The Nation Newspaper

Tag: Collins Nweze

  • $8.1b remittance: CBN, MTN Nigeria reach truce

    The Central Bank of Nigeria (CBN) and MTN Nigeria Communications have resolved issues relating to the $8.1 billion foreign exchange remittances by the telecom giant, the apex bank announced yesterday.

    In a statement, the CBN, however, identified that the proceeds from the preference shares in MTNN’s private placement remittances of 2008 were irregular, having been based on Certificate of Capital Importation (CCIs) that were issued without the final approval of CBN.

    “The CBN and MTNN have mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations,” the CBN said.

    In August, last year, the apex bank directed MTNN to reverse repatriations valued at $8.1 billion done on its behalf by four commercial banks between 2007 and 2015 on the basis of CCIs irregularly issued to MTNN.

    The apex bank said that following the keen interest shown by various stakeholders sequel to the regulatory action, the CBN committed to engage further with MTNN with a view to achieving an equitable resolution.

    “Consequent upon the above, MTNN, led by its Nigerian shareholders, held intensive engagements with the CBN in the course of which it supplied additional material information, not previously offered to the bank, satisfactorily clarifying its remittances.

    Read also: CBN gets kudos for suspension of forex on fertiliser import

    “Having now reviewed the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.

    “The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter.

    “The CBN assures foreign investors that the integrity of the CCIs issued by authorized dealers remain sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.”

  • BVN: Banks that may suffer from deposit loss

    BVN: Banks that may suffer from deposit loss

    The biggest casualties in terms of deposit loss should the Federal Government go-ahead to implement court order on funds forfeiture for Bank Verification Number (BVN) non-compliant accounts will be the first generation banks, The Nation has learnt.

    These set of banks, according to an industry source who spoke anonymously, seem to have the largest number of customers that have stayed with them for close to or over 100 years.

    Justice Dimgba Igwe of the Federal High Court, ruling on an ex parte application filed by the Federal Government through the Office of the Attorney-General of the Federation on October 21, granted the temporary forfeiture of funds in accounts not linked to BVN within two weeks unless the owners justify their ownership of such accounts. The deadline for compliance ended yesterday.

    The source said it would be very difficult to put a figure to the 46 million accounts not linked to BVN, adding that: “The first generation banks are believed to have the largest number of dormant accounts, although that has not been established. These banks have the largest number of dormant accounts because of how long they have been in the business,” he said.

    The source explained that some new generation banks also have a large number of accounts, but a majority of their customers are from the middle class. He said many of the customers joined the bank during or after the banking consolidation of 2005, in what is regarded in the banking industry as ‘’Flight to Safety’’.

    “A lot of the middle class tend to associate more with some new generation banks. So, even though the accounts are many, but they remain largely active,” the source said.

    The banks with the largest impact are likely to lose deposits running into billions of naira, and that may affect their liquidity positions.

    The Federal Government has secured an interim forfeiture order from Federal High Court which would now allow it to freeze the accounts of bank customers in Nigeria who have no Bank Verification Number, BVN.

    The order obtained before Justice Dimgba gave the Federal Government the nod to instruct the banks to disclose any investments made with these funds and to freeze any outward movement from these accounts.

    The court order mandates the Central Bank of Nigeria (CBN) to appoint an examiner to look into the books of any commercial bank that fails to comply. The banks are expected to provide the names of accounts without BVN, account numbers, outstanding balances, domiciliary accounts without BVN, branch/locations where these accounts are domiciled.

    The CBN through the Banker’ Committee and in collaboration with all banks in Nigeria on February 14, 2014, launched a centralised biometric identification system for the banking industry tagged Bank Verification Number (BVN). The BVN gives a unique identity that can be verified across the Nigerian Banking Industry (not peculiar to one bank) while bank customers are protected from unauthorised access.

  • BREAKING: Banks to keep database of fraudulent customers

    BREAKING: Banks to keep database of fraudulent customers

    The Central Bank of Nigeria (CBN) on Thursday directed banks to establish a database of their customers identified through their Bank Verification Numbers (BVNs) to be involved in a confirmed fraudulent activity in the banking industry.

