Nigeria’s Foreign Reserves Hit 19-Month High

 Nigeria’s foreign exchange reserves rose to $30.8bn in April, the highest level since September 2015.

The increase could be attributed to a recent rise in global crude oil price, and proceeds of the country’s Eurobond, issued in march.

Data from the Central Bank shows that Nigeria’s forex reserves, stood at $30.31bn, a month ago.

The country’s reserves have risen 18.1 per cent since the start of the year, but are still far off the peak of $64bn, achieved in august, 2008.

The reserves had in March hit the $30bn mark for the second time since President Muhammadu Buhari assumed office in May.

The reserves have experienced a steady day-on-day increase of between 2.30 and 2.75 per cent since January 5, 2017.

The last time the reserves crossed the $30bn mark was in July 2015 before it began to decline.

The reserves were affected by low crude oil prices across the world, which reduced the availability of foreign exchange and in turn, put pressure on the naira.

A production cut agreement between OPEC and non-OPEC members have since led to an upsurge in crude oil prices, which in turn have benefitted the reserves.

Since February 2017, the Central Bank of Nigeria, has been providing foreign exchange to banks to meet the tuition, travel and medical needs of customers, thereby reducing the pressure on the naira.

CBN Denies Review Of Foreign Exchange Law

forex, CBN, bureau de change, exchange rate, Central bankThe Central Bank of Nigeria (CBN) has denied plans to amend the Foreign Exchange Act.

In a statement, the regulator says it remains committed to safeguarding the international value of the country’s legal tender.

It added that the plans of a 20% fine for any holder and confiscation of funds in domiciliary accounts of individuals is not true.

The news broke over the weekend that the federal government and the CBN were planning to stem volatility in the foreign exchange market with such plans.

The Nigerian Senate on Monday expressed surprise at the recommendation which was made by the Nigerian Law Reform Commission.

The commission recommended a review of the Nigerian Foreign Exchange Act to accommodate punishment for persons holding on to foreign currency.

The commission wants the law to empower the the Central Bank of Nigeria to jail people for up to two years or fine them for 20% of the amount of the foreign currency held in their possession for more than 30 days.

But the Senate’s through its spokesperson, Senator Aliyu Abdullahi, stated that the measure was disruptive and counter-productive and would undermine many of the reform efforts already underway in the legislature and by government ministries intended to boost investors’ confidence.

The proposed changes are said to be intended to help control capital flows and prevent foreign exchange from being taken out of Nigeria.

Obiano Meets Industrialists, Seeks Solution To Recession

Obiano Meets Industrialists, Seeks Solution To RecessionGovernor Willie Obiano of Anambra state says his administration is committed to supporting manufacturers in the state to flourish and have their businesses expanded in spite of the current economic recession.

The Governor disclosed this during an interactive meeting with members of the Manufacturers Association of Nigeria (MAN) and the three branches of the Chambers of Commerce in the state at the Governor’s Lodge, Amawbia.

The Governor stated that the manufacturers and importers are the key drivers of the economy because their activities create employment and generate money in the economic system.

He expressed regret over the present economic recession and how it has taken its toll on the private sector. The meeting was to identify those problems and see how both the state and federal government can ensure that businesses remain viable.

He intimated them that the Vice President would be visiting the state soon and he plans to identify the challenges facing the manufacturers, articulate them and present them to the Vice President when he visits.

He added that his meeting with the businessmen ahead of this visit would ensure that they speak with one voice on what areas the federal government will intervene as the Vice President plans to also meet with the business community.

Present at the meeting, were some members of the state executive council, and over 60 members of the business community.

The state’s Commissioner for Finance and Development Partners, Mr Ifeatu Onejeme, said that the Obiano administration has distinguished itself in matters concerning the welfare of every organization in the state through genuine commitment to addressing challenges bordering on the well-being of the people.

He also noted that the economic and business policies of the present government will have far reaching positive impact on the economy of the state in future.

In their various remarks, the industrialists noted high cost and scarcity of raw materials which leads to poor production, high dollar exchange rate, and epileptic power supply as major challenges.

One of the leaders of the association, Mr Paul Okonkwo, identified the dredging of the River Niger and compensation to the industrialists for the 2012 flood that destroyed a lot of factories at the Industrial Layout as great steps in the right direction.

He recalled that the past government of former President Jonathan raised up to 56 million naira for them but more needs to be done.

The industrialists also urged the federal government to create a window for subsidized exchange rate for the business class as that is a more urgent need.

CBN Raises BDC Exchange Rate To N385 Per Dollar

forex, CBN, bureau de change, exchange rate, Central bankThe Central Bank of Nigeria has raised the exchange rate for bureau de change operators to 385 naira per dollar.

