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CBN Set for Second Sale of Chinese Yuan

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  • CBN Set for Second Sale of Chinese Yuan

The Central Bank of Nigeria, on Friday, asked lenders to submit bids for the Chinese yuan in its second auction of the currency after it agreed a swap with the People’s Bank of China in May, traders said.

But importers said they were yet to access the yuan weeks after the apex bank commenced the sale of the currency.

The CBN flagged off its intervention in the sale of foreign exchange in the yuan on July 20, pursuant to the Bilateral Currency Swap Agreement signed with the People’s Bank of China on April 27, 2018.

The CBN signed a $2.5bn three-year currency swap deal with Beijing in May, to facilitate trade between the two countries and cut reliance on the dollar.

It sold 69.86 million yuan ($10.16m) in its first auction of the Chinese currency two weeks ago at a range of N49 to N51, Reuters reported.

According to Reuters, dollar liquidity has been shrinking as a result of capital reversals after the United States central bank started to raise interest rates this year.

Concerns over political risk in the run-up to next year’s presidential election, where incumbent President Muhammadu Buhari will seek re-election, and falling yields on government treasuries have reportedly deterred inflows.

The auction is part of efforts to encourage the use of an alternative trading currency to the US dollar, especially as Nigeria imports heavily from China.

Traders said bids at the auction must be backed by customer invoices and the exchange rate would be determined via a book-building process.

They said the CBN also planned to auction the US currency on Friday.

The naira, which is traded over the telephone, has been quoted at a range of 362 to 363 per dollar.

Traders were quoted as saying that it could ease to 364 next week owing to tight liquidity on the interbank market.

The unit is quoted at around 306 per dollar on the official market, supported by central bank’s regular intervention.

Meanwhile, importers have claimed they are yet to access the yuan.

The apex bank was reported to have said that the sales would be through a combination of spot and short tenured forwards.

It added that the exercise, which would be Special Secondary Market Intervention Sales retail, would be dedicated to the payment of Renminbi-denominated Letters of Credit for raw materials and machinery and agriculture.

The President, Lagos Chamber of Commerce and Industry, Mr Babatunde Ruwase, said he had ordered some items from China and was informed that he could buy with the yuan.

“I told them to get yuan, but they said it was not available yet,” he said.

Other importers said they had not yet accessed the currency at the interbank foreign exchange window.

The Director-General, Lagos Chamber of Commerce, Mr Muda Yusuf, confirmed to our correspondent that people had started issuing Letters of Credit to access the yuan.

But the Zonal Coordinator, Save Nigeria Freight Forwarders, Dr Osita Chukwu, told our correspondent that for importers who had transactions to complete, the time they had to wait for the currency was too long.

He said, “Among importers and others who buy goods from China, there has not been any information as to where to access the yuan. We have not even had a stakeholders’ meeting to discuss it.

“For now, we are still conducting our transactions in dollars or yuan bought from the black market.”

The yuan currently exchanges for N52/CNY on the black market. This represents a 3.70 per cent decrease from the exchange rate of August 1, which was N54/CNY, according to dealers. The currency trades N44.37/CNY officially.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

CIBN, NIBSS Introduce e-Payment Certification Programmes

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CIBN, NIBSS Introduce e-Payment Certification Programmes

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with Nigerian Interbank Settlement Systems Plc (NIBSS) have introduced professional certification programmes on electronic payments for financial service providers and institutions.

Both organisations disclosed that the programme was designed to enhance the electronic payment skills and knowledge of financial practitioners in order to equip them with efficient tools and information required to upscale innovation and services.

Speaking to journalists at a media briefing in Lagos, yesterday, the Chief Executive Officer, Chartered Institute of Bankers of Nigeria, Mr. Seye Awojobi, said the initiative is an international programme, well grounded in the local realities of the Nigerian e-payment industry and captures the current dynamics, as well as aspects of digital financial services practices.

“This programme would set the standards for e-payment expertise in Nigeria; foster a category of high performing professionals in the industry and build a resilient, safe and secured payment technology driven platform.

“The curriculum for the programme adequately covers recent methods required, which are in line with global practices.

“The introduction of the scheme cannot be more timely than now considering the COVID-19 pandemic, which created serious disruptions in our professional and personal lives,” he added.

On his part, Chief Executive Officer, Nigerian Inter-Bank Settlement Systems Plc, Premier Oiwoh explained that the introduction of the programme would determine the capacity and work experience criteria required to recognise beginners, intermediate and advanced.

“It would create a growth roadmap for fledging e-payment workers, including the unemployed who has the desire to make a career in the electronic sector.

“Also, it would enable us continue to tackle the issue of insecurity within the financial technology payment and banking space,” he added.

The institutions also noted that in order to maintain a certification credential, the practitioners must earn some recertification credits over a three year span and valid for three years after it has been issued.

