The Nation Newspaper

Tag: interbank market

  • CBN injects $100m into interbank market

    The Central Bank of Nigeria (CBN) yesterday released  $100 million into the Nigerian Forex market to boost liquidity in the market.

    The move was also in line with the regulator’s determination to safeguard the interest of customers seeking to purchase foreign exchange for personal obligations and checkmate any attempt at causing panic in the market.

    The release, which is coming barely 24 hours after the Bank injected $210 million into the wholesale segment of the market, is aimed at accommodating the spike in the seasonal demand for foreign exchange to meet various personal obligations, particularly pilgrimage.

    Furthermore, it was learnt that the CBN plans to inject more United States Dollars into the foreign exchange market in the coming days, to checkmate any attempt to trigger artificial scarcity of the greenback.

    Confirming the release, the Bank’s Acting Director, Corporate Communications, Isaac Okorafor said the move had become necessary in order to protect customers from the activities of speculators who might want to capitalize on the increase in demand for foreign exchange at this time to make brisk gains.

    While noting that the CBN had sufficient foreign exchange to meet genuine needs, Okorafor cautioned dealers against speculation, warning that they stood to lose much if they chose to hoard currencies in anticipation of a spike and a depreciation in the value of the naira.

     

  • CBN pumps $195m into interbank market

    CBN pumps $195m into interbank market

    The Central Bank of Nigeria (CBN), in continuation of its drive to ensure liquidity and stability in the foreign exchange (forex) market, yesterday injected  $195 million into various segments of the inter-bank forex market.

    A breakdown of the figures released by the CBN, showed that $100 million was offered to authorised dealers in the wholesale window, just as the Small and Medium Enterprises (SMEs) window was allocated $50 million.

    Those seeking forex for the purpose of Business Travel Allowance/Personal Travel Allowance, tuition and medical bills, among other invisibles, received $45 million.

    The Acting Director, Corporate Communications at the CBN, Isaac Okorafor, who confirmed the figures, said the bank’s continued intervention was aimed at strengthening the international value of the naira, while ensuring accessibility to the greenback by customers who required it for genuine purposes.

    The CBN had in the last round of forex intervention in the inter-bank market on June 28, injected $195 million to the wholesale, SMEs and invisibles segments of the market.

    Meanwhile, a survey of markets in the Bureau de Change segment (BDCs) in Lagos, Abuja, Port-Harcourt and Kano, showed that the naira exchanged at an average of N360/$1.

  • CBN optimistic of rates convergence at FOREX market– Emefiele

    CBN optimistic of rates convergence at FOREX market– Emefiele

    Mr Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN) says the apex bank is determined to see the convergence of rates at the foreign exchange market.

    Emefiele said this while fielding questions from newsmen at the end of the Monetary Policy Committee (MPC) meeting of the CBN in Abuja on Tuesday.

    The CBN governor denied insinuations in some quarters that it was directed by the National Executive Council (NEC) to intervene at the FOREX market before it started injecting money into the interbank market.

    “NEC did not direct the CBN as is being insinuated in some quarters.

    “We have seen the trend and we took decision to revise it through our FOREX intervention,’’ Emefiele said.

    The governor said that the CBN was optimistic that the rate between the official and parallel market would converge further.

    When asked if the CBN could sustain the policy, Emefiele said that the bank had the capacity to take decisions and implement them.

    He noted that the nations’ foreign reserves had improved further to 31 billion dollars.

    The News Agency of Nigeria (NAN) reports that the MPC rose from its meeting with a retention in the Monetary Policy Ratio (MPR), Cash Reserve Ratio (CRR) at 22.5 per cent and liquidity ratio at 30 per cent.

    Since February when the CBN started its intervention at the interbank market, it had injected more than 1.5 billion dollars, and the Naira had extended its gains against the dollar.

    To further sustain its intervention at the market, the apex bank injected another 180 million dollars on Monday to meet the needs of schools, medicals, business and personal travel allowances.