This move is to encourage Nigerians in diaspora to use official channels to transfer earnings back home.

Prior to the announcement, the CBN allows BDCs to buy at 375 naira per dollar and sell at 381 naira per dollar.

In the meantime, the naira appreciated at the interbank foreign exchange market in response to intervention by the CBN.

The regulator sold 1.5 million dollars to stabilize the interbank exchange rate.

The local currency appreciated to 305 naira 5 kobo at the interbank and 455 naira to the greenback at the parallel market.

Meanwhile the CBN is also expected to license 20 new international money transfer operators in the coming weeks to handle an estimated 21 billion dollars annual diaspora remittances into the country.

This is part of efforts to stabilise the foreign exchange market.

The President of the Bureau De Change Operators of Nigeria, Mr Aminu Gwadabe, believes the CBN’s policy on IMTOs will boost diaspora cash inflow into the country and force the dollar rates against the naira down.

The CBN had in August 31, licensed 11 IMTOs in addition to Western Union, Moneygram and RIA, which were earlier cleared by the regulator.

CBN Resolves To Clear All Backlog of Forex Demand In The Country

forex, CBNThe Central Bank of Nigeria has resolved to clear all the backlog of forex demand of about 5 billion dollars in the country through spot and forward settlements.

According to a statement released by the Acting Director, Corporate Communications of the Central Bank, Mr Issac Okoroafor, the move is to engender confidence, ensure credible price formation and sustain the integrity of the Nigerian inter-bank FX market.

This comes as the new flexible forex trading begins on Monday.

The Central Bank of Nigeria (CBN) had released the highlights of the much awaited flexible foreign exchange market policy on Wednesday, June 15, weeks after the Monetary Policy Committee announced the introduction of the policy.

After its meeting of May 24, the CBN said the policy would allow the bank retain a small portion of foreign exchange for critical transactions.

Key notes released stated that the market would operate as a single market structure via the interbank market and authorised dealers and that it would be purely an exchange rate market managed via Thompson Reuters platform.

Part of the key notes is that the CBN would participate via periodic intervention and would introduce primary dealers that deal with the CBN on a two way quote basis.

The primary dealers are also expected to deal with other players in the interbank market.

Interbank Trading Of Foreign Exchange Expected To Begin In Nigeria

forexInterbank trading of foreign exchange is expected to begin on Monday in Nigeria, as contained in the highlights of the new flexible foreign exchange market policy released by the Central Bank.

Tenors and rates for Over The Counter (OTC) settled forex feature is also expected to be announced later in the day by the apex bank.

Highlights Of The Policy 

The Central Bank of Nigeria (CBN) released the highlights of the much awaited flexible foreign exchange market policy on Wednesday, weeks after the Monetary Policy Committee announced the introduction of the policy.

After its meeting of May 24, the CBN said the policy would allow the bank retain a small portion of foreign exchange for critical transactions.

Key notes released stated that the market would operate as a single market structure via the interbank market and authorised dealers and that it would be purely an exchange rate market managed via Thompson Reuters platform.

Part of the key notes is that the CBN would participate via periodic intervention and would introduce primary dealers that deal with the CBN on a two way quote basis.

The primary dealers are also expected to deal with other players in the interbank market.

Other aspects of the key notes are that there shall be no pre-determined spreads on forex transactions and all forex purchases shall be transferable while 41 items shall remain inadmissible in the forex market for forex transactions.

The CBN will also offer long term forex futures and sales of forex forwards for end users must be trade-backed.

The non-deliverable OTC forex settled trades will help moderate volatility. The OTC settled forex feature shall be on non-standardised amounts, the apex bank said.

Another aspect of the key notes states that proceeds of forex shall be purchased by authorised dealers at the daily interbank rates.

The new police which the CBN said was a market-driven trading system, is expected to end the central bank’s 16 month fixed exchange rate policy.

After the highlights were released, Nigeria’s capital market made remarkable gains, with most stocks appreciating in price.

No Need To Panic

One of the leading global rating agencies, Fitch Ratings had welcomed the decision of the apex bank, saying that the shift to a more flexible foreign-exchange regime could aid Nigeria to adjust to lower oil prices and support growth.

It however, warned that the implementation of the new forex policy may present challenges if not properly managed.

Fitch explained that establishing the new framework’s credibility would be key to its effectiveness in attracting portfolio flows and Foreign Direct Investments (FDIs) to make up for lower oil export receipts.

Meanwhile, the CBN Governor, Godwin Emefiele, has reiterated that there was no need for businesses and investors to panic over the new forex policy, saying it will help address the imbalance in the economy.

