• Dangote, Total, Honeywell, 9 Others Get 30% of $367m Special Forex Sale

Twelve firms bought 30 per cent of the special foreign exchange sales of $367 million conducted by the Central Bank of Nigeria (CBN) on March 2nd, 2017.

The firms are Dangote Sugar Refinery Plc, De-United Food Plc, AMCON/MRS, Total Nigeria Limited and Honeywell Flour Mills Plc. The others are Dangote Cement Plc, MINL Limited, Forte Oil, Conoil PLC, Rahamanniya Oil & Gas, Seven Up Plc and Bua Sugar. The 12 firms altogether bought $101.33 million during the special dollar sale.

The CBN disclosed this in the result of the Secondary Market Intervention Sale (SMIS) conducted on March 2nd 2017 posted on its website yesterday. Under the new foreign exchange regime, the CBN occasionally conducts SMIS to clear backlog of matured foreign exchange obligations.

The result of the SMIS conducted on March 2nd, shows that the apex bank sold $367 million to 950 firms through their banks.

The result indicated that the amount sold by the apex bank was 282 per cent higher than the $95.9 million sold to 567 firms during the previous SMIS conducted on February 28th.

Leading the top five beneficiaries is Dangote Sugar Refinery Plc, which bought $25.55 million to import raw sugar. It was followed by De-United Food Plc, which bought $9.6 million to import wheat, seasoning materials and packaging materials. Asset Management Corporation of Nigeria (AMCON) also purchased $9.6 million on behalf of MRS Oil Plc to import petroleum products, while Total Nigeria Plc purchased $8.6 million to import petrol and base oil. Honeywell Flour Mills Honeywell Flour Mills Plc on its part purchased $8 million to import wheat.

These were followed by Dangote Cement Plc-$7.5 million, MINL Limited-$6.7 million, Forte Oil- $6 million, Conoil Plc-$5.4 million, Rahamanniya Oil & Gas-$5.4 million, Seven Up Plc-$4.73 million, Bua Sugar-$4.5 million.

CBN sustain intervention with $100m

Meanwhile the CBN yesterday continued its intervention in the foreign exchange market, by selling $100 million in the forwards, to be delivered within next 60 days.

Confirming this development, Acting Director of Corporate Communications at the CBN, mr. Isaac Okorafor said: “The Central Bank of Nigeria (CBN) on Thursday, March 23, 2017 offered the sum of $100 million to meet the requests of wholesale customers, out of which $91 million was taken, indicating greater apprehension among dealers who anticipate a further crash of the dollar in the FOREX market.

The dealers will have value for their respective bids on Friday, March 24, 2017.” While further disclosing that the highest and marginal bid rates were N330/$1 and N320/$1, respectively, Okorafor said no intervention was made by the Bank to meet requests for invisibles on Thursday.

Since Monday February 20th 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has injected $2.27 billion by intervening in the forex market 12 times as follows: Tuesday February 21st, $417 million; Thursday February 23rd, $231 million; Monday February 27th, $180 million; Friday March 3, $350 million; Monday March 6, N367 million; Tuesday March 7, $100 million; Thursday March 9, $170 million; Tuesday March 14, $190 million; Wednesday March 14, $150 million; Thursday March 16, $100 million, Monday March 20, $143 million and Thursday March 23rd, $100 million.

The CBN Governor, Mr. Godwin Emefiele on Tuesday had vowed that the apex bank would sustain its intervention in the foreign exchange market.

Addressing the press after the Monetary Policy Committee (MPC) meeting on Tuesday, Emefiele warned that those doubting CBN’s ability to sustain the programme would be the losers as, according to him, the rates were already converging.

He said, “We have seen the foreign exchange rates now converging and we are strongly optimistic that the rates will converge further.

“In terms of sustainability, it is important for us to state at this point that reserves are trending upwards, close to $31 billion and the fact that we have done this consistently up to four to five weeks should tell everybody or those who doubt the strength of the CBN to sustain this policy that we are able.

“It remains for me to say that they are taking a risk and are on the wrong side of the bet, given the direction that we are coming from.
“There is a determination to see to the convergence of those rates. And with what we have seen so far, we are very optimistic that those rates will converge.

And all the elements on the foreign exchange market will no doubt be implemented. It is a programme and I am happy to say that that programme is on course. We are happy that it is looking good beyond our expectations and those who remain on the sidelines doubting CBN’s ability to sustain this intervention are on the wrong side of the bet.”

Reacting to the fresh push to cut the powers of the CBN by the National Assembly, Mr. Emefiele said he expected the federal law makers to take decision on the apex of the nation based on international best practices and in the interest of the nation’s economy.

His words, “I have always said that the powers to make or to amend laws rest with the National Assembly. But I am very optimistic that the National Assembly, in an attempt to either make, abrogates or amends the law will in their wisdom, use international best practice, in an attempt to determine the course of action, not just for the CBN but also for the Nigerian economy.”

“It remains for me to say that they are taking a risk and are on the wrong side of the bet, given the direction that we are coming from.

“There is a determination to see to the convergence of those rates. And with what we have seen so far, we are very optimistic that those rates will converge.

And all the elements on the foreign exchange market will no doubt be implemented. It is a programme and I am happy to say that that programme is on course. We are happy that it is looking good beyond our expectations and those who remain on the sidelines doubting CBN’s ability to sustain this intervention are on the wrong side of the bet.”

Reacting to the fresh push to cut the powers of the CBN by the National Assembly, Mr. Emefiele said he expected the federal law makers to take decision on the apex of the nation based on international best practices and in the interest of the nation’s economy.

His words, “I have always said that the powers to make or to amend laws rest with the National Assembly. But I am very optimistic that the National Assembly, in an attempt to either make, abrogates or amends the law will in their wisdom, use international best practice, in an attempt to determine the course of action, not just for the CBN but also for the Nigerian economy.”