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CBN Raises Intervention at Interbank Market to $6m



  • CBN Raises Intervention at Interbank Market to $6m

A day after fine-tuning the foreign exchange policy, the Central Bank of Nigeria (CBN) made good its pledge to increase daily intervention at the interbank market, raising it from $1.5 million to $6 million.

However, the official exchange rate remained at N305.25 per dollar, although the CBN’s intervention was auctioned at N304.75 per dollar.

The move is part of efforts to ease acute forex scarcity and reduce the wide gap between the official and parallel markets.

Already, a broad gauge of the parallel forex market has shown that naira has gained N4 to settle at N516 per dollar, having depreciated to N520 per dollar on Monday, in reaction to the policy.

The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, said the new policy was felt in the market yesterday and the local unit appreciated in return.

For him, the challenge remained the long term sustainability of the policy with respect to supply of the currency to the market, increased inflow through stable crude oil price, production and foreign investments.

Meanwhile, CBN has planned a N310.22 billion treasury bills’ auction for next week, with a 91-day bill worth N26.14 billion; 182-day, N62 billion; and 12-month bill, N222.08 billion.

The move is part of efforts to raise funds for the 2017 budget deficit, control quantity of money in circulation and step up fight against inflation that is currently at 18.72 per cent.

To achieve the goals of the new policy, CBN said all banks would receive amounts commensurate with their demand per week, while it would support the inter-bank market to ensure adequate liquidity.

Pursuant to this, the apex bank yesterday sold $500 million on a 60-day forward contract, as opposed to 180-day contract before now, to help boost dollar supply in the forex market.

Similarly, the Federal Government wants to take advantage of the policy revision to strike a new deal with the World Bank to the tune of $1 billion.

The Minister of Finance, Mrs. Kemi Adeosun, who made the disclosure in a monitored programme, said beside plans to borrow the amount, government also hopes to sign $1.3 billion loan from China’s Export-Import Bank for the railway projects soon.

“IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems now. It only has a fiscal problem.

“Already, we are doing much reform like IMF would want, but we want to take responsibility for our future. We must have our home-grown, home-designed programme of reform,” she said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market.

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




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



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




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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