    The directive was contained in the Regulatory Framework for Bank Verification Number (BVN) Operation and Watch-list for Nigerian Financial System released by the CBN. The implementation of the framework is with immediate effect.

    CBN Director, Banking & Payments System,’Dipo Fatokun, who signed the framework, said bank customers are to by this framework, abide by  the regulatory framework for BVN operations and the watch-list for the Nigerian Banking Industry and also report all suspicious or unauthorized activities on their accounts.

    Data from the CBN showed that Nigeria experienced a total of 3,500 cyber-attacks with 70 percent success rate and loss of $450 million within the last one year mainly through cross-channel fraud, data theft, email spooling, phishing, shoulder surfing and underground websites.

    Although e-fraud rate in terms of value dropped by 63 percent, after the BVN introduction and improved collaboration among banks via the fraud desks, the total fraud volume rose significantly by 683 percent.

    The new regulation is expected to assist the CBN to a great deal, in curbing the menace of fraudsters

    According to Fatokun, the new framework is in the exercise of the powers conferred on the CBN, by Sections 2 (d) and 47 (2), of the CBN Act, 2007, to promote the development of efficient and effective payments systems for the settlement of transactions.

    He said the framework provides standards for the BVN operations and watch-list for the Nigerian Banking Industry. The watch-list comprises a database of bank customers’ identified by their BVNs, who have been involved in a confirmed fraudulent activity in the banking industry in Nigeria.

    Fatokun said the regulatory framework shall guide activities of the participants in the provision of the BVN operations in Nigeria and that the CBN, Nigeria Inter-Bank Settlement System (NIBSS), Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Bank Customers are participants in its implementation.

    He said the CBN, in collaboration with the Bankers Committee, proactively embarked upon the deployment of a centralized BVN System and launched the BVN in February 2014. This, he said, was part of the overall strategy of ensuring the effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system.

    The BVN gives a unique identity across the banking industry to each customer of Nigerian banks.

    “This framework also defines the establishment and operations of a Watch-list for the Nigerian Banking Industry, to address the increasing incidences, of frauds, with a view to engendering public confidence in the banking industry.

    “This framework, without prejudice to existing laws, is a guide for the operations of the watch-List in the Financial System.”

    The Watch-list is a database of bank customers identified by their BVNs, who have been involved in confirmed fraudulent activities.

    The framework is expected to clearly define the roles and responsibilities of stakeholders; clearly, define the operations of the BVN in Nigeria; define access, usage and management of the BVN information, requirements and conditions and provide a database of watch-listed individuals.

    It is also expected to outline the process and operations of the watch-List and deter fraud incidences in the Nigerian Banking Industry.

    In implementing this framework, the CBN is expected to approve the Regulatory Framework and Standard Operating Guidelines as well as approve eligible users for access to the BVN information.

    The Nigeria Interbank-Settlement System (NIBSS) is to collaborate with other stakeholders to develop and review the Standard Operating Guidelines of the BVN while the banks are to ensure proper capturing of the BVN data and validate same before the linkage with customers’ accounts.

  • Bankers’ Committee gets tough with cyber criminals

    Bankers’ Committee gets tough with cyber criminals

    The Bankers’ Committee on Thursday issued a strong warning to e-fraudsters, declaring that serial offenders will be taken out of the banking system.

    Speaking on behalf of the committee members, Access Bank Managing Director, Herbert Wigwe, said banks were working out modalities that would enable them to establish a central database to identify and punish e-fraud perpetrators.

    Data from the Central Bank of Nigeria (CBN) showed e-fraud has been on the rise in recent years.

    Although e-fraud rate in terms of value dropped by 63 percent in nearly two years, after the Bank Verification Number (BVN) introduction and improved collaboration among banks via the fraud desks, the total fraud volume rose significantly by 683 per cent within the period.

    Also, Nigeria experienced nearly 3,500 cyber-attacks with 70 per cent success rate and loss of $450 million within the last two years mainly through cross-channel fraud, data theft, e-mail spooling, phishing, shoulder surfing and underground websites.

