Finance

Central Bank of Nigeria Dismisses JP Morgan’s FX Reserves Estimate

Published

4 weeks ago

August 24, 2023

Central Bank of Nigeria - Investors King

In a recent interview on Africa Independent Television (AIT), Hassan Mahmud, the Director of the Monetary Policy Department at the Central Bank of Nigeria (CBN), responded to JP Morgan’s estimate of the country’s foreign exchange (FX) reserves.

Mahmud described the estimate as being presented “out of context.”

Earlier this week, JP Morgan estimated that the CBN’s net FX reserves had decreased to $3.7 billion at the end of 2022, down from $14 billion in 2021.

Mahmud acknowledged the fluctuations, liabilities, and encumbrances to the reserves but emphasized that such variations were natural and expected.

He stated, “We also read the JP Morgan numbers in-house, and we didn’t panic over that. That’s not the first time we are seeing people and institutions reeling out numbers; they must have their intentions to do that, whether to rouse market sentiments or mislead the public.”

Mahmud went on to explain that reserves, like any account balance, are subject to continuous changes.

He provided an analogy, saying, “I can have $20 million in my account and owe someone maybe $13 million that is supposed to be paid in 2027. You can’t come in 2023 and say my balance is $7 million. I am not having $7 million; I am having $20 million because, before I took a facility of $13 million, I knew that in the next three years, I would get $17 million to pay you back.”

He expressed his doubts about JP Morgan’s calculations, noting that he didn’t have any information on how they arrived at their numbers.

However, he acknowledged that the CBN had observed those numbers.

Mahmud also highlighted that the CBN holds approximately 80 percent of the funds in reserves, primarily to support the local currency during periods of volatility and to boost the confidence of foreign investors.

He emphasized the transparency of the central bank, stating, “We have the numbers there. The central bank’s reserves are on our bank net. Yes, the figure you see today may not be exactly to the last decimal point, but you have that picture that you are seeing there. We have $33 billion, there is an IMF facility there, the SDR is also there, we have the JP Morgan numbers that you mentioned, we have forwards, they are all there.”

When asked whether the public should disregard JP Morgan’s estimate, Mahmud emphasized that it would be inappropriate for CBN officials to publicly respond to JP Morgan’s claims.

He stated, “It is a ridicule for us (CBN) to come to the public domain, whether the CBN governor or deputy governor, to speak on issues raised by JP Morgan. I don’t even know who said it at JP Morgan. I don’t want us to get to that level where we will be ridiculing ourselves as a sovereign country because of a private investor that has its own motives for giving those numbers. It could also be that those numbers were quoted out of context.”

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Banking Sector

Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting

Published

18 hours ago

September 22, 2023

Investors King

The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.

Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.

In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”

While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.

President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.

The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.

The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.

Banking Sector

Currency in Circulation Surges by N1.7 Trillion Amidst Rising Cash Transactions

Published

19 hours ago

September 22, 2023

Investors King

The currency in circulation in Nigeria has surged by N1.7 trillion, driven by a surge in cash transactions.

According to data obtained from the Central Bank of Nigeria (CBN), as of the end of August, the currency in circulation rose to N2.7 trillion.

This substantial increase in currency in circulation comes after a 235.03 percent dip to N982.1 billion as of the end of February 2023 from N3.29 trillion at the close of October 2022, primarily due to the naira redesign policy spearheaded by the CBN.

However, the currency in circulation began its steady ascent once the policy concluded. Cash that had been previously withdrawn from circulation to promote electronic payments was reintroduced into the economy, contributing to this significant boost.

The data obtained from the CBN reveals that a whopping N2.3 trillion was removed from circulation during this period.

The CBN defines currency in circulation as all legal tender currency in the hands of the general public and within the vaults of Deposit Money Banks, excluding the central bank’s vaults.

The CBN further elucidated its methodology, stating that it employed an “accounting/statistical/withdrawals & deposits approach” to calculate the currency in circulation in Nigeria. This approach meticulously tracks the movement of currency in circulation on a transaction-by-transaction basis.

Under this methodology, each withdrawal made by a Deposit Money Bank at one of CBN’s branches results in an increase in currency in circulation (CIC), while each deposit made by a DMB at one of CBN’s branches leads to a decrease in CIC.

This surge in currency in circulation reflects the evolving landscape of financial transactions in Nigeria and underscores the importance of flexible monetary policies in facilitating economic growth and stability.

Finance

Oyo/Osun Customs Command Exceeds Revenue Target, Collects N47.4 Billion in Nine Months

Published

2 days ago

September 21, 2023

Samed Olukoya

The Oyo/Osun Area Command of the Nigeria Customs Service has reported a better-than-expected achievement in revenue collection, exceeding its targets while also making significant seizures of prohibited goods.

Outgoing Customs Area Comptroller, Babajide Jaiyeoba, made this announcement during the recent handover ceremony at the command in Ibadan, Oyo State.

Between January and September, the command generated N47.4 billion in revenue, according to Jaiyeoba. The customs area comptroller attributed this success to the dedicated officers and their unwavering professionalism, urging them to continue working as a cohesive team within the bounds of the law.

Under his leadership, the command also made seizures of prohibited goods valued at N308 million over the past nine months, a testament to their commitment to suppressing smuggling and upholding the customs regulations. Moreover, the command surpassed its revenue target set for the year 2022.

In a smooth transition of leadership, Ben Oramalugo assumed office as the new Comptroller. He emphasized the core duties of customs officers, which include revenue generation, trade facilitation, and the suppression of smuggling. Oramalugo pledged to uphold these mandates and called upon all officers to extend their cooperation to him as they did to his predecessor.

With these recent achievements and a committed leadership transition, the Oyo/Osun Area Command of the Nigeria Customs Service is well on its way to achieving even greater heights in revenue collection and ensuring compliance with customs regulations.