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CBN Governor Assures Manufacturers Steady Supply of Forex, Advocates End to Environmental Pollution

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Godwin Emefiele CBN - Investors King

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday reiterated the bank’s commitment to ensuring steady availability of foreign exchange for manufacturers.

Emefiele also urged banks as well as Nigerians to strive to end environmental pollution and ensure sustenance of banking principles.

Speaking alongside the Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, at an interactive session with a business team from the United Kingdom.

The apex bank governor explained that the fall in oil prices had affected the inflow of forex.

He affirmed that this resulted to the restriction of access to forex for the importation of goods that could be produced locally, in order to ensure judicious use of forex.

He identified the three main sources of forex inflows to the country as the sale of crude oil, remittances from Nigerians abroad and foreign investors.

Emefiele, represented by the Deputy Governor, Economic Policy, Dr. Kingsley Obiora, stated that some of the issues raised by the companies would be looked into to assist them in their daily operations.

However, Adebayo who facilitated the meeting said the growth of the companies would boost the economy and make more money available for the federal government to build more infrastructure and to create jobs for the youths.

A statement by Adebayo’s aide, Mr. Ifedayo Sayo, said the companies lauded the CBN for funding of local companies and the various reforms put in place to assist in keeping their businesses afloat.

They also solicited for more forex to enable them to continue in business, pay their lenders and maintain their machines.

Some of the companies present at the interactive session included GlaxoSmithKline, a pharmaceutical company, Savanna Energy, AzuraPower West Africa, Guinness Plc.

Representative of GlaxoSmithKline, Mr. Omon Elyhibro, lauded the minister and Emefiele for the support which the businesses had received from the government in the firm’s 50 years of operation in the country.

He said it was the desire of the government to make the country the export hub for pharmaceutical products, adding that this will be realised through a partnership with local manufacturers.

He commended the CBN support for the local manufacturing companies.

On his part, Managing Director of Azura Power West Africa, Edu Okeke, also praised the CBN for its support for the power generation company and called for more support in terms of forex allocation.

Okeke who commended the CBN for the various reforms put in place which had helped the growth of the sector stated that the reforms have helped to unlock the sector.

At the event yesterday, the CBN governor, Emefiele, appealed to the banks as well as Nigerians to strive to end environmental pollution.

He said it was imperative to key into the global movement for a greener world adding that; We must keep our ecosystem alive so that everything remains green,” he stated.

Emefiele, at a tree planting session alongside the CBN deputy governors, at the bank’s headquarters in Abuja to commemorate the World Environment Day celebration with the theme: “Ecosystem Restoration,” said lending practices must take the environment into consideration and ensure that sustainable banking principles are observed when banks are lending money.

The CBN governor stated that some international financial institutions and development finance agencies have started to demand evidence of compliance with sustainable banking principles before approving monetary assistance.

He said: “As a bank, you want to borrow money from a bank, they will tell you that as long as they find anything that pollutes the environment, that does not make the environment clean and green, they will not condone that credit activity.

“And we must join not only as bankers, but we must also join as Nigerians and members of the global community to ensure that we join the entire community to ensure that our environment remains green.

“It keeps the oxygen flowing well in our lives and we can all live well and avoid pollutants that destroy our lives and environment.”

Emefiele said the apex bank intended to seize the opportunity to join “all well-meaning human beings all over the world to commemorate a day like this.”

“A day like this reminds us to ensure that our ecosystem remains green. And we need to make sure we remove everything that is creating pollution in our environment.”

At the Model Secondary School, Maitama, the Special Adviser to the CBN Governor on Sustainable Banking, Dr. A’isha Mahmood, urged the pupils, who she described as young ambassadors of the environment, to protect the environment in order to avoid adverse environmental issues.

She stated that the CBN and other financial institutions had in 2012, adopted the Nigerian Sustainable Banking framework, a written document, guiding their business operations and practices, to ensure that their actions are socially and environmentally responsible.

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Naira

Nigeria Hits Historic High as Currency in Circulation Surges to N3.69 Trillion

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Nigeria’s currency in circulation surged to a historic high of N3.69 trillion, according to data released by the Central Bank of Nigeria (CBN).

