The Nation Newspaper

Tag: Interbank

  • Interbank forex market gets $210m boost from CBN

    The Central Bank of Nigeria (CBN) yesterday intervened with the sum of $210 million to sustain liquidity in that segment of the market.

    According to the figures released by the CBN, authorized dealers in the wholesale segment of the market, as in previous deals, were offered the sum of $100 million, while those in the Small and Medium Enterprises (SMEs) segment got a boost of $55 million. Customers purchasing foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allotted a total of $55 million.

    The bank’s Director, Corporate Communications Department, Isaac Okorafor confirmed the transactions, reiterating that the CBN will continue to ensure the availability of foreign exchange in order to ensure continued stability in the markets.

    Read also: Shoprite Nigeria wins CBN award

    In its last intervention on Thursday, April 18, the bank injected the sum of $254.8million and CNY34.8 million into the Retail Secondary Market Intervention Sales (SMIS) segment.

    Meanwhile, the Naira exchanged at an average of N360/$1 in the Bureaux De Change segment of the market.

  • Interbank, BDC rate gap drops from 150% to 23%

    The Central Bank of Nigeria (CBN) backed Monetary Policy Committee (MPC) members have lauded the convergence of foreign exchange rates, including the drop in the gap between the interbank rate and the bureau de change (BDC) from 150 per cent to 23 per cent.

    They also said that a margin of five per cent was sustainable in most jurisdictions. The BDC rate closed on Friday at N370/$1 while the interbank rate stood at around N316/$1.

    Also, players in the retail segment of the Nigerian inter-bank foreign exchange market had on Friday received a $254.3 million boost from the CBN. It said release of the fund followed bids received from forex dealers by the apex bank.

    Information obtained from the CBN indicates that the deals in the retail window represent requests from the various sectors in the Secondary Market Intervention Sales (SMIS), thereby providing a boost to the respective sectors.

    The Acting Director, Corporate Communications at the CBN, Isaac Okorafor, while confirming the forex sales, explained that the sale was in response to bids received from authorised dealers, on behalf of their customers, at the retail auction announced by the CBN on Wednesday.

     

  • Investors push for interbank rate

    Investors push for interbank rate

    Foreign investors are pushing for the adoption of the interbank rate as the only official exchange rate, The Nation has learnt.

    The interbank rate closed on Friday at N315.10/$1. It has remained the most stable exchange rate in the last six months.

    The new demand by investors followed earlier calls by the International Monetary Fund (IMF) and stakeholders that the CBN unify exchange rates. The Executive Board of the IMF’s Article IV Consultation on Nigeria had in March, urged the authorities to remove restrictions and multiple currency practices.

    In a report released at the weekend, Afrinvest West Africa Limited, an investment and research firm, confirmed investors’ demand on the CBN to adopt interbank rate, and said the investors are insisting that although the CBN’s policies over the past months have led to a convergence between parallel and official market rates, the last leg of the reform which is replacing multiple exchange rates with a transparent interbank market is still pending.

    It said the opening of different Forex windows and targeted intervention by the CBN, which is in excess of $5 billion in the last four months, have had a positive knock-on impact on capital liquidity and resulted in a stronger naira in the parallel market.

    Since the start of a prolonged global oil price drop in the second half of 2014, the Nigerian economy has recorded a significant downturn in performance as plummeting government revenues and the resultant forex crisis dragged the economy into its first recession in 25 years. The country currently has not less than 10 different exchange rates, which many stakeholders are calling for their harmonisation.

    The Afrinvest, said analysis of the naira/dollar movement in the first half of this year showed that at the naira traded flat within N315.10/$1 to N305.90/$1 at the official rate. At the FMDQ’s Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) exchange rates segment, naira appreciated 2.5 per cent since the launch of the window from N375.70/$1 to close at N366.41/$1 while rate at the parallel market also appreciated 33.2 per cent from N490/$1 at the beginning of the year to close at N368/$1 at the weekend. The NAFEX is a polled rate derived from FX rates submission, from a selection of Authorised Dealers participating in the Investors & Exporters FX window.