    “There is the need for a central database for suspected fraudsters in the system. It will ensure strict deterrent for fraudsters that send unsolicited SMS. We are taking very strict measures against e-fraud. Repeat offenders will be taken out of the banking system,” Wigwe said.

    Central Bank of Nigeria (CBN) Director, Banking Supervision, Ahmed Abdullahi, said the apex bank is moving towards rate convergence in the foreign exchange market. He said the economy will soon be out of recession, and that the apex bank will sustain its interventions in the foreign exchange market.

    Abdullahi said both the SMEs Forex Window and the Investor/Exporter Forex Window are all geared towards ensuring that more liquidity is introduced into the forex market to stabilise the local currency.

    “In the investor/exporter window, prices will be determined by market forces. It will allow investors come in and trade at their own prices. We want to boost confidence in the market and allow more inflow of forex,” he said.

    The CBN director also said that banks will henceforth, commit five per cent of their profit after tax to small and medium enterprises and Agric funding.

    Also speaking at the committee meeting, CBN’s Spokesman, Isaac Okorafor, said the apex bank has eliminated “frivolous demand” for foreign currency by introducing a multiple exchange rate system and has been intervening on the spot and forward markets to boost liquidity.

    He said the multiple exchange rates was aimed at improving dollar supply while allowing investors to trade their own dollars at a more market-determined rate.

    The naira traded at 305.85 to the dollar on the official interbank market on Thursday and 390 on the black market. It was quoted at 379.89 on investors’ window. The CBN has been intervening aggressively on the spot and forward markets to prop up the naira.

    The CBN yesterday offered $100 million to authorised dealers to meet the requests of wholesale customers at the forex auction in the interbank wholesale window.

    Okorafor, again disclosed this, adding that no intervention was made in the retail window in yesterday’s auction. He, however, disclosed that the Bank continued its weekly sale of forex to the Bureau de Change (BDC) segment to meet the needs of low-end users.

    Furthermore, he said the CBN had observed that quite a good number of dealers were adhering to the forex guidelines. Nevertheless, he said the CBN will continue to monitor the activities of authorised dealers to ensure that no outfit or individual circumvents the laid down forex rules.

    While urging all concerned to put the Nigerian economy first, he reiterated that the CBN was determined to guarantee the international value of the Naira.

  • CBN lifts manufacturing, power with $660m forex disbursements

    CBN lifts manufacturing, power with $660m forex disbursements

     The Central Bank of Nigeria (CBN) has disbursed $660.17 million to 1,342 manufacturers, power and other real sector operators for the procurement of raw materials, plants and machinery, foreign exchange (forex) utilisation report by apex bank has shown.

    The funds, sourced from the CBN and sold to the beneficiary customers at the official rate of about N30.5 to dollar, were handled by commercial, merchants and non-interest banks using the interbank market.

    The funds were specifically used for the procurement of raw materials, plants and machinery as specified in the Letters of Credit (LCs) under which they were sourced, and in-line with the CBN-stipulated import approval list.

    The forex utilisation report was  meant to promote transparency and accountability on the side of the lenders which act as a link between the regulator and the forex users.

    The report, which was for September, showed that large part of the funds went to 20 companies, with Dana Motors ($12,877,278.81), Nigeria Breweries ($6,240,000), A-Z Petroleum Products Limited ($12,962,425.04), Rahamaniya Oil & Gas ($19,220,000), Dag Motorcycles Industries Nigeria ($27,964,123) and Seven-Up Bottling Company Limited ($5,882,293.67) benefiting.

    Others are Biswal Limited ($6,779,858.11), HIS Nigeria Limited ($10,006,405.57), IPI Power Tech ($7,405,595.55), Promasidor Nigeria Limited ($5, 122, 472.80), Saba Steel Industries Limited ($11,147,478.58), and Crown Flour ($10,254,558). Also in the list are African Foundries Limited ($4,020,679.36), Parco Enterprises Limited ($6,558,320), Prime Plastochem Nigeria Limited ($5,668,012.75), TempoGate Oil & Gas ($7,145,279.25), Saro Agro Sciences Limited ($10,106,833.54), Midland Rolling Mills Ltd ($9,895,653.60), Flour Mills of Nigeria Plc ($11,968,016.74) and Matrix Energy Limited ($14,872,223.91).