Monetary Policy Committee Leaves Rates Unchanged

MPC, Central Bank, monetary policy, exchange rateThe Central Bank of Nigeria has decided to introduce a flexible exchange rate policy as it continues to monitor developments in the economy.

This announcement was made on Tuesday by the CBN Governor, Godwin Emefiele at the end of the two day rate setting meeting by the Monetary Policy Committee in Abuja, the nation’s capital which has been described as the most anticipated meeting.

According to Mr Emefiele, the Monetary Policy Rate will maintain status quo at 12%, Cash Reserve Requirement at 22.5%, Liquidity Ratio at 30% and maintain asymmetric corridor of +200/–500 basis points around the midpoint of the MPR.

Sales Managers Index: Nigeria Continues To Drop

Sales Managers IndexNigeria’s inflationary pressures intensified in the month of March, pushing all five parameters of the Sales Managers Index to a 12-month low.

A new set of data released on Monday by the London-based World Economics shows Nigeria’s Business Confidence Index down for the seventh consecutive month, reaching the lowest level in a year.

Businesses in the survey commented on poor consumer demand, rising unemployment, high inflation, lower oil prices and difficult exchange rate conditions.

The Market Growth Index measured by the report also shows fifth consecutive decline and the lowest since March 2015.

The Product Sales Index falls first time in 12 months as managers point to general rise in prices charged for products and services.

At the employment level in the first quarter of 2016, the staffing index fell below the 50.0 no-change mark for the first time, as companies comment on staff rationing as part of cost-cutting measures at lower level of employment.

Human Rights Lawyer, Falana, Sues CBN Over Exchange Rate

Femi-FalanaHuman rights lawyer, Mr. Femi Falana (SAN), has asked the Federal High Court sitting in Abuja to restrain the Central Bank of Nigeria (CBN) from allowing market forces to determine the exchange rate of the naira.

The Senior Advocate of Nigeria also asked the court to direct the CBN to stop the use of the United States dollar as a legal tender in Nigeria.

The suit was filed on Wednesday, 24 February 2016 and is yet to be assigned to a judge for hearing.

In the suit, Mr Falana, alleged that the CBN’s monetary policy had led to a situation where too much naira was made to chase a few dollars with an attendant weaker naira and adverse multiplier effects such as rising inflation, closure of factories and high level of unemployment.

He also alleged that the CBN had so “dollarised the economy” that the foreign currency had now become legal tender with school fees and rents now being charged and paid in dollars to the detriment of the economy.

The Senior Advocate wants the court to make a declaration that by virtue of Section 16 of the CBN Act 2007, the CBN shall fix and determine the exchange rate of the naira by a suitable mechanism devised for that purpose.

CBN Adds To Forex Prohibition List             

forexThe Central Bank of Nigeria (CBN) has added overseas school fees and medical tourism to its list of items prohibited from the interbank foreign exchange window.

This brings the items on the forex prohibition list to 43 in number.

On Thursday, Governor Adams Oshiomhole of Edo State recommended the addition of the two items to the list.

He was speaking at the Cable Newspaper colloquium in Lagos.

In reaction to the development, the naira has hit a record low of 325 to the dollar while the pound trades for 450.

This follows shortage of foreign exchange caused by importers scrambling for the greenback to meet their obligations overseas.

While traders expect the naira to weaken further in coming days, the CBN official exchange rate has remain unchanged at 197 naira to the dollar.

CBN Raises Concerns Over Economy’s Partial Dollarisation

CBN Governor, Mr Godwin Emefiele
CBN Governor, Mr Godwin Emefiele

The Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, has raised concerns over the partial dollarisation of the nation’s currency and called on commercial banks in the country to take appropriate measures to check the trend.

Responding to questions from reporters after the Monetary Policy Committee meeting in Abuja, Mr Emefiele said that the apex bank may also be left with no option than to clamp down on the activities of Nigerians who insist on doing transactions with foreign currencies.

He, however, expressed optimism that the naira would rebound after the elections.

Meanwhile, the Monetary Policy Committee meeting left the interest rate unchanged at 13% while ‎liquidity ratio was pegged at 30%.

CBN, SEC To Revamp Capital Market

Capital marketThe Securities and Exchange Commission and the Central Bank of Nigeria have announced plans to jointly revive the capital market and the Nigerian economy in general.

This is coming on the heels of the decline in the price of crude oil in international market and the continued downward slide of the exchange rate of the naira, and the need to seek other avenues for funding the economy.

This was part of the outcome of a meeting between the Deputy Governor of CBN, Dr. Okwu Joseph Nnana and the Management of the SEC, led by the Acting Director-General, Mounir Gwarzo, in Abuja.

Gwarzo described the collaboration as timely especially given the difficulties being experienced in the economy at the moment and hoped that both regulators would work towards the goal and resolve current issues.