The Nation Newspaper

Tag: forex

Naira to appreciate further as CBN boosts forex sale

The Naira is set to appreciate further this week as the Central Bank of Nigeria (CBN) plans to inject more Foreign Exchange (Forex) into the market to meet the requests of genuine customers.

CBN spokesman Isaac Okorafor, gave the assurance yesterday.

The News Agency of Nigeria (NAN) reports that the apex bank had so far kept to its promise of continuing to supply enough forex to guarantee liquidity in the market.

Okorafor said the bank was committed to ensuring that authorised dealers got sufficient supply to meet the demands of authentic customers of banks.

He adde that the bank had since February offered over one billion dollars to the interbank market, and expressed optimism that stability had been restored to the forex market.

He said individuals could easily access forex to address personal and business allowances.

A summary of the CBN intervention in the interbank market over the past two months showed that the highest bid rate was N360 per dollars, while the lowest was N315 per dollar.

March 20, 2017
Forex: CBN receives bid for $100m

The Central Bank of Nigeria (CBN) says it has received bids for foreign exchange (forex) of about 100 million dollars from authorised dealers in the interbank market to meet the requests of genuine customers.

The acting Director, CBN Mr Isaac Okorafor, in a statement on Thursday in Abuja, said that the sales would be settled on Friday.

He said that no intervention was made by the apex bank to meet requests for invisibles on Thursday.

Okorafor reiterated that the CBN would continue to make necessary interventions in the interbank market to meet all legitimate transaction-based foreign exchange demands by customers.

It will be recalled that the Bank in its last auction sale on Wednesday, offered 150 million dollars to the interbank market with the highest bid rate at N335 to a dollar, while the marginal rate was N320 to a dollar.

Meanwhile, the Naira continues to firm up against the dollar at the parallel market.

The Naira today traded at N448 to dollar as against N450 it traded on Wednesday and N452 on Tuesday.

The Naira has also appreciated against the Pound Sterling, trading at N530 as against N540. It also traded at N465 to the Euro as against Wednesday rate of N475.

At the Bureau De Change (BDC) window, the Naira continues to trade for N399 to a dollar, while a Pound Sterling and Euro changes for N580 and N525, respectively.

The Nigerian currency also traded at N306.2 at the interbank market

March 16, 2017
CBN boosts forex supply with $195m

The Central Bank of Nigeria (CBN) on Tuesday sustained the supply of foreign exchange to the market by releasing 195 million dollars.

The CBN acting Director, Corporate Communications, Mr Isaac Okorafor, who gave a breakdown of the release, said of the amount 150 million dollars was released through wholesale auction.

He said that the remaining 45 million dollars was for medicals, tuition, Personal and Business Travel Allowance.

Okorafor said that the Bank acted promptly and proactively in line with its promise to keep the market liquid enough to meet the needs of genuine requests.

He said that banks were becoming saturated with foreign exchange, as most of them were now able to meet demands for foreign exchange within the stipulated time frame.

“As you can see, all the pent-up demand for invisibles have been met to the extent that banks are urging customers to come and obtain forex,” he said.

Okorafor reiterated the bank’s determination to continue to fund the importation of raw materials, plants and machinery for manufacturing, agriculture, and other eligible items.

He also assured that the apex bank remained resolute in ensuring stability in the forex market by keeping an eye on the activities of authorised dealers in order to ensure sharp practices were reduced to the barest minimum.

It will be recalled that the CBN had in the past two weeks pumped over 1.2 billion dollars into the foreign exchange market to stem liquidity challenges faced by businesses and individuals.

Last week, the regulator pumped 170 million dollars into the foreign exchange market, as foreign reserves hit 30 billion dollars.

Meanwhile the Naira continues to firm up against the dollar at the parallel market. The Naira today traded at N452 to a dollar as against N455 on Monday.

Compared to Monday’s sales, the Naira has also appreciated against the Pound Sterling, trading at N540, while it fell against the Euro trading at N475 compared to the N470 it sold for on Monday.

At the Bureau De Change (BDC) window, the Naira continues to trade for N399 to a dollar, while a Pound Sterling and Euro changes for N580 and N525, respectively.

The Nigerian currency also traded at N306 at the interbank window

March 14, 2017
Naira appreciates in all segments of FOREX Market

The Naira on Monday appreciated in all the major segments of the foreign exchange market, the News Agency of Nigeria (NAN) reports.

The Nigerian currency gained three points to exchange at N460, from N463 posted on Friday, while the Pound Sterling and the Euro closed at N550 and 476, respectively.

