The Nation Newspaper

Tag: Foreign currency

  • Buhari, EFCC worry over influx of foreign currency

    •Anti-graft body: fake dollar notes in circulation

    THERE are fake dollar notes in circulation, the Economic and Financial Crimes Commission (EFCC) warned yesterday.

    The anti-graft agency raised the alarm a day after President Muhammadu Buhari expressed concern over the influx of the foreign currencies, especially in the build-up to the elections.

    Buhari had at the weekly Federal Executive Council (FEC) in Abuja on Wednesday alleged that some politicians have flooded the country with foreign currency to influence the elections.

    The rescheduled polls begin tomorrow with the presidential/National Assembly elections. The Governorship/State Assembly and the Federal Capital City (FCT) elections are billed for March 9.

    EFCC spokesman Tony Orilade warned Nigerians to be wary of fake dollars, in a statement yesterday.

    Orilade said the agency issued the warning following the intelligence gathered in the build-up to the elections.

    According to him, the anti-graft agency has urged Bureaux de Change operators to be cautious.

    The statement reads: “The Economic and Financial Crimes Commission (EFCC) has raised the alarm over the circulation of fake dollar notes ahead of Saturday’s presidential and National Assembly elections.

    “In a statement personally signed by the Acting Chairman of the Commission, Ibrahim Magu, the agency stated that the warning follows intelligence gathered in the build-up to the elections.

    “The intelligence indicates that the Dollar notes have features of genuineness, but forensic analysis by the Commission reveals otherwise.

    “We, therefore, warn the BDC operators to be cautious in their transactions from now till the end of the elections.”

    Also in a statement, the Senior Special Assistant on Media and Publicity, Garba Shehu, said the President accused some politicians of flouting money laundering regulations in their desperate bid to capture political power.

    He added that the President, however, praised the EFCC for successfully tracking the money in “millions of United States (U.S.) dollars”.

    “The EFCC success followed the presidential directive to investigative agencies to probe a number of high profile cases,” the President was quoted as saying.

    Reassuring the nation of his administration’s determination to wage a relentless war against money laundering and terrorism financing, the President urged Nigerians, especially politicians, to place the interest of the country above theirs.

  • Polls: Buhari raises alarm over influx of foreign currency

    President Muhammadu Buhari has expressed astonishment at the huge amount of foreign currency flooding the country intended to influence the general elections beginning on Saturday.

    He spoke during the Federal Executive Council (FEC) meeting in Abuja on Wednesday.

    The President, in a statement by the Senior Special Assistant on Media and publicity, Garba Shehu, issued on Thursday, accused some politicians of flouting money laundering regulations in their desperate bid to capture political power.

    President Buhari, however, commended the Economic and Financial Crimes Commission (EFCC) for successfully tracking the money in “millions of United States dollars.”

    Read Also: ‘Why Buhari gave directive on ballot box snatching’

    “The EFCC success followed the presidential directive to investigative agencies to probe a number of high profile cases.”

    Reassuring the nation of his administration’s determination to wage a relentless war against money laundering and terrorist financing, the President again appealed to Nigerians, especially politicians to place the interest of the country above all others, as they troop out to cast their votes in the coming elections.

  • Banks review foreign currency holdings

    Commercial banks are revaluing their foreign currency holdings and paying off debts ahead of timeline as dollar liquidity improves, The Nation has learnt.

    The improvement seen in foreign reserves at $47 billion, regular Central Bank of Nigeria (CBN) foreign exchange interventions, over $51 billion in Investors’ & Exporters’ Forex Window and other foreign capital inflows have all helped to boost banks’ dollar positions and strengthened investors’ confidence in the economy.

    First Bank Nigeria Limited redeemed a $300 million Eurobond before maturity and paid all bondholders. The seven-year bond was issued in 2013 at 8.25 per cent and had been due to be repaid in 2020. The bank announced its intention last month to repay the debt before maturity. It said the redemption had no impact on its capital ratios and that it had built up dollar liquidity over the past year.

    The bank said it did not plan to issue another Eurobond in the near term, because it had ample liquidity to meet its foreign and local currency funding needs.

    Also, a report by Exotic Capital, emerging market investment bank, on GTBank showed the lender enjoys “robust net long dollar position”, which should continue to provide a natural hedge to further exchange rate adjustments.

    The bank’s non-interest revenue for the second quarter of 2018 was boosted by strong foreign exchange trading gains, including N6 billion in forex trading gains compared with N21 million loss in second quarter of 2017 when forex crisis was intense. This, in addition to notable increases in dividend income/recoveries, net fee income and foreign currency revaluation gains put the lender in good position.

    The CBN, in the communique released after the last Monetary Policy Committee (MPC) meeting, acknowledged the progress made in recent times in stabilizing the foreign exchange market and anchoring inflation expectation lower.

    It said supportive external account condition – stable oil prices, rising current account surplus and external reserves – which empirical studies have emphasised to be the major anchor of monetary policy all point to improvement in the foreign currency positions for the economy and banks.

    Nigerian banks cut lending last year due to weak economic growth and foreign currency risk. However, several of them are eyeing loan growth this year, citing economic improvements and especially as the CBN introduces liquidity to the banking sector targeting credit to manufacturers.

    The foreign exchange reserves currently at $47 billion have continued to ensure that the naira remains stable at the official and parallel markets.

    The naira exchanges at N361 to dollar in the parallel market and N305.6 in the official market, and has remained at that rate since April, last year after the CBN resumed foreign exchange interventions in the market.

    The Exotic Capital report said although the level of reserves was still significantly below the record high of $64 billion recorded in August 2008, it is nearly double the low of $24 billion recorded in October 2016, increasing by more than $22 billion in a mere 15 months.

    “We have written extensively on Nigeria’s multiple exchange rate system and will abstain from further discussion at present, suffice to say that a fairly valued naira at N360 to dollar combined with high domestic rates has led to a tremendous increase in the level of gross foreign reserves held at the CBN,” it said.

    “With reserves at their current levels, it is easy to imagine the MPC being in a position where it could afford to cut as it is less dependent on attracting dollar inflows than it has been to both build reserves and stabilise the naira,” it said.

    A similar report by FBN Capital, titled: “Towards the $50 billion threshold, and counting”, said the rapid accumulation of $15.96 billion over 12 months is due to two sizeable Eurobond launches, a small diaspora bond issue, the recovery in oil export revenues (through the Nigeria National Petroleum Corporation’s share of production and, more recently, the steady bid by the CBN at the I&E Forex window.

    “We should stress that the data are gross and mask the swap transactions the CBN has entered into with local banks. The steady bid by the CBN has been seen variously as a response to the softening of demand for forex by importers and other economic actors, and as a move to contain naira appreciation,” the FBN Capital said.

  • 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.

  • Airport security arrests cleaner with $271,135 

    Aviation Security personnel of the Federal Airports Authority of Nigeria  (FAAN) on Thursday  prevented the trafficking of $271,135 through the Murtala Muhammed International Airport, Ikeja.

    The Deputy General Manager Public Affairs FAAN, Mr Nnaekpe Onyekwere disclosed this saying the huge amount was found on a worker with one of the cleaning contractors at the airport, Mr. Tijani Owolabi, during a comprehensive screening at one of the screening points at ‘D’ Finger of the international terminal.

    Some of the foreign currency was found on Owolabi while the rest was recovered from the sanitary bucket he was trying to pass through screening.

    The airport cleaner who was suspected to be conveying the foreign currency to an accomplice at the sterile area of the terminal was immediately apprehended by Aviation Security staff on duty and handed over to the appropriate security agencies at the airport for further investigation.