    The report also showed the raw materials that the beneficiaries used the funds to import. Dana Motors Limited used its funds for import of Kia brand of vehicles in semi-knocked; Nigeria Breweries Plc for malt row winter specifications while for Dag Motorcycles Industries Nigeria Limited, they were used for  Bajaj vehicles spare parts import.

    The African Foundries Limited used its funds for the importation of industrial raw materials; Parco Enterprises Limited for the importation of hard wheat and  Seven-Up Bottling Company Limited, for the importation of 273 units of Pesi-Cola, the report showed.

    A-Z Petroleum Products Limited, Rahamaniya Oil & Gas Ltd, TempoGate Oil & Gas for gasoline import while for Biswal Limited, the funds were  used for Yaanmar engines import.

    HIS Nigeria Limited used its funds for telecom plant and equipment import while for IPI Power Tech it was for automatic board panel import. Promasidor Nigeria Limited procured Cowbell powder with its funds while for Matrix Energy Limited it was for unleaded gasoline import among others.

    The CBN said providing forex to the manufacturers and other key players in the economy was meant to enable it keep its promise to strengthen the real sector of the economy by ensuring that 60 per cent of available forex are used to procure industrial inputs, such as raw materials, machine spare-parts, telecom equipment, plastic raw materials, agricultural machines and pre-payment meters, amongst others.

    The CBN has also expressed its commitment to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage, are able to get LCs to import the required materials for their businesses.

    The exercise, the CBN insists, would provide a new lease of life in the manufacturing sub-sector, and also boost industrial output and employment. The regulator said it will continue to support and facilitate hitch-free procurement of necessary industrial inputs to sustain productive activities in the manufacturing sector.

    The gesture, it said, buttresses its commitment to rejuvenate and sustain industrial activities and retention of jobs.

  • Security agents raid black market forex dealers

    Security agents raid black market forex dealers

    Security agents raided the offices of black market currency dealers yesterday, detaining some dealers and ordering others to sell dollars at a lower rate in a bid to break the fall of the currency, dealers said.
    The Central Bank of Nigeria (CBN) has been unable to stop the naira’s slide on the black market, where importers go to buy dollars due to severe hard currency shortages. Nigeria has been hammered by a slump in prices for oil, a key source of revenue – in the form of dollars.
    The CBN has kept the official naira rate to the dollar artificially high, effectively driving hard currency dealing away from commercial lenders and towards the black market, the real benchmark.
    “The police and state security service officials are raiding black marketers in Lagos and Abuja to compel an appreciation of the naira,” Mallam Adamu, a bureau de change operator, told Reuters.
    Another trader said security agents visiting bureau de change operators told dealers not to sell dollars for more than N395. The Lagos police had no immediate comment.
    A source at the central bank declined to comment on the raids, saying only that the bank was concerned about the spread between the official and parallel market rate.
    The currency is changing hands at 460 naira per dollar on the black market, in contrast to the official rate of 305.5. The naira had regained some ground this week after dropping earlier from 470, but dealers said hard currency supplies were limited.
    “We’ve stopped buying dollars from just anybody that walks into our shop due to the harassment from security agents and a directive from our association,” said a dealer, asking not to be named.
    In June the central bank said it would float the naira but in reality it has reinstated a dollar peg at 305.5 via its daily interventions on the official market. The West African nation is in the middle of a recession as low oil prices have eroded public finances and hard currency reserves.
  • Emir Sanusi calls on Fed Govt to sell refineries, oil assets

