The Nation Newspaper

Tag: forex

  • Equities rally N294b gain as CBN releases forex guidelines

    Equities rally N294b gain as CBN releases forex guidelines

    The release of the much-awaited guidelines for the flexible foreign exchange policy of the Central Bank of Nigeria (CBN) triggered a scramble for Nigerian equities, leaving the market with a net gain of N294 billion.

    Against the background of sustained depression in share prices over the past three weeks attributed to foreign exchange (forex) uncertainties, the announcement by the CBN excited both foreign and domestic investors. With more than three advancers for every decliner, the stock market spiraled to its best performance so far this month.

    In the new flexible foreign exchange system, the apex bank will merge all existing segments of foreign exchange market into a single “window”, which pricing will be determined by market forces with limited intervention from the apex bank. In essence, Naira will flow according to market forces with effect from Monday June 20.

    Foreign investors, who account for more than half of Nigerian stock market transactions, who had stayed on the sidelines due to foreign restriction joined the bargain-hunting at the Nigerian Stock Exchange (NSE).

    Aggregate market value of all quoted equities rose to N9.579 trillion from its opening value of N9.285 trillion, indicating a gain of N294 billion. The All Share Index (ASI)-the benchmark index for the stock market, rose by 3.17 per cent to the month’s high of 27,891.96 points as against its opening index of 27,034.05 points. The steep gain pared the negative average year-to-date return to 0-2.62 per cent.

    Market pundits were unanimous that the release of the framework for the flexible forex policy was the main driver for the market.

    “Investments were largely stimulated by Central Bank’s clarification on its flexible foreign exchange policy which reduced uncertainty in the financial markets,” Cowry Asset Management stated.

    Dangote Cement, NSE’s most capitalised stock, led 32 other stocks on the gainers’ list with a gain of N8.20 to close at N172.20. Mobil Oil Nigeria followed with a gain of N7.99 to close at N169.50. Nigerian Breweries rose by N5.75 to close at N133.75. Guinness Nigeria added N4.90 to close at N102.90 while Guaranty Trust Bank gathered N1.44 to close at N19.95 per share.

    Total turnover was above average with the exchange of 588.42 million shares valued at N3.48 billion in 5,088 deals. The three most active stocks were United Bank for Africa (UBA), with 197.20 million shares; Skye Bank, 74.55 million shares and FCMB Group, with 54.49 million shares.

  • ‘What flexible forex policy means to manufacturers, investors’

    The Central Bank of Nigeria (CBN’s) decision to adopt  flexible foreign  exchange (forex) rate  has been long-awaited by local and international investors, analyst at Eczellon Capital Limited, Mustapha Suberu, said yesterday.

    According to him, the policy allows only one single market structure where rates are determined by market forces, adding that it is expected to boost investors’ confidence and get more dollars into the system.

    The policy, which was unveiled yesterday by the CBN Governor, Godwin Emefiele, would not only increase the volume of dollar in the system, but give government the desired confidence to approach the issue of $1 billion Eurobonds in August.

    Explaining what the new policy entails, Suberu said the interbank market will from Monday, become the only market where rates for the naira and dollar would be determined. He said the naira three-month forward rate currently trades at N333 to dollar, and that the rate to be adopted would not be too far from the forward rate.

    Going forward, he said the naira/dollar rate would be determined by the forces of demand and supply, adding that the policy would help government source debt from the international market because investors would be more confident about the state of the local currency against the dollar.

    Suberu said the manufacturing sector would no longer access forex at the official rate, a practice that would likely raise the prices of goods.

    Also, Nigeria is expected to source for more foreign loans  to take advantage of lower interest rates and allow local banks to lend to small businesses.

    The Federal Government said it wants to switch its debt mix so that 40 per cent of loans would come from abroad, compared with 16 per cent that obtains now, and extend its debt maturity profile.

    It plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the currency.

