working days before or after any scheduled meeting.

    Eligible financial instruments for clearing purposes are paper-based payment instruments, such as cheques, managers  cheques, drafts , dividend/interest warrants, debit/credit notes, bankers  payments.

    Paper-based Payment Instruments deposited by the customer at any member bank shall be deemed paid by 10pm of the next working day (T+1) except where it is returned by the paying bank, a special caution or an extension of value date request has been received from the paying bank.

    A  settlement  bank  shall  maintain  strict  confidentiality  in  respect  of  any confidential  information  made available  to  it pursuant  to their  settlement  agency agreement and may not disclose same except with the express permission of the Non-Settlement Bank or as may be lawfully required.

    Also, Settlement Bank shall not use any information provided by Non-Settlement Bank  for  any  purpose  other than  as  permitted  or  required under  the  Agency Agreement.

  • Settlement banks to submit N15b clearing collateral with CBN

    The Central Bank of Nigeria (CBN) has asked settlement banks to provide clearing collateral of not less than N15 billion treasury bills.

    The directive was contained in the CBN’s Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2018/2019 released by the regulator.

    The CBN said it would continue to categorise banks into settlement and non-settlement banks for clearing and settlement. It said settlement banks participate directly in the clearing houses and receive their net clearing position in their settlement account with the CBN, while non-settlement banks receive their net clearing position through the settlement account of their settlement bank.

    “Any bank applying for direct participation as a settlement bank shall be required to possess the capacity to provide the required clearing collateral of N15 billion, subject to periodic review. It shall have the ability to offer agency facilities to other banks and to clear and settle on their behalf. It shall also have adequate branch network, in all the CBN locations,” the CBN said.

    “Banks that meet the specified criteria shall continue to be designated as “Settlement Banks.” Consequently, non-settlement banks, called “Clearing Banks” shall continue to carry out clearing operations through the settlement banks under agency arrangement. The terms of agency arrangements shall be mutually agreed between the Settlement Banks and the Clearing Banks,” the CBN said.

    The CBN said it would continue to adopt the risk-based supervision (RBS) approach in the supervision of institutions under its regulatory purview.

    “The objective of the RBS approach is to provide an effective process to assess the safety and soundness of banks and other financial institutions. This is achieved by evaluating their risk profile, financial condition, risk management practices and compliance with applicable laws and regulations,” it said.

    It urged banks to pursue profitability in their business models through efficient operations, adding that they should charge competitive rather than excessive rates of interest in the course of their transactions.

    The lenders are also to disclose their prime and maximum lending rates as fixed spreads over the Monetary Policy Rate.

     

  • CBN’s PMI shows manufacturing expanding

    The Manufacturing Purchasing Managers’ Index Survey conducted by the Central Bank of Nigeria (CBN) has shown  56.8 index points, indicating expansion in the manufacturing sector for the 16th consecutive month.

    The index, which was for last month however grew  at  a slower rate  when  compared  to the  indexin  the  previous  month.  Of  the 14 subsectors surveyed,  13 reported growth in the review  month  in  the  following  order: petroleum & coal products, printing and related     support     activities, paper  products electrical equipment, primary   metal, furniture   and   related products. Others are nonmetallic mineral products, transportation  equipment, textile,  apparel,  leather  and  footwear, chemical  and  pharmaceutical  products, food,  beverage/tobacco  products, cement and fabricated metal products.

    The plastics and    rubber products subsector declined   in   the review month. At 59.0 points, the production  level index   for the manufacturing sector grewfor  the 17th consecutive month in July 2018.

    The index indicated a slower   growthin   the current month, when compared  to itslevel  in  the  preceding month. Twelve of   the 14 manufacturing sub sectors recorded increase  in production level, while  two remained  unchanged.

    At 55.8 points, the new  orders  index grew   for  the sixteenth consecutive month,   indicating   increase   in   new orders in July 2018. Twelve subsectors reported growth, while two contracted in  the  review  month.

    The manufacturing supplier delivery time index stoodat 56.8 points in July 2018, indicating faster supplier delivery    time    for the 14th consecutive month. Nine subsectors recorded improved suppliers’ delivery time, three  remained  unchanged while two contracted.

     

  • Yuan sale by CBN excites traders

    The Central Bank of Nigeria sold yuan at a range of N49-51 at its first auction of the Chinese currency last week, traders said yesterday.

    The auction, which is part of an attempt to encourage the use of an alternative trading currency, particularly given the high level of imports from China, sold the yuan for immediate value and for 15-day settlement, traders said.

    Some lenders got as much as 60 per cent of the volume they applied for, while one bank got just five per cent. They said the volume sold was based on the price quoted for the yuan at the auction.

    China is Nigeria’s biggest trading partner after the U.S., with trade volumes between the two totaling $9.2 billion in 2017, according to data compiled by Bloomberg. Nigeria runs a deficit, importing $7.6 billion of goods including textiles and machinery from China and exporting just $1.6 billion, mainly oil and gas.

  • CBN injects $340m, CNY 69m into Retail SMIS

    THE Central Bank of Nigeria (CBN), at the weekend, injected $340 million into the interbank retail Secondary Market Intervention Sales (SMIS). This is in addition to the sale of 69 million Chinese Yuan (CNY)  in the spot and short tenored forwards.

    The figures obtained from the CBN showed that the United States (US) dollar denominated interventions were only for concerns in the agricultural and raw materials sectors.

    According to its Acting Director, Corporate Communications, Isaac Okorafor, the sales in the Chinese Yuan were through a combination of spot and 15-day tenors. He said the exercise, in line with its guidelines, were for the payment of Renminbi denominated Letters of Credit for agriculture as well as raw materials and machinery.

    Okorafor also explained that the requests attended to were bids received from authorised dealers, adding that Renminbi’s availability was sure to ease pressure on the Nigerian foreign exchange market.

    He attributed the relative stability in the foreign exchange market hugely to the continued intervention of the CBN as well as the sustained increase in crude oil prices in the international market.

    The CBN spokesman further assured that the CBN would remain committed to ensuring that all the sectors continue to enjoy access to the foreign exchange required for the business concerns, whether in US dollars or Chinese yuan.

    It will be recalled that the CBN on Friday, July 20, announced the commencement of its intervention in the sale of foreign exchange in Chinese Yuan (CNY), marking the concrete commencement of the Bilateral Currency Swap Agreement (BCSA) signed with the People’s Bank of China (PBoC) on April 27, 2018.

    The statement announcing the flag-off of the sale had explained that there would be no predetermined spread on the sale of FX Forwards by authorised dealers to end-users under the Special SMIS-Retail, adding that authorised dealers would be allowed to earn 50 kobo on the customers’ bids.

    Meanwhile, $1 exchanged for N360 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.35.