    Emir Sanusi calls on Fed Govt to sell refineries, oil assets

    The Emir of Kano, Mohammed Sanusi II, on Wednesday joined several prominent Nigerians and industrialists calling on the Federal Government to sell out some national assets to enable the country wriggle out of recession.
    Speaking in Lagos, at the launch of the 2016 Banking Sector Report published by the Afrinvest West Africa Limited, Sanusi said one of the options available to government is to sell down some oil assets and the refineries to private sector operators that will pump dollar into the economy, so as to strengthen the Naira.
    He said: “One option is to sell down some assets, sell down some refineries in a manner that does not hurt your strategic interest. Sell down some oil assets, sell down some refineries, in a transparent manner that gives you value. You can also have options to buy them back later.”
    According to him, such steps would lead to increase in foreign exchange inflows into the economy, which is what the economy needs right now.
    He also urged government to create level playing field for both Nigerian and the foreign investors.
    “And do what I said which what are the kind of policies that will attract foreign investors. We have to get to a point when we welcome investors of all nationalities, who are willing to set up production plants here to turn our own raw materials into finished goods. Rwanda, Ethiopia have all done that very well.
    “There is nothing we are saying that haven’t been done by other African countries. We need to go into investment-driven model. China has grown into investment-driven model. Nigeria needs to move into in to investment-driven model,” he said.
    Speaking further, he said: “Any model that tries to chase away foreigners will not create jobs for the youth. We need to be an economy that creates opportunity for the youths. It also includes the independence of the Central Bank of Nigeria (CBN). I love the finance minister, but when the CBN said we are not reducing interest rate, I said, yes”. This, he explained was that the CBN should continue to protect its independence.
    Sanusi said Nigeria’s growth have over the years, been driven by rising commodity prices, and the rising domestic debt that went into consumption.
    “So, real wages basically kept increasing. In 2011, with oil prices at $110 per barrel, we were spending 80 per cent of government revenues on personnel cost. It was not sustainable, it was a problem I identified but no body listened. That model has reached the limit of its capacity. How much can you tax people to make up? There is a limit to what you can borrow. Now, we are spending 35 to 40 per cent of your revenues on debt services,” he said.
    “I think it is a positive thing, when the fiscal authorities and the many people in the private sector said they wanted a lower rate of interest rate. I was concerned that the CBN will succumb to pressure. And the fact that the CBN did not succumb to the pressure is a fact that it is beginning to claim its independence which is a very positive thing. And these are economic questions, you make choices. I can see why the CBN does not want to lower interest rate at this time.
    “If you lower Monetary Policy Rate (MPR) at 100 or 200 basis points today, it is not going to lead to rapid increase in credit growth. Its not. You will not see an increase in credit growth that will reverse downward trend in output by lowering MPR by 100 or 200 per cent. You would, however, further fuel inflation, and you will reduce the yield in fixed income at a time you are trying to attract foreign exchange,” he said.
    The Emir noted that the CBN got the decision right, adopting a flexible exchange rate, and secondly, tightening monetary policy.
    He therefore urged the CBN to fully allow the flexible exchange rate to work without interruption.
    “And these things really require courage, because some of the decisions you will take, will seem to fly in your face in the first week or two. But look at the fundamentals. The naira today is undervalued. The fixed income is suffering high yields. The Lagos Stock market, if you look at the assets prices picking ratios, you got a gross undervaluation. If you allow people to come in and sell their dollars at market prices, people see they are  going to make profits in the equities market and fixed income and also currency appreciation.
    “So, long as you do not allow that, you will not have the float you want. Now, it is the inflow of the dollars into the economy that will take the naira towards its fair value and take it to where you want it to be not by fiat. The market does not accept orders. It will never happen, it has never happened.
    “We need the CBN to take that risk, and courage to implement the flexible foreign exchange policy. Let the market work in the next two or three weeks and see, as people know they can come in, sell their dollars, buy stocks, sell their dollars, fixed income, make a profit in currency and capital acquisition, you are going to have gradually narrowing of the gap between the interbank and the parallel rate and have more liquidity in the market,” he said.
  • $40bn drained from external reserve in 10 years, says CBN

    $40bn drained from external reserve in 10 years, says CBN

    The Central Bank of Nigeria (CBN) has cried out that about $40 billion had been depleted from the nation’s external reserves in 10 years due to the taste for imported goods by Nigerians.