    President, Association of Bureau De  Change Operators of Nigeria (ABCON), Alhaji Aminu  Gwadabe,  said the policy  is skewed in favour of only a few operators in the forex market. “To me, instead of deepening the market, the policy will lead to further shrinking in the volume of dollar available in the market,” he said.

  • Forex guidelines’ delay plunges naira to N367/$

    The naira yesterday relapsed to N367 to a dollar in the paralell market from Friday’s close of N365, as traders react to Central Bank of Nigeria’s (CBN’s) delay in releasing the guidelines for the flexible foreign exchange policy.

    The plunge in naira’s value, traders said, followed the rise in forex demand as fuel marketers and other forex users shop for the greenback to meet their obligations abroad.

    President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe said the naira will continue to fall until the CBN releases the much awaited forex policy guidelines.

    A CBN source said the guidelines for the flexible foreign exchange policy may be released before the end of the week, and would define the fate of the naira against the dollar.

    The CBN, the source revealed to Bloomberg,  would likely make an announcement in a circular to banks. The source, however, pleaded not to be mentioned as he said he was not to be identified discussing the June 9 private talks that held in Abuja, the nation’s capital.

    Analysts, including those at Renaissance Capital Ltd., said they expect the CBN to allow the naira weaken around a trading band in the interbank market, while allocating dollars at a fixed rate to industries, which the government deems strategic. The apex bank is still working out the details of the system.

    CBN governor, Godwin Emefiele, has been bombarded with calls more than a year to devalue the currency, as other oil exporters from Russia to Kazakhstan and Angola have done, amid the decline in crude oil prices since mid-2014 to around $50 a barrel. Investment into Nigeria has shriveled as foreigners are put off by capital controls needed to defend the peg, while local businesses have struggled to import raw materials and equipment.

    Naira three-month forwards, yesterday, rose to 301 against the dollar in London, poised for a record close and suggesting traders see the currency falling to about that level from the spot price of 198.5. Forward contracts maturing in a year traded at 340, also a record high.

    Nigeria, Africa’s biggest economy, removed a requirement for foreign investors to hold local-currency debt for at least, one year in mid-2011. That led to the nation’s inclusion the following year, in JPMorgan Chase & Co.’s local-currency emerging market bond indexes, tracked by more than $200 billion of funds, and prompted naira to plummet. The country was kicked out of the indexes last September because JPMorgan said the currency restrictions made it hard for investors to trade naira bonds.

    Economists have blamed the capital controls for exacerbating a foreign-exchange liquidity crisis caused by the drop in the price of oil, which accounted for two-thirds of government revenue and 90 percent of exports in 2014. Growth was negative in the first quarter for the first time since 2004 and a recession, or two consecutive quarters of contraction, is imminent, the central bank said last month.

     

  • Forex: minister takes airlines’ case to CBN

    Forex: minister takes airlines’ case to CBN

    • We’ll assist, says Emefiele  

    the Minister of State, Aviation, Hadi Sirika  led a delegation of indigenous airlines’ operators to the Central Bank of Nigeria (CBN), early in the week to explore ways of  resolving the problem of meeting their foreign exchange requirement.

    His intervention is a fallout of request by the umbrella body of indigenous carriers-Airline Operators of Nigeria (AON).

    According to AON, the difficulty in accessing forex is threatening their operations, and they expressed that non resolution of the situation could lead to the collapse of the air transport sector.

    AON’s Chairman, Captain Nogie Meggison, said the airlines were struggling to keep their operations afloat on account of difficulty in accessing foreign exchange to acquire aircraft spares to carry out maintenance checks, pay foreign crew salaries and allowances; pay for aircraft insurance, and well as carry out simulator training for flight crews.

    Meggison said the inability to access forex constituted the greatest of the many challenges operators are facing.

    Sirika said it is important for the CBN to assist as the challenges facing indigenous carriers could not be ignored because of the role airlines play as the pivot for economic development.

    The CBN Governor, Godwin Emefiele promised to assist domestic carriers by putting them on the priority list to access forex.

