The Nation Newspaper

Tag: SMIS

  • CBN injects $311.5m, CNY15m into retail SMIS

    The Central Bank of Nigeria (CBN) on Friday made an intervention of $311.5 million in the retail Secondary Market Intervention Sales (SMIS) and CNY 15 million in the spot and short-tenored forwards segment of the inter-bank foreign market.

    The Director, Corporate Communications Department at the CBN, Isaac Okorafor, confirmed the latest injection, disclosing that “the dollar interventions were for customers in the agricultural, airlines, petroleum products and raw materials and machinery sectors, while the yuan component was for payment of renminbi denominated letters of credit for agriculture as well as raw materials”.

    Okorafor further said that the market continued to enjoy stability, owing to the regular interventions by the bank, which he said has also guaranteed a stable exchange rate for the Naira. He assured that the bank’s management would remain committed to ensuring that all the sectors of the forex market continue to enjoy access to the needed foreign exchange.

    Meanwhile, $1 exchanged for N357 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY1 exchanged at N47.

  • Retail SMIS attracts $289.76m, CNY 38.70m from CBN

    The Central Bank of Nigeria (CBN) has  injected  $289.76 million into the retail Secondary Market Intervention Sales (SMIS) and CNY38.70 million in the spot and short-tenored forwards segment of the inter-bank foreign exchange market.

    CBN’s Corporate Communications Director,  Isaac Okorafor, who confirmed the figures, noted that the dollar-denominated interventions were for transactions in the agricultural and raw materials sectors.

    On the spot and short-tenored sales in Chinese Yuan, he said they were similarly for payment of Renminbi denominated Letters of Credit for agriculture and raw materials based on bids received from authorised dealers.

    While reiterating the bank’s support for the inter-bank foreign exchange market, he disclosed that the apex bank’s management was pleased with the level of stability at both the Bureau-de-Change (BDC) and the Investors’ and Exporters’ (I&E) window of the foreign exchange market.

    According to him, the CBN was also satisfied with the implementation of the Bilateral Currency Swap Agreement (BCSA) with the Peoples Bank of China (PBoC), coupled with a recent inflow of about $2.8 billion Euro bond.

    Okorafor expressed confidence that the foreign exchange market in Nigeria will continue to enjoy stability in the coming months and beyond, given the marginal increase in the country’s external reserves.

    It will be recalled that the CBN last Tuesday, intervened in the wholesale, Small and Medium Enterprises (SMEs) and invisibles windows of the inter-bank foreign exchange market to the tune of $210 million.

    Meanwhile, $1 exchanged for N361 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY1 exchanged for N53.

    Nigerian banks are already counting their gains from the $2.5 billion currency swap deal.

    Analysts said the economies of both countries need each other, and so do their businesses and banks. The banks in both countries are not only earning fees from the ensuing transactions, but are beginning new lending to businesses.

    The analysts said these gains and the need to keep the naira stable prompted the CBN to sign the bilateral currency swap agreement with the People’s Bank of China (PBoC).

    In local currencies, the swap is worth 15 billion Renminbi (RMB) or N720 billion. The three-year renewable  deal  allows  for  the  direct exchange of RMB and naira for the purpose of trade and direct investment between both countries.

    According to the PBoC, the aim of the swap arrangement is to facilitate  bilateral  trade,  direct  investment,  and  safeguard financial market stability.

    The trade is reducing the demand for United States (US) dollar by Nigerians importing from China and consequently  strengthen  the  value  of  the  Naira.  The deal is also reducing  certain  barriers  for  Nigerian  importers  of  goods  from China   and   reduce   the   cost   of   transactions   in   multiple currencies.

  • Apex bank injects $331.22m, CNY 51.86m into retail SMIS

    The Central Bank of Nigeria (CBN) has continued its intervention in the retail Secondary Market Intervention Sales (SMIS) by injecting $331.22 million in that segment of the market, in addition to Chinese Yen (CNY) 51.86 million in the spot and short-tenored forwards segment.

    The figures obtained from the bank, revealed that the dollar-denominated interventions were for requests in the agricultural and raw materials sectors while the Yuan was for Renminbi denominated Letters of Credit.

    Confirming the figures, the CBN’s Director, Corporate Communications Department, Isaac Okorafor reiterated that the Bilateral Currency Swap Agreement (BCSA) with the Peoples’ Bank of China was achieving its major objectives of reducing the use and influence of a third currency transactions; reducing the pressure on the naira exchange rate; easing trade transactions between Nigeria and China and maintaining financial market stability in Nigeria.