    To stem the hemorrhaging of the external reserve the CBN has strongly advocated for Nigerians to begin to process raw materials so as to get more value and earn more foreign exchange.

    According to the CBN governor Mr Godwin Emefiele, “exported raw materials such as crude, wood, cocoa amongst others whose end products are later imported, are being sold cheaply and bought back at more expensive rates” He said the level of the external reserve will be significantly beefed up if fuel which takes up 20 per cent of Nigeria’s import bill is locally produced.

    Defending the decision of the CBN to support the real sector, Emefiele said the apex bank “is convinced that the sector has sufficient employment capabilities, high growth potentials, contributes significantly in accretion to foreign reserves, expands the industrial base and diversify the growth potentials of the economy.”

    Emefiele noted that Nigerians “must, by now have been tired of hearing people talk about the potentials of Nigeria, now is the time to live that dream, we can achieve our goals and give Nigerians the chance to live longer, better and more fulfilled lives.”

    To make this possible, the CBN governor appealed “to Nigerians to patronize locally made products to encourage the manufacturers to remain in business, interventions by the bank are centered around agriculture, Micro, Small and Medium Enterprises (MSMEs) and Infrastructure intervention.”

    The CBN governor also disclosed that in order to make the real sector attractive to the banking industry, the apex bank has injected over N1.3 trillion into the sector.

    Speaking at the annual finance corespondent sand business editors seminar in Ibadan yesterday, the CBN Governor Mr Godwin Emefiele said the desire to revive and stimulate credit to the real sector was what informed the bank’s efforts to pump such huge amount of financial resources into the real sector.

    Represented by the by deputy governor, Corporate Services, Adebayo Adelabu Godwin Emefiele noted that by injecting funds and subsidizing rates, and through relevant policies, the CBN has assisted in growing the economy and promoting the growth of the different sectors of their economies.

    According to Emefiele, the interventions that culminated in the over N1.3 trillion support for the real sector include “the Agricultural Credit Guarantee Scheme Fund (ACGSF),the Commercial Agricultural Credit Scheme (CACS), the Agricultural Credit Support Scheme (ACSS), the N300 billion Real Sector Support Facility (RSSF), the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Small and Medium Enterprises Refinancing and Restructuring Facility (SMERRF), the N75 billion Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), the N213 billion Nigeria Electricity Market Stabilization Fund and only recently, the Anchor Borrowers’ Programme launched by President Muhammadu Buhari.”

    The CBN is also supporting the Nigeria Export Import Bank (NEXIM) with N50 billion export refinancing and restructuring facility as well as N500 billion as non-oil export stimulation facility. “If you add all these it is in excess of N1 trillion that have been deliberately injected into the system to ensure that they are fully resuscitated and they become attractive for commercial banks” Emefiele said.

    The CBN governor however stated that credit injection to the real sector was not intended “to crowd out the financial institutions in the space of credit delivery but to provide incentives that will stimulate lending at reasonable rates by banks to the real sector.” In addition, the reduction of the CRR of DMBs he noted “has freed almost all the resources that the banks can lend to finance projects under the real sector.”

    Reacting to recent criticisms that the CBN has gone beyond its mandate, the CBN Governor responded that “many central banks in emerging economies, in carrying out their primary mandate, go a step further in directly supporting different sectors of the economies of their respective countries.”

  • ‘Naira slide could trigger emergency MPC meeting’

    ‘Naira slide could trigger emergency MPC meeting’

    The naira which has come under undue pressure in recent months over the sharp fall in Brent oil prices, may cause the Monetary Policy Committee (MPC) to convene an emergency meeting, analysts have predicted.

    Currencies Analyst at Ecobank Nigeria, Olakunle Ezun, said should the naira weaken in the interbank market to N170 or more, and oil prices drop below $80 per barrel, an emergency MPC meeting could raise the Monitory Policy Rate by 50 to 100 basis points and increase the Cash Reserve Ratio (CRR).

    This, he said, would undermine the naira, given that hydrocarbons account for 98 per cent of export revenues and around 75 per cent of fiscal revenues.