    NAN reports that in January, the Association of Bureau De Change Operators of Nigeria (ABCON) appealed to the CBN to ensure rate convergence as well as eliminate the multiplicity of rates in the market.

    Meanwhile, the Naira had continued to appreciate at the parallel market, exchanging at N420 (buying rate) and N430 (selling) on Tuesday afternoon.

    The Pound Sterling and the Euro closed at N530 and N450 respectively.

  • 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.

  • Naira stabilises at N304.75/$ at interbank market

    Naira stabilises at N304.75/$ at interbank market

    The naira on Wednesday stabilised at N304.75 to a dollar at the official interbank market, the News Agency of Nigeria (NAN) reports.

    At the Bureau De Change (BDC) window, the nation’s currency traded at N385 to a dollar, Central Bank of Nigeria (CBN) controlled rate, while the Pound Sterling and the Euro closed at N564 and N509, respectively.

    The naira, however, weakened at the parallel market, losing five points to exchange at N470, from N465 traded on Tuesday, while the Pound Sterling and the Euro closed at N565 and 510 respectively.

    Prof. Sheiffdeen Tella, a senior Economist at the Olabisi Onabanjo University, Ago Iwoye in Ogun, said that the nation’s currency required a continuous inflow to sustain its appreciation at the market.

    Tella said that the market had been witnessing marginal appreciation because the inflow was not based on production.

    According to him, speculators take advantage of the movement of the naira to manipulate the market.

    The don explained that manufacturers were also looking the way of the parallel market to source for forex, thereby putting undue pressures on the naira.

    NAN reports that the sale of the proceeds of Diaspora remittances to BDCs had helped in sustaining the appreciation of the naira for about four weeks.

    Stakeholders are, however, troubled that in spite of the weekly sale of forex by Travelex and First Bank of Nigeria (FBN) in Lagos and Abuja, the naira was still struggling to survive.

     

  • Naira depreciates against dollar

    Naira depreciates against dollar

    The Naira on Friday depreciated in most major segments of the foreign exchange market, the News Agency of Nigeria (NAN) reports.

    The Nigerian currency fell by N2.24 to exchange at N308.69 to the dollar at the interbank market, from N306.93 recorded on Thursday.

    At the Bureau De Change (BDC) segment of the market, it closed at N420 to the dollar, N550 to the Pound Sterling and N465 against the Euro.

    At the parallel market, naira lost N2 to close at N425 against the dollar from N423 it traded on Thursday, while it exchanged at N545 and N470 against the Pound Sterling and the Euro, respectively.

    Traders at the market said that in spite of the reduction in the rush for the greenback to meet up school fees payment, the naira continued to depreciate.

    They said that the demand for dollars for importation far outstripped its supply.

  • Breaking News: Naira to trade at N270/dollar as new forex regime

    Breaking News: Naira to trade at N270/dollar as new forex regime

    With the flexible foreign exchange policy driven by the Central Bank of Nigeria (CBN) opening today, analysts have predicted a volatile and interesting trading for the day.

    According to Upshot reports, the interbank market, which opened by 9.00am and closed at 2.00pm, will see the naira-dollar exchange rate in a volatile state. The local currency is likely to exchange around between 250 and 280 against the greenback.

    The CBN, three weeks after the Monetary Policy Committee’s (MPC) consensus decision to adopt a flexible exchange rate system, announced the re-introduction of a market-driven two-way quote single Interbank Foreign Exchange (FX) Market last Wednesday. The policy shift is against the CBN’s long-held stance of maintaining naira-dollar peg at N197/$1.

    The fifteen banks accredited by the CBN for the new FX window had sent in requests totalling about $4.5 billion, a development which the apex bank said it would meet.

    Head of treasury at one of the deposit money banks told newsmen on Monday that, the development has already geared activities at both the capital and money markets.