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CBN Increases Forex Allocation to Banks To Meet Customers Request

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Godwin Emefiele CBN - Investors King

The Central Bank of Nigeria (CBN) yesterday announced the increase of foreign exchange (forex) allocations to banks to meet the requests of customers, particularly travellers, seeking forex for travel allowances, payment of tuition and medical fees, among other Invisibles.

The moves followed the warning by the CBN Governor, Mr. Godwin Emefiele, at a weekend meeting with managing directors of Deposit Money Banks (DMBs), cautioning them to desist from denying customers, particularly travellers, the opportunity to purchase forex for Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), tuition fees, and medical payments as well as Small and Medium Enterprises (SMEs) transactions or for the repatriation of Foreign Direct Investment (FDI) proceeds.

Confirming the discussions at the meeting of bank chiefs, the Acting Director, Corporate Communications Department at the CBN, Mr. Osita Nwanisobi, said in a note that the CBN remained committed to ensuring liquidity in the forex market to meet genuine and legitimate demands of customers.

He added: “The CBN agreed to increase the amount allocated to banks for travellers, Small and Medium Enterprises among others. The banks also agreed to operate something akin to foreign exchange imprest account such that the coffers of banks will be replenished so long as they retire the initial amounts to the satisfaction of the CBN.”

Nwanisobi allayed fears of a forex shortage and urged members of the public seeking to purchase foreign exchange for PTA, BTA, payment of tuition fees or medical fees to do so from their banks.

“We wish to assure members of the public that the CBN shall continue to monitor market developments and is committed to ensuring an efficient FX market for all legitimate users,” he said.

He, however, advised customers to approach their customer service representatives of their designated banks should they encounter challenges, adding that they could escalate complaints to the CBN via the bank’s toll-free line: 07002255226 or send an email to cpd@cbn.gov.ng if their requests are not met.

Sources at the meeting with the bank CEOs held to address the challenge faced by customers in accessing forex from their banks said Emefiele warned that the CBN would deal with any bank that denies customers the opportunity to purchase foreign exchange for legitimate purposes.

According to the source, Emefiele said the CBN management frowned upon the seeming difficulty customers experienced in accessing foreign exchange through the banks, particularly for Invisibles such as PTA and requests bordering on tuition and healthcare needs.

Emefiele had last week reiterated the bank’s commitment to ensuring steady availability of foreign exchange for manufacturers.

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

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Naira

Naira Exchange Rates; Monday, June 21, 2021

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira continues its decline against global counterparts after gaining on the back of the Central Bank of Nigeria’s proposed increase in foreign exchange supply to all forex operators across the country.

Naira gained on the parallel market to exchange at N493 against the United States Dollar on Tuesday 15, June 2021 before dropping to N497 on Wednesday 16, June 2021.

The local currency plunged as low as N502 to a United States Dollar on the parallel market before the CBN announced its plans to up liquidity in an effort to ease scarcity and speed up business activities in the largely import-dependent economy. See the Naira exchange rates across various sections of foreign exchange markets.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
21/06/2021 492/498* 700/710* 585/595* 62/69 400/410 300/325
18/06/2021 492/498 700/710 585/595 62/69 400/410 300/325
17/06/2021 483/493 700/710 590/600 62/69 400/410 300/322
16/06/2021 497/502 707/713 600/606 62/69 400/410 300/322

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
21/06/2021 480/90 680/710 550/603
19/06/2021 475/490 680/715 580/603
18/06/2021 475/485 680/715 580/603
17/06/2021 478/490 690/710 590/603
16/06/2021 495/500 707/718 600/609
15/06/2021 495/500 707/718 600/609
14/06/2021 490/498 705/718 600/608

Central Bank of Nigeria’s Official Naira Rates

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Forex

Travellers to Access $4k , Businessmen $5K as CBN Boosts Forex Supplies

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US dollar - Investors King

Nigerians travelling abroad can access a maximum amount of $4,000 foreign exchange from the banks following the Central Bank of Nigeria’s announcement to increase forex supplies.

Sources from some of the banks said those travelling on business trips could also access a maximum amount of $5,000 for each trip.

The CBN had said in a recent statement that it had concluded plans to increase the amount of foreign exchange allocated to banks to meet legitimate needs.

This followed the warning by the CBN Governor, Mr Godwin Emefiele, to Deposit Money Banks to desist from denying customers the opportunity to purchase foreign exchange.

The purposes to access forex included Personal Travel Allowance, Basic Travel Allowance, tuition fees, and medical payments as well as Small and Medium Enterprises transactions or for the repatriation of Foreign Direct Investment proceeds, the CBN had stated.

