The Nation Newspaper

Tag: Dollar

  • CBN officials suspended over multi-million dollar fraud

    CBN officials suspended over multi-million dollar fraud

    The Federal Government has placed some very senior officials of the Central Bank of Nigeria (CBN) on suspension for fraud running into hundreds of millions of dollars.

    The Nation gathered that President Muhammadu Buhari has authorised the suspension of the CBN workers,  including a deputy governor and three directors.

    A Presidency source said  the Deputy Governor was appointed by former President Goodluck Jonathan and “he was indicted in an ongoing fraud investigation amounting to about $400 million.”

    The Presidency official however refused to state the nature of the fraud for fear that further disclosure might reveal the identity of the affected Deputy Governor and directors of the CBN.

    However, a statement from the CBN last night confirmed that “a highly sophisticated plot to defraud the CBN by some criminally minded elements has been uncovered and aborted by the bank.”

    The statement signed by the bank’s Acting Director, Corporate Communications, Isaac Okorafor, said the apex bank suspended the unnamed workers to enable the bank investigate their involvement in the fraud.

    “A highly sophisticated plot to defraud the CBN by some criminally minded elements has been uncovered and aborted by the bank. Although preliminary investigations so far have not revealed any accomplices within the CBN, management has decided to place all key personnel involved in the transaction on suspension. This is to ensure a full and unfettered investigation,” the statement explained. The statement added that the matter had been reported to relevant authorities while the apex bank assured the general public that the security of the bank remained intact.

  • CBN targets N200 per dollar parallel market rate

    CBN targets N200 per dollar parallel market rate

    The Central Bank of Nigeria (CBN) is targeting a N200 to dollar exchange rate in the parallel market, The Nation has learnt.

    The naira which yesterday traded at N330 to dollar in the parallel market is expected to appreciate speedily, as the impact of the CBN’s measures to stabilise the currency volatility in the parallel market begin to materialise. President, Association of Bureau De Change Operators of Nigeria (ABCON) said the N330 rate in the parallel market is an improvement from last week’s rate when the naira exchanged for N391 to dollar.

    The strident calls by the IMF and some foreign interest for Nigeria to devalue its currency and the artificial spike in Forex rate created by Bureau De Change operators appears to have tanked. This has been linked to a complex and integrated currency management approaches deployed by the Central Bank of Nigeria (CBN).

    According to a top source in the apex Bank, “The aim of CBN is to ensure that the divergence between the official and parallel rate does not exceed N3, so we are looking at a parallel market rate of N200/$ because the downward trend in the pressure on the naira will be sustained.

    “The CBN has the capacity to sustain the downward pressure and will deploy further currency management initiatives, while capitalising on fiscal policies of the federal government to remain in support of non-devaluation of the Naira. The current stand of the federal government on Nigeria’s legal tender is Non-Devaluation. It will be unwise for anybody to be hoarding dollars because we can assure you that naira appreciation is going to trend upwards going forward.”

    So far, the CBN in a bid to manage the pressure on supply has deployed over $11.7billion to support Agricultural Sector, SMEs, manufacturers and others. This has reduced patronage of black market by end-users and has forced rent seekers to dump the greenback thereby creating a dollar-glut in the black-market.

    The source noted that it has been observed that most of the imports that were draining forex resources have since found local substitutes with attendant savings in forex and shortage of demand for the greenback, which was fuelling the pressure, this is also coming on the heels of the CBN instruction to commercial banks to publish allocation of forex to end-users. This has in recent times ensured that the real sector of the economy and genuine users for education and medicals have been able to access Forex at official rate.

    Industry analysts have also described the development as a game changer for majority of local manufacturers in Nigeria. The manufacturers acknowledged that the impact of CBN policy on forex since, its inception has more than doubled their productive capacity, with attendant benefits in terms of expansion to meet increasingly higher demands for their products and services.

    The Analysts said, “Conveniently, since the CBN foreign exchange policy came into existence, production capacity by local manufacturers has increased from 50 per cent to 70 per cent. This has impacted on their propensity to increase exports with higher volumes which is expected to also earn Nigeria commensurate higher foreign exchange earnings.”

    Speaking further, the analysts are of the opinion that the policy has helped the local manufacturers to realise the urgent need to expand because of increasing demands for their products.

  • Naira sinks further at N391 to dollar

    Naira sinks further at N391 to dollar

    The currency volatility in the unofficial market yesterday pushed the naira to dollar exchange rate to N391. Head Treasury at Ecobank Nigeria, Olakunle Ezun, who spoke to the correspondent, confirmed the naira rate to dollar. He said the local currency is facing a volcanic volatility against the greenback and the trend may likely persist.

    The naira had yesterday exchanged at N372 to dollar on Wednesday, an indication that it is losing an average of N20 per day as importers scramble for the greenback.

    President, Association of Bureau De Change of Nigeria (ABCON) Aminu Gwadabe said the importers are busy mopping up any dollar they can find because they are unsure of what will happen the next day.

    He said the Central Bank of Nigeria (CBN’s) decision not to sell dollar to the bureaux de change (BDC) operators has created the ongoing panic in the market. He said the CBN is even rationing dollar for manufacturers and others that legitimately need the greenback to fund their operations.