    Okorafor further assured that the CBN would remain committed to ensuring that all the sectors of the foreign exchange market continue to enjoy access to the needed foreign exchange by Nigerians.

    It will be recalled that the bank on Tuesday, November 27, 2018 intervened in the inter-bank Foreign Exchange Market to the tune of $210 million.

    Meanwhile, $1 exchanged for N369 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.

  • CBN injects $318.03m, CNY 62.18m into SMIS

    The Central Bank of Nigeria (CBN) on Friday injected $318.03 million in the retail Secondary Market Intervention Sales (SMIS) of the inter-bank foreign market

    The CBN also offered CNY62.18 million in the spot and short-tenored forwards segment.

    The bank’s Director, Corporate Communications, Isaac Okorafor, while confirming the sales, reiterated that the retail SMIS were for requests in machineries, agricultural and raw materials sub-sectors, while the Chinese Yuan was for Renminbi denominated Letters of Credit.

  • Forex: CBN boosts retail SMIS with $343.06m

    The Central Bank of Nigeria (CBN) yesterday intervened in the Retail Secondary Market Intervention Sales (SMIS) $343.06 million injection.

    Figures obtained from the apex bank showed that the amount released was for requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

    CBN Acting Director, Corporate Communications, Isaac Okorafor confirmed the figures and noted thatthe continued intervention were in line with the assurances made by the Governor, Godwin Emefiele, to sustain market liquidity in order to boost production and trade and maintain stability in the forex market.

    Speaking further, Okorafor assured that the CBN remained very committed to ensuring that all the sectors continue to enjoy access to the foreign exchange required for the business concerns.

    It will be recalled that on Tuesday, this week, the Bank injected the sum of $210 million into the inter-bank Foreign Exchange Market. Meanwhile, the naira exchanged at N362/$1 in the BDC segment of the market on Thursday, June 14, 2018.

     

  • CBN lifts retail SMIS with $293m foreign exchange injection

    The Central Bank of Nigeria (CBN) at the weekend lifted the Retail Secondary Market Intervention Sales (SMIS) of the inter-bank Foreign Exchange Market with the sum of $293 million.

    A statement from the bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, confirming the figures, indicated that the sum, as in previous interventions, was in favour of interests in the agriculture, airlines, petroleum products, raw materials and machinery sectors.

    He reiterated that the objective of the CBN intervention in the foreign exchange market has remained ensuring liquidity in the foreign exchange market and enhance production activities.

    He explained that the CBN will continue to ensure liquidity in the interbank sector of the market as well as sustain its interventions in order to drive economic growth and guarantee market stability.

    Meanwhile, the naira remained stable and exchanged for N361/$1 in the BDC segment of the market on Friday, May 18.

    The naira had been relatively stable at 360 to the dollar for months after the CBN in April 2017 liberalised trade in the currency for investors as it emerged from a currency crisis and recession brought on by low oil prices that also slashed government revenues.

    The CBN then introduced a multiple exchange rate regime to closely manage dollar demand as a way to alleviate chronic dollar shortages. Part of the latest shortage of dollars was due to offshore funds dumping Nigerian bonds following a fall in yields and multinationals repatriating their dividends.

    Forex traders also said the CBN has reduced its issuance of open market bills and lowered the interest rates it offered, signaling a more dovish stance on interest rates that nevertheless makes the currency less attractive for foreign investors.

    This shift at the CBN comes after the government paid off some of its treasury bills rather than rolling them over as it has done in the past, in a move to lower its borrowing costs. This has made investors pull funds away from Nigerian fixed income securities, which coupled with firms repatriating dividends abroad, put pressure on the currency market.

     

    In one example of the currency pressure from dividends, the Nigerian unit of South Africa’s MTN declared a dividend of 50 billion naira in 2017 and paid a further dividend in the first quarter, which it said it would repatriate to offshore investors – meaning it would sell that amount of naira.

     

    On the official market the naira is quoted at around 305 per dollar, where it has been for over a year, supported by regular central bank interventions. One lender traded the currency at 314.50 naira on Thursday.

     

  • Apex bank boosts retail SMIS with $396.18m forex injection

    The Central Bank of Nigeria (CBN) has intervened in the Retail Secondary Market Intervention Sales (SMIS) segment of the market with the injection of $396.18 million.

    The forex intervention is to boost liquidity in the foreign exchange market and make the greenback available to key segments of the economy.