    Sirika said: “It is common sense that you buy your airplane in hard currency, you maintain the airplane in hard currency, you buy the spares in hard currency, and even the fuel at some point is purchased in hard currency; so you must be able to access hard currency to operate as an airline.

    “ The CBN governor has  pledged to make available a window for domestic carriers to access foreign exchange,  to include aviation on the priority list in an effort to support domestic airlines their  safety and  operations.”

    On the problem of aviation fuel, the Minister said he had met with the Minister of State for Petroleum Resources who assured  that they would try to get Port Harcourt refinery on-stream before the end of the year to begin refining of  Jet A1 otherwise known as aviation fuel.

    He assured that with some investment, the Kaduna Refinery will be back on-stream to make aviation fuel available.

    ”We are committed to it, we will begin to produce it and if there is anything we can do to bring down the price we will do so. The whole essence of refining it locally is not only to make it available, but it will also make it cheaper. Because then the element of importation is removed,” Sirika said.

    Concerning  direct distribution of Jet A1 to the airports, the Minister said government is working on alternate plans to ensure that aviation fuel supply is factored into the concession arrangement.

    ”we can cause the concessionaire to ensure that the infrastructure is developed around those airports especially that of Lagos, Port Harcourt, Abuja and Kano “ , he said.

    With regard to taxes on aircraft and spare parts, the Minister observed that while the Ministry of Finance holds the position that  there should be no duty on aircraft and spare parts, the Nigeria Customs thinks that the waiver is only on aircraft itself and not on the spares.

  • Marketers worried over forex guidelines’ delay

    Marketers are worried  over the failure of the Federal Government to release the guidelines on the “flexible foreign exchange (Forex) regime” which provides them with multiple windows of accessing forex for fuel importation.

    They said they were yet to benefitt from the provision weeks after the guidlines were issued. Independent Petroleum Marketers Association of Nigeria (IPMAN), National President Chief Chinedu Okoronkwo, said his members were waiting for directives on  how to source for forex.

    His members, he said, had been importing fuel before  flexible forex was introduced, adding that they hoped the initiative would boost their operation.

    Okoronkwo said “Already, marketers have been placing orders for fuel abroad, and do bring fuel into the country. We have not stopped importing petroleum products. However, we are waiting to know the full details of the new scheme tagged: “Flexible forex regime” as contained in the guidelines.  We would like to have indepth knowledge of the scheme before we let the public know how our members intend to key into it.”

    The Chief Executive Officer, Petrocam Trading Nigeria Limited, a downstream operator, Mr. Patrick Ilo, said marketers are anxious to know what the  guidelines on ‘flexible forex regime’ looked like in view of the fact that it was expected to impact positively on their activities

    He said his firm, like others in the sector, are banking on the guidelines to improve growth.

    Ilo in a chat with The Nation during the opening of Petrocam solar powered mega station in Ajah, Lagos, said the guidelines would favour marketers who would import fuel into the country.

    He said with the guidelines in place, marketers are sure of accessing forex for fuel importation, thereby improving supply. Ilo said: “Though Petrocam started operation before acute shortage of forex began a few months ago, the firm has managed to survive.  Amid this, the Federal Government brought the idea of flexible forex regime.  We at Petrocam are waiting for the guidelines on the regime. I’m confident that the period of waiting for the guidelines would be over soon. When this happens, marketers would source forex at relatively cheaper rates and import more fuel into the country.’’

    The Federal Government introduced ‘flexible forex’ in order to enable marketers source forex independently.  The idea replaced the old and cumbersome method of sourcing forex from the Central Bank of Nigeria (CBN) window by marketers.

    “Flexible forex is said to be a less cumbersome and varied means of sourcing for forex by importers of fuel and other consumables into Nigeria. But we are waiting to see the guidelines that would provide clarity on the issue, he added,” he said.

    The flexible forex was introduced following the increase in price of fuel from N86.50 per litre to N145 per litre and high exchange rate of dollar to naira.