    Gwadabe said his group is discouraging BDCs from buying or selling at the current rate because it does not add value to the economy.

    “We have supported the government and will keep doing so. So, we have advised members of ABCON not to buy at current rates,” he said.

    “In my own view, the central bank should address the supply side of the market by allowing oil companies and banks to sell dollar to bureau de change operators as an immediate measure to reduce pressure on the naira,” Gwadabe.

    CBN Director of Communications, Ibrahim Mu’azu said the rate is speculative “Ask the BDCs the volume of dollar they have sold at this rate and you find out the truth. These rates are not realistic rates,” he said. He said the CBN has been meeting all legitimate demands for foreign exchange and will keep doing so in the interest of the economy. “It does not look like a price that is backed by demand,” he said.

    Tumbling global oil prices have battered Nigeria’s crude exporter, with foreign exchange reserves down to an 11-year low at $27.85 billion by February 11. Government is concerned that further depreciation will hurt poor Nigerians, but the bank’s refusal to revise the pegged exchange rate has widened a chasm between official rates and the parallel market.

  • Naira exchanges at N318 to dollar in parallel market

    Naira exchanges at N318 to dollar in parallel market

    The naira volatility against the dollar continued yesterday with the local currency dropping to N318 against the greenback.

    The naira fell on the parallel market on strong demand for dollars from importers amid dwindling liquidity, while stock index climbed to 24,000 points for the first time in almost a month.

    The local currency had closed at N312 the previous day. At the official interbank window the naira was stable around 197.

    “We have demand coming from importers paying for their due obligations, while dollar supply has dried up,” President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe.

    He said the economy has been under pressure on the back of falling global oil price, with Nigeria’s foreign exchange reserves down to a more than 11-year low.

    CBN Governor, Godwin Emefiele has continued to insist on exchange rate stability and believes in defending the naira at all cost. For him, the apex bank is committed to safeguarding the value of the naira and has instituted various policies to achieve the objective.

    He said the devaluation advocates forget that the local currency owes its stability or otherwise on various factors, chief of which is the price of crude oil in the international market.

    Managing Director, Afrinvest West Africa Plc, Ike Chioke, said a strong positive correlation exists between the exchange rate and crude oil price.

    Nigeria’s crude oil – Bonny Light, which traded at $110.2 per barrel in January, last year, hitting $114.6 per barrel by June same year, is now trading below $35 per barrel.

    Chioke said Nigeria’s dependence on crude oil (currently 70 per cent of total foreign exchange earnings) makes economic growth susceptible to price shocks.

    The naira was devalued in November 2014 during the Monetary Policy Committee (MPC) meeting. The midpoint of the official window of the foreign exchange market was moved from N155/dollar to N168/dollar. The committee also widened the band around the midpoint by 200 basis points from plus or minus three per cent to plus or minus five per cent.

  • Naira strengthens against dollar at parallel market

    Naira strengthens against dollar at parallel market

    The Naira on Monday slightly strengthened against the dollar at the parallel market, in spite of scarcity of the U.S. dollar.

    The Naira gained one point to exchange at N305 from N306 it exchanged previously.

    At the official market, the Nigerian currency closed at N197 to the dollar.

    Traders in the parallel market, however, noted that the naira had remained stable, exchanging between N305 and N306 to the dollar.

  • Naira exchanges N300 to dollar

    Naira exchanges N300 to dollar

    Naira volatility worsened yesterday, after the Central Bank of Nigeria (CBN) stopped the sale of foreign exchange (forex) to Bureaux De Change (BDCs). The local currency exchanged in the parallel market for N300 to a dollar in Kano; N295 in Abuja and N290  in Lagos.

    President, Bureaux De Change Association of Nigeria (ABCON) Aminu Gwadabe, who confirmed the development, expects the situation to get worse in the coming days. He said his group will continue to engage the CBN on the need to reverse the policy, which “will continue to hurt the economy”.

    But CBN spokesman, Ibrahim Mu’azu said the market reaction was expected becauses greedy dealers are taking advantage of the policy shift. He said the naira strenght should not be assessed through the parallel market.

    CBN Governor Godwin Emefiele had announced a new forex policy that includes the stoppage of weekly dollar sale to BDCs.

    He flayed the BDCs for abandoning the original objective for their establishment, which was to serve retail-end-users, who need $5,000 or less. The operators, he noted, have become wholesale dealers in forex to the tune of millions of dollars per transaction, only to come up with fake documentations such as passport numbers, Bank Verification Numbers (BVN), boarding passes and flight tickets to render weekly returns to the CBN.

     

    “The bank (CBN) would henceforth discontinue its sale of foreign exchange to BDCs. Operators in this segment of the market would now need to source their foreign exchange from autonomous source. They must however note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws,” Emefiele said at news conference on the review of the forex policy at CBN’s Abuja head office.

     

    The apex bank took some measures on forex following a drop in oil prices from a peak of $114 barrel in July 2014 to as low as $33/barrel this month. The reserves have also suffered great pressure from speculative attacks, round-tripping and front loading activities by actors in the forex market.

