- Economic Slowdown: ECB Lowers Growth Projection for 2019
Growing uncertainty in the Euro-area has forced the European Central Bank to lower its 2019 growth projection and increased bank stimulus in an effort to boost growth in the region.
The ECB lowered growth forecast from 1.7 per cent predicted three months ago to 1.1 per cent, saying the region’s economic slowdown was bigger than previously estimated.
The central bank announced another loan assistance package for banks and planned to extend existing stimulus.
Mario Draghi, the President, ECB, explained that growing protectionism across the world and uncertainties from emerging economies are hurting growth in the Euro-area.
“The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment,” Draghi told journalists in Frankfurt on Thursday. “The risks surrounding the euro area growth outlook are still tilted to the downside.”
However, the economic slowdown in the Euro-area run deeper than just protectionism, business sentiment has plunged in recent months as businesses and investors were uncertain regarding Brexit negotiations. The region’s largest economy, Germany, grew at its slowest rate in five years in 2018, down from 2.2 per cent in 2017 to 1.5 per cent and narrowly escaped recession despite ECB assuring businesses of strong economic recovery and promising to start balance sheet normalization in 2019.
That has now changed as the same ECB has started adding to stimulus and admitted its projections were slightly off.
Also, the inability of the region to reach an agreement with the European Union on Brexit is weighing on business decisions. For instance, Germany and the United Kingdom alone trade about €200 billion worth of goods per annum, putting businesses that built their revenue around exports and imports from the United Kingdom in an uncertain situation regarding their business or future investment.
In Italy it is not different, Europe’s fourth-largest economy plunged into recession in the final quarter of 2018 and 2019 economic projection has also been slashed. Now Italy is looking towards China’s Belt and Road Initiative for future growth.
A fall-out between the U.S and Chinese delegates negotiating trade dispute could worsen both the region’s and global growth, especially after China adjusted its economic projections for the year and lowered tax by 3 per cent for manufacturers to aid slowing growth and facilitate exports.
The euro single currency fell for a fifth day on Friday against the U.S. dollar to $1.1234 as traders continued to dump the single currency.
Banks CEOs Declare Readiness, Assured No Hidden Charges In Forex Sale
Chief executives of banks have assured no hidden charges in the sale of foreign exchange as they declared their readiness to meet the demands of Forex in the country.
The CEOs under the aegis of the Committee of Chief Executives of Banks at a virtual parley with the media also said they are not interested in procuring bureau de change licenses to dispense the new responsibility thrust on them by the central bank of Nigeria (CBN)
At a media briefing chaired by the chairman, and the managing director of Access Bank, Herbert Wigwe, other CEOs in attendance include Segun Agbaje of GTCO, Yemisi Edun of FCMG amongst others.
The briefing was in reaction to the CBN circular with Ref No: BSD/DIR/PUB/LAB/14/052 which gave a directive to Deposit Money Banks (DMBs) to set up teller points at designated branches and sell Foreign Exchange customers in need.
The directive in the circular signed by Haruna Mustafa, Director, Bank Supervision Department, was a follow up to the stoppage by the CBN, of the sale of forex to the Bureau De Change (BDC) operators in the country.
With this development, banks are now to attend to legitimate FX requests for Personal Travel Allowance, Business Travel Allowance, tuition fees, medical payments and SMEs transactions, among others.
The regulator also disclosed that a toll-free line had been set up at the CBN for bank customers to escalate unresolved complaints related to their FX requests.
Speaking at the media briefing, Herbert Wigwe assured of the readiness of the banks to meet the demands of the customers without any additional costs, noting that they have more capacity than the BDCs
“Banks have broader network than the previous sources and if you look at the branch network of all the banks in the country, I am not sure that the alternatives have resources like banks to provide this service to everybody”.
He allayed the fear of hidden charges said the transaction comes at no additional cost to the customers.
“There is no one-cent additional charge. It is unfortunate that bankers always come under pressure every time because of accusations of hidden charges. There is no additional charge in this service,” he stated.
Segun Agbaje, the group managing director of GTCO, promised that the banks will provide several channels for the customers to get their supply for their needs as he assured of the readiness of the banking system.
“They can start to come from today. We are ready to fund their demands”. stating that different banks have different strategies to ensure there are no hitches.
He stated that the control is centralised in each bank while the service is decentralised so as to be able to cater to many at the same time.
“We will run a transparent system and the compliance will be very strict because there will be sanctions. Anyone that refuses to comply with the rules will be sanctioned by the regulator and the law enforcement agencies” as he warned those that could want to come with fake documentation or passport to beat the process.
In her contribution, Yemisi Edun of FCMB assured that customers will have the same experience across the board irrespective of the bank as she allayed that the services may be poor in some banks.