    Speaking on the call for exchange rate convergence, former Executive Director, Keystone Bank, Richard Obire, said the CBN should move towards unified exchange rate or narrow the rate. He said that multiple exchange rate creates distortion in prices and hurts businesses.

  • CBN disburses $100m to interbank market

    CBN disburses $100m to interbank market

    •Banks buy $68.51m

    The Central Bank of Nigeria (CBN) again yesterday carried out spot, wholesale interventions in the interbank FOREX market by offering a total sum of $100m to authorized dealers to meet the 7 to 15-day forwards requests of customers.

    The latest intervention was confirmed by the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, who, however disclosed that the banks and authorized dealers were only able to pick up $68.51 million.

    Okorafor attributed the inability of the authorized dealers to fully subscribe to the CBN to a surfeit of forex in the system, which may lead to further appreciation of the naira.

    He also disclosed that the CBN will on Thursday, April 20, 2017 continue its sale of $20,000 to Bureax de Change (BDCs) for onward sale to small-end users.

    According to him, the trend monitored by the Bank indicated that deposit money banks are now able to meet the forex demands of their customers within the time frame stipulated by the CBN.

    Speaking further, Okorafor said feedback on the Bank’s forex new window for Small and Medium Enterprises (SMEs) in the country revealed that majority of the small importers were heading for a major boost in their activities. This he said was responsible for the current appreciation of the Naira, stressing that the Naira will continue to gain strength with the relentless efforts of the CBN to  to supply the market with forex.

    The spokesman also reiterated the determination of the CBN to continue to intervene in the various sectors of the interbank forex market in order to guarantee access to all categories of customers requiring forex for legitimate obligations and ultimately ensure stability in the forex market.

  • Naira sells at N440-N445 per dollar

    Naira sells at N440-N445 per dollar

    The Naira on Monday continued to extend its gains against the dollar at the parallel market, the News Agency of Nigeria (NAN) reports.

    The Nigerian currency exchanged at N440 (buying rate) and N445 (Selling rate) to a dollar, from N445/N450 it traded on Friday, while the Pound Sterling and the Euro closed at N530 and N465.

    At the Bureau De Change (BDC) window, the Naira exchanged at N398 (buying rate) and N400 (selling rate), while the Pound Sterling and the Euro closed at N545 and N480.

    Trading at the interbank market showed that the Naira closed at N307.50 to a dollar.

    Traders at the market said they were happy with the level of liquidity but appealed to the Central Bank of Nigeria (CBN) to sustain it to further reduce the gap between the official and parallel market rates.

    Meanwhile, Prof. Sherifdeen Tella, a Senior Economist at the Olabisi Onabanjo University, Ago Iwoye, Ogun, has said that injecting dollars into the interbank market by the CBN is not sustainable.

    “I don’t think that injecting dollars into the interbank market is a permanent solution to the challenges at the FOREX market.

    “It is only a temporary measure,’’ Tella said

    The don, who noted that speculators were the major drivers of volatility in the FOREX market, said that the CBN should change the colours of the N1000 and N500 notes to force them to bring out the currencies in their coffers.

    Tella called for a reduction in the benchmark interest rate by the Monetary Policy Committee (MPC) meeting of the CBN, to enable startups to borrow money to finance their businesses.

     

  • Speculators lose N100m as CBN pumps dollars into interbank

    Speculators lose N100m as CBN pumps dollars into interbank

    Foreign exchange (forex) speculators have lost over N100 million in the last three days after the Central Bank of Nigeria (CBN) injected fresh dollars into the interbank market.
    Many of them panicked as news about the CBN’s intervention hit the market. This was in continuation of its strategy to strengthen the value of the naira.
    According a source in the apex the bank, there is a planned release of an additional $350million bringing the total to $570 million in this week alone to further crash the value of the dollar.
    Already, there are heightened fears among traders and other market participants who are yet to recover from the losses of the last two weeks owing to sharp and sudden appreciation of the Naira.
    CBN’s Acting Director, Corporate Communication, Isaac Okorafor, confirmed this development, reiterated that with improving reserve levels, the Bank was determined to continuously make forex available to all genuine customers through their banks, advising those hoarding the greenback to reduce their losses by selling their dollar stock.
    Market watchers said there was the likelihood of a liquidity glut as banks were beginning to send out salespeople to scout for customers to buy off their dollars to avoid losses arising from the expected further appreciation of the naira.
    The CBN has in the last one week supplied a total of $570 million to the market made up of $80 million for Personal Travel Allowances, medical fees and school fees, $100 million in wholesale forwards, while another $350 million was injected into the interbank market at the weekend.