At the Bureau De Change (BDC) window, the Naira was sold at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro traded at N547 and N482, respectively.

Trading on the floor of the interbank market saw the Naira closed at N306.00 to a dollar.

Traders at the market expressed delight in the interventions the CBN had made so far in boosting liquidity, adding that its sustenance would turn the economy around in the short to medium term.

Meanwhile, Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), said the association was expecting an increment in dollar sales to its members this week.

Gwadabe said that due to the stability in the oil sector and the increase in the price of oil at the international market, the CBN was now comfortable in entertaining ABCON’s request to increase the volume of dollar sales to its members.

The ABCON boss said that a boost in its weekly volume from 8,000 dollars weekly to 15,000 dollars would sustain the existing efforts in stabilising the Naira exchange rate at the FOREX market.

“We expect that the CBN will increase the weekly dollar sales to about 3200 registered BDC’s nationwide this week.

“This development will help to crash the high exchange rate at the parallel market, thereby stabilising the market that segment of the market.

“The CBN is also collaborating with ABCON to reduce the hiccups encountered by ABCON members in filling their returns to the apex bank,’’ Gwadabe said.

The financial expert added that the Naira was expected to extend appreciation across the major segments of the FOREX market this week.

NAN also reports that since the CBN began intervening at the FOREX market, it had spent an excess of 1.4 billion dollars in boosting liquidity at the market.

Some concerned Nigerians have hailed the effort of the CBN in boosting liquidity at the FOREX market, but added that the liquidity boost had not yet translated to the reduction in the price of goods and services in the country.

March 13, 2017
Association laments effect of FOREX scarcity on telecom sector

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has lamented that the scarcity of FOREX is biting hard on the telecommunications sector.

ALTON Chairman, Mr Gbenga Adebayo said on Monday in a statement in Lagos that the exemption of telecommunications from items to be accorded priority in the allocation of FOREX by the banks had adversely impacted on the industry.

Adebayo said that the scarcity of FOREX had increased the operating cost of providing services in the industry.

He said that in the absence of local substitutes for its plant and machinery, the service providers were constrained to source FOREX from interbank market at higher rates.

According to him, the rates are higher compared to sectors like manufacturing, aviation and agriculture accorded priority in FOREX allocation at reduced rates by the Central Bank of Nigeria (CBN).

“Owing to the prevailing economic situation in the country, ALTON members cannot transfer the increased cost burden to the consumers, thereby contracting profitability and ability to make further investment to drive growth in the industry,’’ Adebayo said.

He said that the prevailing scarcity of FOREX had created unfavourable credit terms, making it very challenging for ALTON members to honour their obligations to foreign vendors as at when due.

Adebayo said that this had occasioned delayed payment to equipment suppliers and other foreign vendors who had now resorted to imposing unfavourable payment terms on service providers in Nigeria.

He said that some of the foreign vendors had issued `Notice of Disconnection of Service’ which could disrupt service availability with attendant impact on customers’ experience.

“This further underscores the need for an urgent action to be taken toward addressing the lingering scarcity of FOREX facing the industry,’’ the chairman said.

He said that the FOREX problem had led to delayed implementation of Network Enhancement and Improvement Initiatives.

According to him, ALTON members made commitments intended to ensure the implementation of National Quality of Service (QoS) Fixing Project.

Adebayo said that the project was a coordinated network investment plan supervised by the Nigerian Communications Commission (NCC) at designated locations nationwide over a period of time by the operators to ensure improved QoS.

He said that the continuity of this initiative was dependent on obtaining FOREX to import equipment required to carry out the intended National QoS Fixing Project.

According to him, if proactive measures are not taken to ensure easy access to FOREX, the project is likely to be adversely impacted, to the detriment of the citizenry and economy.

He said that if the issue of FOREX scarcity was not addressed, it was bound to affect the National Broadband Plan.

“The government in 2013 published a National Broadband Plan (2013 to 2018) intended to ensure the deployment of pervasive and ubiquitous broadband infrastructure nationwide.

“The plan is to facilitate the realisation of a fivefold increase in broadband penetration from six per cent as at 2012 to 30 per cent by 2018.

“On this note, the commission divided the country into seven zones and has licensed two Infrastructure Companies (InfraCos) for Lagos and North Central Zones to deploy metro fibre optic network.

“The commission recently published a notice on the commencement of the process for the licensing of remaining five InfraCos on Open Access Model for the deployment of optic fibre infrastructure broadband network in the other zones.

“The zones are the North East, North West, South South, South East and the South West of the country,’’ the ALTON chairman said.