  • Berger Paints promises growth as forex scarcity reduces Q1 profits

    Berger Paints promises growth as forex scarcity reduces Q1 profits

    Berger Paints Nigeria Plc has promised their shareholders improved returns on their investments by the end of the year despite the drop in their financial performance for the first quarter (Q1) ended March 31, 2016 to foreign exchange scarcity (FX).

    The Premier paints company in Nigeria said it is hopeful of increased profitability by leveraging on its soon to be commissioned first automated paint manufacturing plant in Sub-Sahara Africa that would reduce production costs, reduce response times, improve their product quality and make them compete favourably with imported brands.

    The Managing Director and Chief Executive Officer, Berger Paints, Mr. Peter Folikwe disclosed this to stockbrokers at the presentations of the company’s facts behind the figures on the floor of Nigerian Stock Exchange in Lagos.

    Folikwe said though revenue increased by Eight per cent (N54m) from N706 Million in Q1 2015 to N760 Million in Q1 2016, Operating Profit fell 72 per cent (N79m) from N109 million in Q1 2015 to N31 million in Q1 2016.

    He said the decline was as a result of; “margin drop largely as a result of increase in raw material prices, scarcity of foreign exchange as we have to largely resort to local sourcing of raw materials at exorbitant price and the general lull in economic activities due to the delay in passage of 2016 budget”.

    For the second quarter 2016 financial forecast, he said they are targeting N1.014 billion revenue and profit after tax of N111 million.

    The Chairman,Berger Paints, Dr Oladimeji Alo said despite the first quarter result, the company intends to reclaim its first position in the market through aggressive drive and investments in their leading brands, increase in  marketing activities to gain visibility and renewed evolvement of their route to market capabilities to drive aggressive sales.

  • ‘Forex sourcing is a big issue’

    ‘Forex sourcing is a big issue’

    Sourcing for foreign exchange (forex) is not easy for businesses. This is why some firms patronise the parallel market, which sells at a cut-throat price. The resultant effect, according to Mr Chinedu Nwokolo, Chief Executive Officer of Pedini Nigeria, representative of European retail brand Bosch, is the high cost of goods and services. ADEDEJI ADEMIGBUJI  met him.

    How would you assess the local economy?

    It is actually very receptive. Even though we have a downturn and the economy is experiencing a kind of stagnation now but the good news is that we have an incredible president who’s doing a marvellous job trying to turn things around. There is now a deliberate and sincere effort to revamp the  economy through diversification and other sound economic policies that will turn things around. I think with the measures that the government has put in place now and its disciplined approach to setting the economy on the right path, I can assure you that the horizon is bright in spite of what we are passing through now. Even though things are slow now, we believe there is a future in it.

    Our firm believes in the economy. On the home appliance market, it is actually a huge category. We have an emerging middle class that is growing and will continue to grow. Right now, based on J.P Morgan’s studies, we have between 24 and 30 million middle class people that can afford our products and they are growing. Most of them are urban highly educated people and they put quality first; and Bosch is synonymous with quality.

    How did the tight foreign exchange regime affect your operation?

    Foreign exchange has been a big issue. It’s actually made the products 30 per cent more expensive. Also, sourcing for the forex is a big issue; the good thing is that they at Bosch understands the economic climate of Nigeria, and they are willing to give us enough time to source for the foreign exchange to pay them. They know that the foreign exchange is only got through the Central Bank of Nigeria (CBN), that’s when we send our repayment so there is a bit of flexibility there; so that’s helping us as well.

    How huge is the home appliance market?

    From the last data I received, about $400 million worth of goods are imported  yearly into Nigeria. And when I say appliances, I mean everything ranging from TV to freezer. For Bosch, what this means is that we have an opportunity to dominate the market. In the market, there are two types – the integrated  and the stand alone markets. The integrated version is the area I believe Bosch will be dominant because there are really no players in that industry. Those are the appliances we integrate in the kitchen but in the other one as well, we are also very strong and we are hoping that we can dominate at least 10 per cent of that market in the next one year.