    According to figures obtained from the CBN at the weekend, the released fund is meant to meet obligations in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

    Confirming the figures, CBN’s Acting Director, Corporate Communications Department, Isaac Okorafor said interventions by the CBN in both the retail and wholesale sectors of the forex market were targeted primarily at ensuring liquidity in the market as well as encouraging production and trade, particularly now that the focus was on the promotion of local content.

    Okorafor explained that with the country’s reserves nearing $50 billion, the bank is determined to sustain the gains recorded through the various policy options taken in the course of stemming the depletion of the external reserves and steering Nigeria out of recession.

    Beyond ensuring liquidity in the inter-bank sector of the market, the CBN spokesman said the apex bank was committed to supporting efforts aimed at growing the economy and further diversifying it away from oil.

    Despite Naira exchange rates closing at N362/$1 on Friday, Okorafor insisted that the market would remain stable and that the bank would ensure it maintains the country’s external reserves to safeguard the international value of the naira.

     

  • Forex: CBN opens week with $195m ahead of MPC decisions

    Forex: CBN opens week with $195m ahead of MPC decisions

    The Central Bank of Nigeria (CBN) on Monday boosted the Foreign Exchange (Forex) market by offering a 195 million dollars in three segments of the Forex market.

    The acting Director of Corporate Communications, Mr Isaac Okorafor, in a statement, said it auctioned 100 million dollars at the wholesale Secondary Market Intervention Sales (SMIS) window of the inter-bank Foreign Exchange market.

    He said that the apex bank also intervened in the Small and Medium Enterprises (SMEs) and invisible segments, with 50 million dollars and 45 million dollars.

    Okorafor reiterated that the Bank’s intervention was to maintain its commitment to sustain liquidity in the market to meet genuine requests as well as deepen flexibility in the foreign exchange market.

    He said the CBN would continue to work on achieving the objective of convergence of rates in the various segments of the market, and would continue to strive that the forex market guaranteed transparency in the sale of foreign exchange.

    Okorafor said only last week, the CBN threatened to sanction any Deposit Money Bank (DMB) in breach of its earlier directive of March 3.

    The directive instructed them to, among other things, open teller points for retail Forex transactions and to have electronic display boards in all their branches, showing rates of all trading currencies.

    He said the bank’s firm position was to reiterate its commitment to ensure liquidity in the foreign exchange market, where all genuine requests would be met in line with extant forex guidelines, noting that it would foster more transparency and make the public become aware that the facilities existed.

    This week’s intervention is significant, coming in the midst of the Monetary Policy Committee Meeting taking place on Monday and Tuesday.

    Monday’s sale follows the major intervention, last week, to the tune of 545 million dollars as the retail Secondary Market Intervention Sales (SMIS) received the largest intervention of 285 million dollars.

    Other segments include the 100 million dollars offered for wholesale SMIS, 90 million dollars for Small and Medium Enterprises (SMEs) window and 70 million dollars for invisibles such as Basic Travel Allowances, tuition fees and medical payments.

    Meanwhile the Naira closed at N363 to a dollar, N485 to the Pound Sterling and N433 to one Euro at the parallel market.

  • CBN auctions $185.86m in Retail SMIS

    CBN auctions $185.86m in Retail SMIS

    Following The Central Bank of Nigeria (CBN) yestrday auctioned $185.86 million at the retail Secondary Market Intervention Sales (SMIS).

    The excercise followed Tuesday’s assurances by the CBN Governor, Godwin Emefiele, that the apex bank will continue to intervene in the foreign exchange market.

    CBN’s Acting Director in charge of Corporate Communications, Isaac Okorafor, while confirming the sale, said that out of the auctioned amount, only $3.14 million was sold as spots, while the sum of $182.72 million was sold as forwards.

    Okorafor further explained that the overall picture of the inter-bank forex market was that of optimism, going by the level of access now being enjoyed by different categories of customers in both the wholesale and retail segments of the market.

    It will be recalled that  Emefiele, while assuring Nigerians of the imminent end of the current recession in 2017, at the end of his meeting with the leadership of the Senate on Tuesday, declared that the bank will continue its relentless intervention in the forex market.

    Emefiele hinged the optimism of the apex bank on the accretion to the country’s foreign reserve, which he said currently hovered above the $31 billion mark.

    According to him, “our reserves stand at above $31 billion and that provides us enough of firepower or ammunition to be able to defend the currency, and we will do so with all intensity to ensure that foreign exchange is procured by everybody”.

    He further reiterated the bank’s assurance to all shades of genuine customers that the CBN would provide them the needed foreign exchange to meet their legitimate needs, stressing that the new forex window opened by the apex bank last week aimed at encouraging foreign investors in the country’s forex market.