The CIBN last week has reintroduced its mentoring scheme. The initiatives aims at up-scaling the leadership capacity and productivity of workers within the financial and banking sector.

Speaking during the virtual forum, Director General, Securities and Exchange Commission, Lamido Yuguda, had explained that mentoring schemes are essential for the sustenance and development of the sector as it is built upon values such as trust and professionalism.

“These values can be taught. But are reinforced when practiced by the senior co-workers and emulated by junior colleagues. Such initiatives enable workers to avoid being distracted by the material, prestigious and monetary incentives the space presents.

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Finance

Stanbic IBTC Offers Low-Interest Agric Loans

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Stanbic IBTC Bank

Stanbic IBTC Offers Low-Interest Agric Loans

Stanbic IBTC Bank Plc has reaffirmed its commitment to the growth of Nigeria’s agriculture sector by supporting farmers and other players in the agricultural value chain.

As the demands on agribusinesses change seasonally, the financial institution provides financing solutions for agricultural enterprises to suit their requirements.

A statement explained that the needs range from availability of resources, to farming equipment, as well as enhancement of seasonal cashflow, amongst others.

Stanbic IBTC Bank offers various low-interest credit facilities across the agricultural sector that will help clients to cushion the impacts of the Covid-19 pandemic.

Speaking on this, Head, Agribusiness, Stanbic IBTC Bank, Wole Oshin, said the agribusiness financial solution was geared towards ensuring that players in the agriculture space are not hindered by lack of finance.

He said: “The bank’s suite of agribusiness solutions minimises risks, ensures maximum control and optimises profits associated with international trade by making transactions smoother, simpler and safer for all parties involved.

“Some benefits of the Stanbic IBTC Agribusiness Finance include: availability of gap-funding for unforeseen financial needs, maintenance of cash flow and flexibility of repayment terms based on the type of funding. This facility is also versatile and can be utilised for funding resources, vehicles and farming equipment.”

Oshin noted that agricultural enterprises could access overdraft to finance their short-term cash flow and working capital needs.

“With quick and flexible processes, funds are available when needed and interest is paid only on funds utilised, not on the full amount on which the limit is set,” he added.

He further reiterated that the asset finance solution could aid in the financing of all farming vehicle and implement needs, with a wide range of packages to suit business’ cash flow and tax requirements.

“Vehicles and assets such as tractors, harvesters, irrigation equipment and so on, to enhance production,” he said.

Other available facilities are Business Revolving Credit Loan, Agricultural Production Loan and Medium-Term Finance.

These are suitable for grain farmers, individual farmers, groups and entities in the agricultural sector. Our loans are designed to accommodate the purchase of various agricultural inputs (like seeds, fertilizers etc), livestock, agriculture-related products and asset acquisition.

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

FMDQ Securities Exchange has registered the Parthian Partners Limited N20 billion Commercial Paper (CP) Programme to its platform as part of its efforts to assist corporates access funds from the debt capital market (DCM).

The DCM has continued to witness significant activity among corporates seeking a viable avenue to raise capital to meet their financing needs.

According to the FMDQ, the registration of the CP programme strategically positions Parthian Partners Limited to raise short-term finance from the DCM with speed at a time in the future when it determines suitable, through CP issues within the CP Programme limit.

Parthian Partners provides competitive wholesale brokerage services in the African over-the-counter (OTC) markets, and trades in Federal Government of Nigeria (FGN)bonds and treasury bills, state government bonds, local contractor bonds, orporate bonds and eurobonds, providing regular market updates and liaising with market participants and regulators in the African markets to provide independent research on the African fixed income market.

FMDQ said in support of the growth and revitalisation of the Nigerian economy, it championed the resuscitation of the CP market to provide corporate and commercial businesses with the opportunity to meet their short-term funding requirements, whilst building their profiles within the Nigerian DCM.

“In addition to its commendable and efficient registration process, FMDQ Exchange, through its quotation service, will provide stakeholders and market participants with credible and real-time information as part of the exchange’s commitment to facilitate transparency in the fixed income market space,” it said.

Meanwhile, trading in the equities market closed in the green yesterday following buying interest in Zenith Bank Plc (+4.8 per cent), Flour Mills of Nigeria Plc (+6.2 per cent) and Guaranty Trust Bank Plc(+0.8 per cent). As a result, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.03 per cent to close at 40,164.86.

Zenith Bank Plc yesterday released its audited results for the year ended December 31, 2020, announcing a profit before tax (PBT) of N243.294 billion, up from N255.861 billion. Profit after tax (PAT) rose by 10.4 per cent to N230.565 billion from N208.843 billion in 2019.

Trading activity improved as volume and value advanced 16.8 per cent and 7.6 per cent to 338.0 million shares and N3.8 billion respectively. The most traded stocks by volume were FBN Holdings Plc (64.6 million shares), Zenith Bank (52.7 million shares) and Transcorp (42.0 million shares).

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