    Do business men trust your products?

    The relationship between a Nigerian business man and a foreign business man is actually one that should be based on integrity. But once you have the right partner, it is easy to trade properly in spite of the negative environment we have. So I think Bosch made a good choice in selecting us as their sole distributor for Nigeria because over the years, we have taken time to build trust and integrity as a business philosophy. It is also a very good company that keeps his reward. So once they make a promise to us, we keep it and once we make a promise to them we keep it. So we have been able to have a symbiotic relationship.

    How do you intend to cope with competition?

    From my vantage point, I think LG & Samsung are going to be the major players out there and I think either LG dominates the market right now with a huge percentage of market share; so we are hoping that we will begin to distinguish our products and begin to tell our clients why our products are better and why they should purchase our products and then try to hinge it on that market share. Our ultimate competitors that we are looking at are LG and Samsung but because of the pedigree of our brand and its German heritage, there is actually no basis of comparison.

    How resistant are your products to unexpected power surge?

    Our products are actually built for life. And where other people give 12 months warranty, we give 24 months and we even give extended warranty up to five years. So we are sure of our brand; we are sure about the durability of the product so we don’t have any product.

    How long have you been in business?

    I’ve been in the furniture and kitchen industry for the past seven years but particularly in the appliance industry in the last three years.

    How will you assess the market so far in the country?

    Before I came in, I would say there were three segments of the market. There wasthe entry segment and there was also the luxury segment. Pedini as a brand operates in the luxury segment and the Bosh brand also is in the luxury segment. However, there is a product that is about to be launched into the Nigerian market which is Vurn kitchen. Pedini and Bosch have come together to leverage each other’s strength. Pedini has always been known for quality kitchen and Bosch on its own over the years has been known for its timeless, durable and reliable home appliances. These two brands coming together with a combination Pedini kitchen fitted with Bosch appliances is a redefinition of that category and I can assure you that the Vurn kitchen is going to revolutionise the market for kitchen because they are bringing in this Vurn kitchen an amazing price that is unbelievably affordable. I mean a product that is really affordable and within the reach of Nigerians.

    What effort are you making to move into other geo-political zones?

    We just launched in Lagos and we are already getting a lot of businesses because of that. Major companies have started asking for our products. In the next three months, we are going to open our Abuja branch, we just secured a location there and construction is going on right now. That should be ready in about four months. We are also going to launch in Port-Harcourt, we are hoping that would be before the end of this year if not it’s going to be early next year.  The next one we are going to launch in Ikeja, Lagos as well, in Lekki, in Ibadan. After that, we are going to begin a franchise drive that will allow us to have up to 100 stores within five years. So we want to have 100 Bosch branded stores; we want everybody to have a Bosch store.

    How achievable is that?

    On my own part, as Pedini, the proprietor of this distributorship, we intend to have retail outlets of our own apart from partnering with existing mega stores such as Mega Plaza, Spars and the rest. We are also bringing in individual entrepreneurs of like minds who are aggressive and want to see the brand evolve. We believe that a lot of people who are looking for business to do will seize this unique opportunity to partner with us and be part of these good business opportunities. There are discussions going on too in terms of the long term plan of really establishing a Bosch assembly plant here in Nigeria. Bosch is determined to play in this local market in the assembly way in the next couple of years. This is something that the board of Bosch will have to discuss and agree but there is a lot of interest in coming to Nigeria and setting up an assembly.

    In specific terms, how is your business shaped by the economic situation?

    It’s actually affected because it’s difficult to get foreign exchange, and when we get, sometimes, we get from the parallel market, and the prices are high. So goods that normally cost maybe N100,000 increased to N130,000, N140,000. So, it reduces the number of people who are interested in buying this product. So it’s actually affecting sales in terms of the general picture but we believe that sooner than later, the economy will improve. There will be more money in the pockets of many Nigerians and they can also be able to spend more.

    How prepared are you to protect your products from counterfeiting?