  • Naira remains stable at interbank market

    Naira remains stable at interbank market

    The Naira on Monday remained stable at the interbank market, closing at N305.25 to a dollar.

    The News Agency of Nigeria (NAN) reports that the naira maintained its Friday rate against the greenback.

    At the Bureau De Change (BDC) window, the naira traded at N400 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro closed at N585 and N506, respectively.

    The naira also maintained its Friday rate of N473 to a dollar at the parallel market, while the Pound Sterling and the Euro sold at N585 and N505 respectively.

    Traders at the market blamed dollar scarcity for the woes of the naira.

    Since the launch of the flexible exchange rate policy, the naira has continued to struggle for survival, leading experts to interrogate the philosophy guiding the policy.

    However, stakeholders have not lost hope in the capacity of Diaspora remittances to change the fortunes of the naira as the Yuletide approaches.

  • Naira bounces back against dollar at interbank market

    Naira bounces back against dollar at interbank market

    The Naira on Wednesday appreciated against the dollar at the interbank market, the News Agency of Nigeria (NAN) reports.

    The Nigerian currency gained 50k to close at N304.50 compared to N305 it traded on Tuesday.

    At the Bureau De Change (BDC) window, the Naira was sold at N400 CBN controlled rate, while the Pound Sterling and the Euro traded at N565 and N500, respectively.

    Skeletal, but clandestine trading at the parallel market saw the Naira closed at N470 to a dollar, while the Pound Sterling and the Euro closed at N565 and N500, respectively.

    Traders said that dollar scarcity persisted in the market as dealers seek more unconventional ways of meeting the needs of their customers.

    NAN reports that the parallel market had been in the eyes of the storm as security agents were on the lookout for currency traders.

    The apex bank gave a nod to the ongoing crackdown on currency traders at its Monetary Policy Committee (MPC) meeting on Tuesday.

    Since the battle line had been drawn between the security agents and traders, dollar scarcity was expected to persist along the frontiers of the parallel market. (NAN)

  • Naira falls to N350/$ at interbank market

    Naira falls to N350/$ at interbank market

    The Naira on Monday fell freely at the official interbank market, the News Agency of Nigeria (NAN) reports.
    The naira exchanged at N350 to a dollar from N328 it traded last Friday.
    At the Bureau De Change (BDC) segment, the naira closed at N385 against the dollar, CBN rate, while the Pound Sterling and the Euro closed at N564 and N510 respectively.
    Trading at the parallel market saw the naira exchanged at N470 to the dollar, while the Pound Sterling and the Euro traded at N560 and N510 respectively.
    Traders at the market express hope that the naira would see better days as Diaspora remittances was expected to boost liquidity at the yuletide season.

  • Naira appreciates against dollar at interbank market

    Naira appreciates against dollar at interbank market

    The naira on Wednesday appreciated against the dollar at the interbank, the News Agency of Nigeria (NAN) reports.

    The local currency closed at N316.24 to the dollar at the segment from N338.96 traded on Tuesday.

    At the Bureau De Change (BDC), the naira exchanged at N413, N530, and N460 against the dollar, pound sterling and the Euro, respectively.

    The naira, however, extended its losses at the parallel market, trading at N420, N535 and N461 against the dollar, Pound Sterling and the Euro, respectively.

    The naira was traded at N418, N531 and N461 to the dollar, pound sterling and Euro, respectively at the parallel market on Tuesday.

    Traders said that scarcity of foreign exchange was still taking toll on the market.

    Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON), said the dollar rate at the parallel market was unacceptable.

    “Evil forces at the market under the mask of speculators are profiting from the hike in the dollar rate.”