    Before the hammer fell, the CBN was selling $60,000 to each BDC weekly, translating to $167 million per weekly and about $8.6 billion yearly.

    The amount was reduced to $10,000 per BDC, translating into $28.4 million depletion of the foreign reserve per week and $1.476 billion per annum.

     

  • Naira weakens against dollar at parallel market

    Naira weakens against dollar at parallel market

    The Naira on Monday depreciated by 0.8 per cent to exchange at N265 to the dollar at the parallel market.

    The News Agency of Nigeria (NAN) reports that the greenback lost N2 to the dollar from its weekend value of N263.

    However, at the official interbank window, the Naira exchanged at N197 to the dollar.

    Traders at the market were hopeful that the Naira would rebound in 2016 if the apex bank continued to enforce its policies at the foreign exchange market.

    Besides, the price of crude oil at the international market hedged up to 38.9 dollars per barrel from about 35.7 dollars per barrel at the weekend.

    Oil prices rose on Monday after a breakdown in diplomatic ties between Saudi Arabia and Iran that some speculated could result in supply restrictions.

    Saudi Arabia, the world’s biggest oil exporter, cut diplomatic ties with Iran on Sunday in response to the storming of its embassy in Tehran following Riyadh’s execution of a prominent Shi’ite cleric on Saturday.

  • Naira strengthens against dollar at parallel market

    Naira strengthens against dollar at parallel market

    The naira on Wednesday strengthened against the dollar as currency speculators feared that the apex bank might come up with policies that might be unfavourable to them in 2016.

    The News Agency of Nigeria (NAN) reports that the naira gained N1, an appreciation of 0.4 per cent, to exchange at N226 to the dollar as against its previous value of N227.

    However, at the official inter-bank window, the naira continued to exchange at N197 to the dollar just as available apex bank’s record puts the price of crude oil at 36.09 dollars.

    Traders at the parallel market told NAN that the appreciation was fuelled by currency speculators.

    They envisaged that the apex bank might come up with policies that would affect them negatively in the New Year.

  • Naira falls to N253 on dollar shortage

    Naira falls to N253 on dollar shortage

    The naira yesterday weakened further in the parallel market, coming down 0.59 per cent to N253 to dollar after the Central Bank of Nigeria (CBN)’s exclusion of some bureaux de change operators from its dollar sale on Wednesday, which  created a shortage of dollars.

    The local currency was quoted at an unofficial 253 to the dollar, down from 251.5 at the previous day’s close. The local currency was trading at 198.97 to the dollar on the official interbank market, close to a rate at which it has been pegged since February.

    The CBN had sold $30.5 million to 1,017 bureaux de change agents on Wednesday, but excluded about 1,801 others from its weekly sale. That led to a shortage of dollars on the unofficial market and pushed the naira lower, said Aminu Gwadabe, president of Nigeria’s bureau de change association.

    “We are in contact with the Central Bank to resolve issues around the exclusion of some of our members from the forex sales and we are expecting positive response,” Gwadabe said.

    A bureau de change operator,  Michael Odoh, said: “The Central Bank has reduced the amount of dollar sold to bureaux de change at its twice-weekly intervention, which has also been cut to once a week now.”

    He said the reduction in volume of dollar sales by the apex bank coupled with year-end surge in demand for foreign currencies by importers, have impacted negatively on the naira. The naira fall was intensified after the CBN mandated BDC operators to get Bank Verification Numbers (BVNs) of customers buying foreign exchange. The policy implementation, which started on November 1, has reduced the volume of dollars sold by BDCs and created dollar scarcity in the market.

    However, the CBN has been able to keep a grip on the local currency movement on the interbank market.

    The apex bank has insisted that the adoption of BVN as a condition for forex purchase is expected to reduce the incidence of multiple purchases, round tripping and illicit transfer of funds, facilitate enforcement of authorised limits of forex sales to  end users, sanitise the retail segment of the market and engender policies that will facilitate better allocation of the forex, based on genuine demands.

    It insisted that the BVN provides the unique identity of each customer for the purpose of achieving effective “Know Your Customer” (KYC) principle and fraud prevention.

  • Naira strengthens against dollar at parallel market

    Naira strengthens against dollar at parallel market

    The Naira on Wednesday strengthened against the dollar as it traded for N240 at the parallel market.

    It gained N1 on Wednesday afternoon to exchange for N240 to the dollar, as against N241, its previous rate.

    Meanwhile, its rate at the interbank window remained at N197 to the dollar.

    Traders at the market were optimistic that the sale of forex by the apex bank would boost activities at the market.

    The News Agency of Nigeria (NAN) reports that the Central Bank of Nigeria on Tuesday frowned at the continued patronage of forex traders at the parallel market.

    Mr Godwin Emefiele, the CBN Governor, stated this while answering questions from newsmen at the end of the Monetary Policy Committee Meeting in Abuja.

    He urged genuine forex buyers to use the Bureaux de Change (BDCs) and other authorised sources for forex, adding that their rates were far better than what was obtained at the parallel market.