    What we want to do is to make sure that Bosch products are only available at certain stores. That’s why we want to build 100 stores in Nigeria so that you buy from there. We are not going to supply to the market; we are going to supply to games, stores, and mega-plazas. We are also talking to Cash and Carry to see whether we can work with them. We are working with reputable brands and we are going to let our clients know that if they want to get this product, they are in these authentic stores. Counterfeit is difficult to remove entirely but over time, we believe there is this method that can help eradicate it. We are also going to partner with Standard Organisation of Nigeria (SON) to fight faking our brand.

    How much do you invest in quality control across your supply chain?

    Every Bosch product that is produced goes through a rigorous process before getting to Nigeria. So there is no question about the quality of the product. In terms of marketing, we have put a compelling strategy in place to penetrate the market. The younger middle class are on social media and we have hired a robust social media group to help us in this market.

    Bosch founder, Robert Bosch, said he would rather trade profit than trust. What is the import of this?

    That is the foundation of everything that I personally believe in.  I believe that integrity is more valuable than trust. It is better to lose money than to lose the trust of your friends and that is what I discuss every day with my team. You must give a 120 per cent to your clients because even though you might lose in certain aspects, in the long run you will make your profit. On the trust issue again, the Nigerian business landscape is very challenging so what we have done is to evaluate clients and offer credit with the help of our banks. In some cases we get beaten but in most cases our evaluation has been right. So we have like grade A, B, C clients. Grade A, we offer them credit, B, C, we offer them low credit.

    Tell us about Pedini Nigeria?

    Pedini Nigeria is actually an offshoot of Pedini Italy but right now we are also involved with Bosch to create a new brand called Vurn. It’s going to be the kitchen that will revolutionise the way we cook because it’s going to be assembled locally, it’s going to be fused with Bosch and the price is going to be affordable that every home will have that product. So watch out for Vurn coming to a house next to you. We intend to populate the entire environment with Vurn products. It’s actually built by Pedini and empowered by Bosch.

  • NCC seeks review of forex policy

    NCC seeks review of forex policy

    • ‘33.7m excluded from telecoms revolution’

    The Nigerian Communications Commission(NCC) yesterday urged the Federal Government to relax its fiscal and monetary policy especially as it affects access to foreign exchange (forex). It lamented that the development is a threat to the provision of infrastructure that will assure the realisation of President Muhammadu Buahri’s cardinal objectives of job creation, security and anti-graft war.

    Its Executive Vice Chairman, Prof Umar Dambatta who spoke at the ‘Focused Industry Stakeholders’ Forum organised by the Universal Service Provision Fund (USPF) and Hackathon Award’ with Universal Access: Eliminating The Inclusion Barriers, as its theme, lamented that the country ranked 134 out of 144 countries in global ranking in the area of infrastructure.

    He also said despite the over $32 billion investment in the telecoms sector, about 33.7 million people are still excluded from the telecoms revolution as they are either underserved or unserved.

    Prof Dambatta appealed to the Federal Government to give forex concession to the telecoms industry, relax the fiscal and monetary policy so that the campaign promises of the Buhari would be realised, adding that the provision of affordable ubiquitous broadband infrastructure is central to all the goals.

    According to him, the Federal Government should revisit the policy that restricts forex access to investors for ‘critical infrastructure’ promising that the Commission will monitor the utilisation of forex so that it is not abused.

    He said the low global ranking of the country should be seen as a wake-up call, arguing that all hands must be on deck to bridge the infrastructure gap in the industry.

    Speaking on 33.7 million digitally excluded population, he said the unserved population in the country has been reduced from 36.8 million (24.5 per cent) in 2013 to 33.7 million (22.5 per cent) last year based on the Access Gap study and using the 150 million population benchmark. “With effective partnerships, we can achieve more in the coming years,” Dambatta stressed.