According to him, it appears that the prevailing scarcity of FOREX has adversely impacted the deployment of metro fibre network, as the earlier licensed InfraCos are yet to make significant progress in their respective licensed locations.

He said that there was the need for strategic support to service providers by ensuring easy access to FOREX to import required equipment and undertake the pending projects.

Adebayo said that the support would ensure that operators fulfilled outstanding obligations to foreign vendors without further delay for the continued growth and development of the industry.

March 13, 2017
Banks seek buyers as CBN floods market with forex

Banks are awash with dollars, as the Central Bank of Nigeria (CBN) continues to support the naira.

The banks have cleared the backlog of requests for foreign currencies for basic travel allowance, school fees and medicals.

A banker told NAN that his bank had so much dollars that its marketers were asked to encourage customers to request for the greenback.

The source said that the bank wanted to avoid a situation where it would be forced to return excess Forex to the CBN.

Doing so would force the CBN to reduce the quantity of Forex sold to the bank.

Another source from First Bank said following the CBN intervention, the bank had succeeded in clearing all pending requests for Forex as far back as September, 2016.

Also, a source in Guaranty Trust Bank commended the decision of the CBN to flood the market with Forex, thereby allowing the banks to meet legitimate requests from its customers.

It was also gathered from Heritage Bank that prior to now, the bank published the names of individuals and companies it disbursed forex to in a page of any particular newspaper.

“Right now, we take two or three pages in the newspaper to publish names of legitimate individuals and companies that we disbursed forex to.

“We have more than enough foreign exchange to meet the request of our customers for school fees and others,” NAN was told.

In a data released by the CBN, the apex bank, within three weeks, injected more than 1.4 billion dollars for both wholesale and retail intervention into the interbank Forex market.

Mr Ayo Teriba, Chief Executive Officer, Economic Associates, is optimistic that the CBN would be able to sustain its intervention on the forex market.

Teriba told the NAN that increase in oil production and high oil prices had increased the foreign reserve base of the country.

“We are back to a situation where the forex at the disposal of the CBN is likely to go up.

“The CBN could not intervene in the forex market in 2016 because of low oil production, prices and because foreign reserves were also low.

“Today, oil price is up, reserves have also gone up, the outlook of the oil prices is stable and production in Nigeria is going back to capacity; so it has the capacity to intervene.

“In a couple of months, the apex bank should be able to meet all of the demands and all the multiple exchange rates will converge.”

March 13, 2017
Forex: Banks seek buyers as CBN continues to flood market

The new strategy of the Central Bank of Nigeria (CBN) to meet all legal demand for foreign exchange (Forex) has led Money Deposit Banks to contend with expending all the dollars in their possession.

A check by the News Agency of Nigeria (NAN) in Abuja showed that the banks had cleared all backlog of demands for foreign currencies for basic travel allowance, school fees and medicals.

A source in the United Bank for Africa, told NAN that UBA had so much dollars that the bank’s marketers had been asked to encourage customers to request for foreign currencies.

The source said that the bank wanted to avoid a situation where it was forced to return excess Forex to the CBN.

It explained that doing so would force the CBN to reduce the quantity of Forex it sold to banks.

Another source from First Bank said following the CBN intervention, the bank had succeeded in clearing all pending requests for Forex as far back as September, 2016.

Also, a source in Guaranty Trust Bank commended the decision of the CBN to flood the market with Forex, thereby allowing the banks to meet legitimate demands from its customers.

It was also gathered from Heritage Bank that prior to now, the bank published the names of individuals and companies it disbursed Forex to in a page of any particular newspaper.

“Right now, we take two or three pages in the newspaper to publish names of legitimate individuals and companies that we disbursed Forex to.

“We have more than enough foreign exchange to meet the request of our customers for school fees and others,” s0NAN was told.

In a data released by the CBN, the apex bank, within three weeks, injected more than 1.4 billion dollars for both wholesale and retail intervention into the interbank Forex market. (NAN)

March 12, 2017
Forex: CBN to inject more funds

There are strong indications that the Central Bank of Nigeria (CBN) is unrelenting in its move to ensure liquidity in the interbank foreign exchange (Forex) market, as it will inject more funds into market this week.

This is according to information gathered by the News Agency of Nigeria (NAN) on Sunday in Abuja from market operators.

Confirming the proposed additional foreign exchange injection into the system, the acting Director, Corporate Communications of the CBN, Mr Isaac Okorafor said the CBN was determined to sustain the provision of liquidity in the Forex market.