“We have done this with remittance where we dedicate desks to attend to customers and customers will be directed to the desks once they have proper documentation.
In conclusion, Wigwe stated that apart from the injection that could be coming from the CBN, the banks also have their sources for foreign exchange which include from International Monetary Transfer Organisation, Diaspora remittances, and others from where they can meet the customer’s demands.
“We are putting structure and infrastructure in place to meet the demands of the customers but they should come with proper documentation” Wigwe stated
The apex bank expects the DMBs to adequately publicize the locations of the designated branches and make necessary arrangements to sell FX to customers in cash and/or electronically in compliance with extant regulations,
While CBN said the banks should ensure that no customer was turned back or refused FX provided that documentation and all other requirements are satisfied, it also outlaws undue delays, rationing and/or diversion of FX while it compels DMBs to establish electronic application and alert systems to update customers on the status of their FX requests, the circular added.
BDCs Continues To Provide Forex Services After CBN Halts Sales Of Forex To Operators
The recent announcement by the Central Bank of Nigeria (CBN) suspending dollar sales to Bureau de Change Operators would not stop the forex retailers from conducting their services in line with their operating licenses and guidelines.
According to a statement by the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, BDCs will continue to provide foreign exchange services to the public.
“BDCs are licensed to provide retail FX services, including buying from the public and also selling to end-users for allowable transactions namely Personal Travel Allowance (PTA), Business Travel Allowance (BTA), payment of medical and school fees,” Gwadabe said.
He added that while the dollar sale from CBN had helped in enhancing supply, the fact remains that BDCs are empowered to source FX from other sources and also to provide various services to members of the public.
“While the CBN has stopped dollar sale to BDCs, it has not canceled their operating licenses, or banned them from providing FX services to members of the public”, he added.
“At ABCON, we urge our members to see the CBN pronouncement as a wake-up call and opportunity to widen their customer base and deepen their business.
“ABCON has always worked with the CBN to ensure proper working of the FX market and in line with this principle, we will engage with the apex bank to address and resolve all the issues that led to the recent action, including identification and sanctioning of earring BDCs, where necessary.
“In addition to this, and in view of the fact that BDCs have been very effective in ensuring stable exchange rate, ABCON will work with relevant stakeholders including law enforcement agencies to develop a National BDC Policy with the aim of enhancing the contribution of the BDC subsector to the nation’s economy”, he said.
Naira Exchange Rates Today, Friday, July 30, 2021
Naira gained N5 against the United States Dollar on Friday morning to N520 at the parallel market popularly known as the black market.
Against the British Pound, the local currency dropped N5 from N710 recorded on Wednesday to N715 on Friday, while against the European it remained at N600, the same rate it traded in the last three days.
The Naira plunged against its global counterparts after the Central bank of Nigeria accused Bureau De Change Operators (BDCs) of illicit money flows and market manipulations that over time have sustained the unregulated black market section of forex.
Operators at the bureau de change section of forex had been accused of being the main source of forex for speculators and hoarders that manipulate forex rates at the unregulated black market, this the CBN plans to curb by cutting its weekly forex supply to BDCs but focus on servicing the economy through the banks.
Naira Black Market Exchange Rates
Morning * Midday** Evening *** Final Rates
Bureau De Change Naira Rates
Central Bank of Nigeria’s Official Naira Rates
|7/28/2021||SOUTH AFRICAN RAND||27.6161||27.6498||27.6836|
N.B: These tables are updated three times a day.
Bitcoin and Other Major Cryptocurrencies Braced For a $2.1T Inflow as Germany Institutional Investors Eyes Crypto Investment
Disqualified Nigerian Athletes Protest in 2021 Tokyo Olympics
SWIFT Launches SWIFT Go, a Fast, Cost-effective Service for Low-value Cross-border Payments
Technology4 weeks ago
Opera Becomes the World’s First Alternative Browser Optimized for Chromebooks
Economy4 weeks ago
130 Countries Signs Commitment to Global Tax Rate, Nigeria Abstains
Naira4 weeks ago
Naira Exchange Rates Today, Monday, July 5, 2021
Business3 weeks ago
How to Redeem Gift Cards, Gift Card Rates in Nigeria
Business3 weeks ago
Jeff Bezos Steps Down as Amazon CEO- How Much Power Will He Give Up?
Finance3 weeks ago
African Development Fund Extends $83.6 Million in Grants to Boost Ethiopia-Djibouti Electricity Trade
Government3 weeks ago
National Intelligence Agency Receives N4.87 Budget to Track Conversations
Government2 weeks ago
Security Operatives Arrest Sunday Igboho in Cotonou, Benin Republic