    Ezun explained that without a large cushion of foreign exchange reserves, the CBN, would remain under pressure from the fall in oil prices to tighten policy as a means of underpinning the naira.

    “Yields on government securities rose steadily around 100 to 150 basis points since early October. It is clear that a tightening cycle is developing, with a strong possibility of further direct tightening,” he said.

    The analyst explained that the Monetary Policy Rate (MPR), the benchmark lending rate for banks, could remain above 12 per cent for the weeks ahead, with the possibility of indirect tightening at the next MPC meeting.

    “CBN would likely decide to tighten policy in its next meeting. Although a rise in the MPR is currently unlikely, tightening could be made by raising the Cash Reserve Requirement (CRR) on private sector deposits. Currently it stands at 15 per cent (it was last raised from 12 per cent in March),” he said.

    He explained that another risk facing the CBN is the possibility of increased government spending in the run-up to the February 2015 election.

    “Any injection of liquidity above target would undermine macroeconomic stability by pushing inflation up above the most recent level of 8.3 per cent in September (inflation has been largely stable around this level for more than one year. The CBN considers the inflation outlook is good with single digit inflation likely by yearend,” he predicted.

    He said the tight monetary policy stance was adopted in order to ensure exchange rate stability (given the managed float exchange rate regime), and help contain inflationary pressures. Indirectly, the tight policy has helped underpin real returns on fixed income securities investments by attracting foreign investors into naira denominated assets, thereby helping strengthen demand for the naira.

    However, demand for Federal Government bonds issued across all maturities remains strong. Increased supply of securities would help temper some of the high levels of oversubscription, however, demand remains strong despite uncertainties related to inflation, exchange rate risk, and the macroeconomic policy environment.

    The authorities, he said, have continued to stimulate interest via liquidity management and indirect monetary tightening to boost confidence in the market and at the same time provide forward guidance on monetary policy directions, which has helped realign the yield curve with monetary policy expectations.

    Meanwhile, the CBN has pledged to keep supporting its currency after the naira approached a record low amid declining oil prices and the end of US monetary stimulus that bolstered emerging-market assets.

    “We will continue to defend the naira,” CBN Deputy Governor, Economic Policy, Dr. Sarah Alade said. Since mid-September, the CBN has used the reserves to sell dollars outside of regular auctions held Mondays and Wednesdays, according to Standard Chartered Plc.

    It will keep using the auctions and direct dollar sales to banks to preserve the value of the currency, Alade said. The currency strengthened 0.2 per cent to 164.90 per dollar. It earlier weakened as much as 0.8 per cent to 166.42, a record low on a closing basis.

  • The Nation reporter is Business Writer of the Year

    The Nation reporter is Business Writer of the Year

    A senior correspondent with The Nation, Mr. Collins Nweze, has been declared the winner of the eighth edition of the Nigeria Media Nite-Out Award in Lagos at the weekend.

    Nweze won in the ‘Business Writer of The Year’ category.

    He beat Stanley Opara, Punch; Chukwu Onaeke, The Guardian; Kehinde Ibrahim, Nigeria Pilot and Maduka Nweke, The Sun to clinch the award.

    Mercy Michael, Leke Salaudeen and Kunle Akinrinade, all of The Nation, were also nominated in the Entertainment Writer of The Year, Political Writer of The Year and Crime Writer of The Year categories.

    Winners in other categories include Samson Folarin of Puch who won the Crime Writer of The Year; Segun Koiki from National Mirror won in the Brand Writer of The Year category while Ajibade Alabi of Daily Newswatch was won in the Entertainment Writer of The Year category.

    The Media Nite-Out Award is given to journalists in recognition of their contributions to the media industry and economic advancement of the nation.

    The guest speaker, Omoba Segun Adewale, who is a senatorial aspirant Ogun West Senatorial District, spoke on the theme: The Role of Journalism in the Promotion of Democracy, Individual Rights and Civil Liberty in Nigeria.

    Nweze is the winner of the 2012 Nigerian Media Merit Awards (NMMA), UBA Money Market Reporter of the Year category. He was also the first runner up in the Citi Journalistic Excellence Award 2013 organised by Citi International Bank.