This figure represents an increase of N43.07 billion or 1.18 percent from the total of N3.65 trillion reported in January 2024 and a 13.64 percent year-on-year rise from N3.25 trillion reported in February 2023.

Currency in circulation encompasses the physical cash, including paper notes and coins, actively used in transactions between consumers and businesses within the country.

The latest statistics indicate a considerable uptick in the availability of cash within the Nigerian economy.

The surge in currency supply comes amidst lingering concerns over a potential cash crunch following the monetary policy adjustments by the CBN, particularly the aggressive tightening stance of the Monetary Policy Committee (MPC).

Analysts attribute this spike to various factors, including the fear factor stemming from the cash crunch experienced in 2023 and lingering uncertainties surrounding the administration of physical currency.

Despite the surge in currency in circulation, Nigeria’s economic growth remains sluggish, with projections indicating growth rates of around 2.9 percent to 3.1 percent for 2024.

Also, inflation remains a significant concern, with the headline inflation rate climbing to 31.70 percent in February 2024 from 29.9 percent reported in January 2024, according to data from the National Bureau of Statistics (NBS).

The CBN’s proactive approach to monetary policy, including a historic increase in the monetary policy rate (MPR) to 24.75 percent, underscores the central bank’s commitment to addressing economic challenges and fostering stability amidst persistent pressures.

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Naira

Nigerian Naira Surges to N1,350 per Dollar in Parallel Market

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New Naira notes

The Nigerian Naira has appreciated to N1,350 per dollar in the parallel market, a significant gain from its previous rate of N1,430 per dollar just a day earlier.

Similarly, in the Nigerian Foreign Exchange Market (NAFEM), the naira strengthened to N1,382.95 per dollar, indicating an upward trend across key forex segments.

Data from FMDQ revealed that the indicative exchange rate for NAFEM fell to N1,382.95 per dollar from N1,408.04 per dollar on the previous day, representing a gain of N25.09 for the naira.

This surge in the naira’s value has widened the margin between the parallel market rate and NAFEM to N32.95 per dollar from N21.96 per dollar previously.

Analysts attribute this impressive surge to recent foreign exchange reforms implemented by the Central Bank of Nigeria (CBN).

These reforms, including the consolidation of exchange rate windows and liberalization of the FX market, have contributed to bolstering the naira’s strength against the dollar.

The CBN’s proactive measures aim to promote stability, transparency, and liquidity in the foreign exchange market, fostering confidence among investors and strengthening the national currency.

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CBN Governor Reveals $2.4 Billion Forex Forwards Under Investigation

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Naira Exchange Rates - Investors King

Governor Yemi Cardoso of the Central Bank of Nigeria (CBN) disclosed that law enforcement agencies are currently investigating foreign exchange forwards valued at $2.4 billion.

This announcement came in the wake of the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, March 26.

Governor Cardoso shed light on the meticulous forensic audit conducted on these transactions, which uncovered numerous discrepancies, rendering them ineligible for payment.

The CBN, while settling certain tranches of FX backlog, encountered transactions riddled with issues concerning their authenticity.

To address these concerns, Deloitte management consultants were enlisted to conduct a comprehensive forensic analysis spanning several months.

The audit revealed a multitude of irregularities, including allocations disbursed without corresponding requests, lack of proper documentation, and instances of outright illegality.

Cardoso emphasized the gravity of the situation, stating, “We refused to validate them because, apart from the fact that documentation was not satisfactory in many cases, they were outright illegal.”

He underscored the commitment of law enforcement agencies to investigate these transactions thoroughly.

Despite concerns about potential backlogs among stakeholders, Cardoso assured that the market remains open and transparent for addressing any outstanding contractual obligations.

The CBN has diligently verified and settled recognized backlogs of forward transactions.

This revelation comes at a critical juncture as Nigeria grapples with economic challenges, including inflationary pressures.

The MPC’s decision to raise the benchmark interest rate to 24.75 percent reflects efforts to stabilize prices and restore the purchasing power of the average Nigerian.

As investigations unfold and regulatory scrutiny intensifies, the CBN’s commitment to transparency and financial integrity will be closely monitored by stakeholders across the nation.

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