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CBN Injects $210m Into Forex Market

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Forex Weekly Outlook October 31-November 4
  • CBN Injects $210m Into Forex Market

The Central Bank of Nigeria (CBN) yesterday injected $210 million into the inter-bank Foreign Exchange (forex) Market. The move was meant to boost forex availability and also meet customers’ requests in various segments of the market.

At the forex trading, the CBN offered $100 million to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment received $55 million. Customers requiring foreign exchange for invisibles, such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated $55 million.

The bank’s Acting Director, Corporate Communications Department (CCD), Isaac Okorafor, confirmed the figures and reassured the public that the bank would continue to intervene in the interbank foreign exchange market in line with its quest to sustain liquidity in the market and maintain stability.

He added that the steps taken so far by the bank in the management of forex had paid off, as reflected by reduction in the country’s import bills and accretion to its foreign reserves.

Meanwhile, the naira exchange rate remained stable in the forex market, exchanging at an average of N360/$1 in the BDC segment of the market on Tuesday.

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 long experience in the global financial market.

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Finance

CBN Spends $11.5bn in Q1 2020 to Support the Economy and Dwindling Naira

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CBN Injects $11.5bn Into the Economy in the First Quarter

The Central Bank of Nigeria (CBN) injected a combined $11.5 billion into the nation’s foreign exchange market to stabilise the economy and support the Naira value in the first quarter of the year.

According to the latest report from the apex bank, the central bank injected $2.96 billion into the nation’s forex market in the month of January. Another $3.39 billion was used to support the economy in February while $4.7 billion was supplied in the month of March, the very month the economy was locked and all operations grounded to curb the spread of COVID-19.

A further breakdown of the report revealed that the Investors and Exporters’ foreign exchange window, Small and Medium enterprises and Invisible segments received a total of $7.23 billion of the $11.5 billion, the Bureau De Change segment received $3.6 billion while the Interbank and WDAS/RDAS got the rest in the first quarter.

The report noted that the apex bank injected a total sum of $14.72 billion and $28.55 billion into the economy in 2018 and 2019, respectively.

Meanwhile, the central bank is yet to commence the sales of forex to the bureau de change following the March suspension.

But has commenced partial sales to all commercial banks for onward sales to parents and small businesses across the country.

Mr Isaac Okorafor, the Director, Corporate Communications, CBN, had said, “The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels and other designated retail uses, as soon as international flights resume.”

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DSS Arrests EFCC, Acting Chairman, Magu

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Dss Arrests Ibrahim Magu

DSS Arrested Magu, the Acting Chairman of EFCC

The Department of State Services (DSS) has arrested the acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, on allegation bordering on financial misappropriation, abuse of power and embesslement.

The Acting Chairman was accused of siphoning part of the money recovered from looters, a Punch reported stated.

The report stated “It was learnt that the security details to Magu put up a stiff resistance during the arrest of their principal, as they objected to the DSS move.

But he is now undergoing interrogation at the DSS Headquarters In Aso Drive.

This is happening barely two weeks after the Attorney-General of the Federation, Abubakar Malami (SAN) reportedly complained to the President, Major General Muhammadu Buhari (retd.) about Magu’s conduct and advised that he should be relieved of his appointment.

The AGF was said to have accused Magu of insubordination and discrepancies in the figures of funds recovered by the EFCC.

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Again CBN Debits Banks N118 Billion for Failing to Meet CRR Target

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CBN Debits Deposit Money Banks N118bn for Not Meeting CRR Target

The Central Bank of Nigeria (CBN) on Friday debited the nation’s deposit money banks a total sum of N118 billion for failing to meet 27.5 percent Cash Reserve Ratio (CRR) target.

This is the fourth of such action, bringing the total amount debited so far this year to N2.2 trillion.

According to Tunde Abidoye, an analyst at Lagos-based FBN Quest, the move brings “further downward pressure on banks liquidity ratios and earnings.”

“Based on the total sum that each bank has been debited this year, and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86bn for our universe of banks coverage,” Abidoye stated in a note to clients.

The central bank continues to debit banks to force them to loan more into the real sector and also reduce their forex purchasing power to better manage the nation’s weak foreign reserves and curb capital outflow. A series of recent reports have pointed to a possible foreign exchange devaluation to ease pressure on the nation’s reserves.

The report shows that the Stanbic IBTC and Guaranty Trust Bank were debited N15 billion each.

Details later…

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