    He said the USPF will play significant role in achieving four of the eight-point agenda of the Commission towards repositioning the telecoms industry, adding that it would play significant role in the facilitation of broadband penetration; improve quality of service; promote ICT innovations and investment opportunities and facilitate strategic industry collaboration and partnership..

    USPF Secretary, Ayuba Shuaibu, said USPF was established to promote availability of telecoms services across the country, adding that the fund existed to enable operators deploy services in areas considered not viable.

  • Chinese Yuan accounts for 6.7% of $27.34b forex reserves

    Chinese Yuan constitutes only 6.7 per cent of Nigeria’s $27.34 billion foreign exchange (forex) reserves, data from the Central Bank of Nigeria (CBN) has shown.

    The figure indicted that the US dollar constitutes 76.6 per cent of the total, having fell from its level of $22.59 billion in September last year to $21.67 billion in December.

    Other currencies in the basket and their shares include Saudi Riyal (SDR) worth $2.32 billion; (8.2 per cent), Euro worth $1.69 billion (six per cent), and British Pound Sterling worth $688.18 million (2.4 per cent).

    The report titled: Currency Composition of Foreign Exchange Reserves indicated that forex inflows to the economy in December last year stood at $20.2 billion as against $27.3 billion recorded in September, representing a decrease of 25.76 per cent.

    While in the corresponding quarter of 2014, the recorded inflow was $37.01 billion, indicating a major decrease of 45.2 per cent. On the other hand, total outflows in the period under review amounted to $8.61 billion. This represents a decrease of 21.22 and 41.90 per cent in comparison with the levels recorded in the preceding quarter and corresponding quarter of 2014, respectively.

    Consequently, a net out-flow of $11.67 billion was recorded in December last year as against $16.39 billion in September.

    Foreign Direct Investment (FDI) inflows declined to $501.83 million in December last year from $1.21 billion in September. Estimated portfolio investment inflows (liabilities), however, increased significantly from a reverse investment level of $387.32 million in September to $1.15 billion in December.

    The aggregate supply of forex for visible and invisible trade during the period under review stood at $8.48 billion. This represents a decrease of 18.3 and 55.5 per cent in comparison with the levels recorded in the preceding quarter and corresponding quarter of 2014, respectively.

    The total amount utilised in December last year, consists of $5.04 billion and $3.45 billion for visible and invisible trades, representing 59.4 and 40.6 per cent, respectively.

    Analysis of forex utilisation by sectors revealed that $5.03 billion was spent on the importation of various items into the country in December representing 59.4 per cent of the total foreign exchange utilised during the period. This also represents a decrease of 8.3 per cent and 44.9 per cent in comparison with the levels recorded in the preceding quarter and corresponding quarter of 2014, respectively.

  • No quick fix to forex crisis, says Bankers’ Committee

    No quick fix to forex crisis, says Bankers’ Committee

    Members of the Bankers’ Committee rose from their 326th meeting yesterday in Lagos to declare that the foreign exchange (forex) crisis facing the country cannot be resolved immediately.

    Speaking on behalf of the committee members, Managing Director, Guaranty Trust Bank Plc, Segun Agbaje, said there is no magic to resolving the forex hitches, except for the country to deepen its import substitution plans.

    Manufacturers and other real sector operators have been finding it difficult to access forex to import raw materials as crude oil prices plunge.

    The bank chief said growing the local forex base for the country is key, and would ensure that overtime, the country will be able to meet the forex demands of its manufacturers and other real sector operators. “The way to deal with the supply gap is to develop import substitution. What we have today is backlog that needs to be met. I do not think there is any magic that will be done to meet all thee demands except to promote import substitution,” he said.

    Agbaje hower, said the good news is that prices of crude oil have moved from $27 per barrel in January to around $37 to $40 per barrel. “As a nation, we pray that while we are working on the forex demand, the prices of crude oil also move up.

    CBN Director, Banking Supervision, Mrs. Tokunbo Martins, said the rise in the volume of non-perfoming loans (NPLs) to five per cent average is not unexpected given the level of stress many businesses have faced over low crude oil prices.