At a virtual Bankers’ Committee meeting last week, the bankers discussed how the CBN intended to assist with forex to ensure availability for the upcoming summer period and the return of students to school in September.

The CBN also said the BDCs would continue to have their weekly allocations.

The committee observed that the rates were going up.

It stated, “The CBN has said that all the banks must make available at all times and anyone who wants to buy BTA, PTA, medical fees, student school fees and all the eligible invisible purchases to ensure that Nigerians are not forced to go and queue in the parallel market.

“So what the Central Bank is doing is to encourage all banks to make sure that there is available forex at all times, and that his information should be communicated on all our platforms.

“We are asking our customers to come to the branches and for BTA, for example, present the required documents, which are basically your international passport, your visa, your valid ticket and fill up the form in the bank.

“And what we have been instructed to do is ensure that we don’t turn anybody back and that we should request from the Central Bank once we exhaust the forex that we have.

“The idea is to have a hitch-free summer period and the resumption for children to go back to school. The idea is to ensure there is less pressure on the forex and then the rates will come down.”

Speaking during the virtual meeting, the Group Managing Director, Access Bank, Herbert Wigwe, said, “I think again as part of the central bank’s role in terms of price stability and the need to support small and medium enterprises, there was a highlight of the need for banks to go and support SMEs who import small raw materials for them to set up their businesses.”

The Managing Director, Ecobank, Patrick Akinwuntan, said, “All banks are available to ensure forex need is met.”

Managing Director, Sterling Bank, Abubakar Suleiman, said the CBN had provided sufficient foreign exchange to meet the needs of all legitimate Nigerian travellers and therefore, the idea of going to any other market should not arise at all.

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US Dollar

U.S Dollar Gained as Fed Shifts Interest Rates Hike from 2024 to 2023, Crypto Drops

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Dollar Cryptocurrency - Investors King

The United States Dollar gained on Thursday after the Federal Reserve raised inflation expectations to 3.4 percent and moved the year it is expected to raise interest rates from 2024 to 2023.

Policymakers suggested that interest rates could be raised twice by late 2023 given “Summary of Economic Projections” (SEP) released on Wednesday.

The dollar index, which tracks the greenback against six major currencies, gained 0.63 percent to 91.103, its highest since May 6.

The jump was as a result of renewed interest in the American economy as growth is expected to hit 7 percent in 2021 despite the rising inflation. Similarly, economic conditions are projected to improve faster than initially predicted.

The Federal Reserve Chair Jerome Powell said “the economic conditions in the committee’s forward guidance will be met somewhat sooner than previously expected.”

The interesting thing is that the Fed has gone beyond simply acknowledging that inflation is rising and that the U.S. economy has a lot of momentum, and it has essentially shifted to a much more hawkish stance in this set of projections,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

Powell said the central bank will maintain its $120 billion monthly bond-buying program to continue to support the economy but also suggested the possibility of pulling back on quantitative easing used to keep rates low.

I think we’re back to talking about a mild rally in the U.S. dollar and the data becoming very important over the summer period prior to Jackson Hole and September’s meeting,” said Simon Harvey, senior FX market analyst at Monex Europe.

Billions Flow Out of Crypto Market Ahead of Better US Economy

Investors are moving money in billions out of the crypto market, according to Whale Alert reports. On Thursday, 26,999,9990 USDT valued at $26,999,990 was transferred from Binance to an unknown wallet while another 19,999,995 USDT transferred from Bitfinex to an unknown wallet.

Investors moved 20,000,000 USDT to Bitfinex; 55,180 Ether worth $134,030,121 from an unknown wallet to another unknown wallet and 55,000 Ether estimated at $133,389,506 was also transferred to an unknown wallet in the early hours of Thursday.

5,000 Ether worth $12,168,082 and 1,000 Bitcoins worth $38,953,357 were transferred from an unknown wallet to Binance. To see the rest of the money being moved out of crypto space visit Whale Alert.

Cryptocurrency market capitalisation dipped by 5.03 percent in the last 24 hours but has lost $898 billion from $2.523 trillion it attained on Wednesday, May 12, 2021, to $1.625 trillion on Thursday, June 17, 2021.

The plunge in cryptocurrency was a result of improving global economic outlook, especially in the United States of America, the largest crypto investing nation.

The unregulated crypto space is largely treated as a haven asset to avert disaster during the global downturn. Meaning, an improvement in the global economy will generally impact cryptocurrency capital inflow and overall performance. Investors King expects cryptocurrency to extend its decline in the third quarter.

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