Okorafor cautioned dealers in foreign exchange not to engage in any unwholesome practice that could be detrimental to the smooth operations in the market.

He also warned that the CBN would impose heavy sanctions on any organisation involved in such acts.

The CBN had, as at last week, injected over 1.4billion dollars into the interbank Forex market for both wholesale and retail interventions. (NAN)

March 12, 2017
CBN sustains forex supply with $170m disbursements

The Central Bank of Nigeria (CBN) yesterday channeled $170 million as wholesale intervention in the interbank market to meet the requests for Business/Personal Travel Allowances and other pressing dollar demands.

In a statement, the bank explained that the interventions were exigent as more customers of banks and other business people overcome the earlier difficulties in obtaining forex for their transactions, and in a bid to sustain the tempo of foreign exchange supply to the interbank forex market and ensure liquidity.

CBN’s Acting Director, Corporate Communications, Isaac Okorafor, said the bank remained resolute in ensuring that it supplies enough forex to genuine customers of Deposit Money Banks and increase liquidity in the market.

According to him, the uniqueness of the Wholesale Forwards was that banks are allowed to use their winnings from auctions to fund matured obligations to meet Letters of Credit remittances, extinguish bills for collection and other forex demands.

With this development, importers who had hitherto been using bills for collection will now experience relief instead of having to patronize other more expensive sources.

It will be recalled that the CBN only on Tuesday, injected another sum of $100 million into the interbank foreign exchange market in its resolve to ease the challenge of access to foreign exchange by genuine customers.

Thursday’s injection by the CBN takes the amount so far offered in the interbank forex market within the past few weeks to over $1.2 billion for both wholesale and retail interventions.

March 10, 2017
CBN’s forex intervention, artificial – Economist
- says ERGP la is specifics
The Central Bank of Nigeria (CBN) has been cautioned that its current foreign exchange (forex) intervention to stabilise the Naira is artificial and capable of scaring off foreign investors.

Dr Anthony Aziegbemi, an economic consultant and partner at Value Fronteira Limited stated at his presentation on the “Way out of recession” on Wednesday that “daily roll out of restrictions and pumping out of forex creates uncertainty and will scare away foreign investors because they are not sure of what will happen to the rate and the value of the currency to enable them plan.”

Dr Aziegbemi, who was a former legislator during the Olusegun Obasanjo-led administration, noted that “pumping forex out because we have it, once that dries up we will be back to square one. The value of the exchange rate should be determined by market forces.”

“If you don’t follow these laws and you do it artificially, like banning of the 41 items from getting foreign exchange, the economy won’t work as expected.”

Speaking on the way out of the current recession, Aziegbemi advocated for more money to be voted for the power, housing and works over this year’s figure of N370 billion in order to create jobs and stimulate the economy.

The former lawmaker also criticised the CBN’s decision to increase interest rate from 11% to 12% arguing that this will not move the economy out of recession but he expects the Monetary Policy Committee (MPC) to cut rates at its next meeting.

He said that countries that successfully came out of recession had to lower their monetary policy rates to encourage spending. “So raising the lending rate has made less money available in the system and more difficult to drag the economy out of recession,” he said.

Aziegbemi also urged the federal government to drastically reduce the country’s import bill which stands at over $8 billion annually by at least half of that amount. He noted that “if we don’t curb our taste for foreign goods we will still be in trouble.”

Also speaking on the recently released Economic Recovery Nas Growth Plan (ERGP) Aziegbemi lamented that the document lacked specifics on some of the plans and targets stressing that there was no information on how government hopes to meet 8% growth rate for the manufacturing sector by 2020 as stipulated in the document.

The document he added does not have a fiscal stimulus package “which is what is needed to get out of recession.”

His solution to get the country’s economy out of recession he pointed out include putting money into specific projects to generate employment and stimulate spending by the masses; reducing Company Income Tax (CIT) from 30% to 20%; eliminating leakages in all forms including the CBN released g the names of the companies that benefit from its interventions and those behind the companies for transparency sake; and granting amnesty to treasury looters with a moratorium of six months.

While commending government for its efforts to recover stolen public funds, Aziegbemi noted that lengthy legal battles and the fact that in the two years that the government has been prosecuting the war, only one high-profile figure has so far been convicted while according to him “between N5 and N10 trillion are reckoned to be buried in soak aways, mud houses and farms across the country.”

To get some of this money back, the ex-lawmaker advocated for amnesty for these looters to return what they have stolen but after the expiration of the six months moratorium any looter that fails to return the loot should be made to face the law.

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March 8, 2017