We don’t fix forex rates, says CBN – The Cable

The Central Bank of Nigeria (CBN) has released a statement to address allegations leveled against it on wrong foreign exchange purchase figures.

The statement, which was signed by Isaac Okorafor, the bank’s director of corporate communications, said the sale of forex under the new policy is most transparent.

The new foreign exchange policy prioritises forex sales to manufacturers, agriculture, plant and machinery, critical raw materials, amongst others.

“Following reports alleging irregularities in the rates at which foreign exchange was obtained by some individuals and companies from different Deposit Money Banks (DMBs) under the new [60:40] foreign exchange policy by the Central Bank of Nigeria (CBN), which prioritizes FOREX sales to manufacturers, agriculture, plant and machinery, critical raw materials, among others, we wish to make the following clarifications,” the statement read.

“The CBN neither allocates foreign exchange nor does it deal directly with bank customers. The CBN does not fix FOREX rates for transactions by individuals or companies.

“In line with our principle of transparency, we directed DMBs to forward to us evidence of FOREX sale to end users and to advertise same in national dailies.”

The bank said since it introduced the new forex policy, it has been publishing evidence of sale from DMBs “in the spirit of transparency”.

“We have recently observed, however, that some DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates,” the statement read.

“The DMBs involved in providing inaccurate data have since been issued queries accordingly.

“Some have returned a response indicating that some of the figures were related to formatting errors, which do not affect the true rates of the affected transactions.

“As the constitutionally authorised industry regulator mandated to manage the FOREX market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the forex market.

“We wish to reiterate that the sale of forex under the new policy is most transparent and it is not intended to benefit any individual or corporate body in anyway.”

Naira reverses loss after dropping to 500/dollar – Punch

Oyetunji Abioye

The naira dropped against the United States dollar from 498 to 500 at the parallel market during the early trading hours on Monday, crossing the critical threshold currency analysts had predicted.

Foreign exchange traders linked the development to relative scarcity of the greenback in the forex market.

The local unit, however, reversed the loss during the intra-day trading and closed at 498/dollar.

The naira has been under persistent pressure as scarcity of the greenback continues to hit the market.

At the official market, the local unit closed at 305/dollar, the level it has traded at since August last year.

Meanwhile, the naira is expected to remain at 498/dollar at the parallel market as the Central Bank of Nigeria continues sales of the greenback to Bureau De Change operators.

The CBN had two weeks ago commenced sales of dollars to the BDC operators through Travelex, following a three-week break during the Yuletide season.

On Friday, the naira closed at 498/dollar at the black market, broadly unchanged from 497/dollar it recorded the previous weekend.

“Confidence is gradually returning to the forex market as a result of improved foreign exchange reserves, dollar sales by international money transfer agents and the central bank assurance it will continue to support the local currency,” one trader told Reuters.

Last Tuesday, the CBN said it would continue to provide hard currency, with priority given to manufacturing industries that need to import raw materials and spare parts.

Economic and financial analysts are slightly divided over the outlook for the naira this year.

Economic expert and Chief Executive Officer of Cocosheen Nigeria Limited, Mr. Henry Boyo, said the naira might crash to almost 1000/dollar at the parallel market this year if the CBN failed to review its monetary policy framework.

According to him, the policy framework is skewed against the local unit and it will be difficult for the naira to remain at the current rate.

A Nigeria-based investment bank and research advisory firm, Afrinvest West Africa Limited, predicted last Tuesday that the official exchange rate of the naira would tumble by about 31 per cent to 400/dollar before the end of this year.

In its 2017 economic outlook, the firm said the CBN might be forced by possible developments in the currency market to devalue the naira from the current 305/dollar to around 400/dollar.

“If you think about the monetary policy environment, we think that the CBN will be forced by the market to make a change. Currently, the naira is pegged at 305/dollar; we see it moving towards 400/dollar by the end of the year,” the Group Managing Director, Afrinvest, Mr. Ike Chioke, said at a press conference announcing the firm’s economic outlook.

Chioke stressed the need for key reforms in the currency market, petroleum downstream sector, power and other key sectors of the economy in order to put the ailing economy on the path of growth.

“If the CBN did take a plunge to make it really market-driven, we can see that even the 400/dollar rate may appreciate later on, bringing to something below 400/dollar,” the expert said.

Nigeria gains $22m from Bonny Light crude in December – Guardian

• World Bank sees oil prices surging in 2017
• Global crude oil balances expected to tighten through 2018

The price of Nigeria’s Bonny Light crude oil was the second highest in December among members of the Organisation of the Petroleum Exporting Counties (OPEC), rising from $42.20 in November to $53.91 per barrel.

This means the country gained about $11.71 per barrel in December. Nigeria therefore may have added $22 million to its foreign exchange earnings when multiplied by current production of 1.9 million barrels per day in December.

The gain also boosts Nigeria’s capacity to fund its N7.3 trillion 2017 budget, and if the gains continue, may reduce the dependence on external borrowings to fund the budget and other development projects.

Besides, the World Bank expects oil prices to average $55/barrel in 2017, an increase of 29 per cent above the 2016 average price.Also, Global crude oil balances is expected to tighten through 2018, the United States Energy Information Administration (EIA) said last week in a statement.

Analysis from OPEC reference basket revealed Abu Dhabi’s Murban crude oil as the only blend ahead of Bonny Light at the international market in December.
Giving a full year analysis of the price movement, OPEC said the light sweet crude from West and North Africa’s Basket components, Saharan Blend, Es Sider, Girassol, Bonny Light and Gabon’s Rabi, gained $8.53, or 19.1 per cent, to $53.10 during the month under review.

Speaking on rebalancing the oil market, the Secretary-Generals of OPEC, Muhammad Barkindo, said it is essential that all producers, both OPEC and non- OPEC, take coordinated action to return stability to the market.

“This is not only vital for the short term, but the long term too, as our industry looks to fund investment in new exploration and production, arrest decline rates in existing fields, expand midstream and downstream capacity, and hire, train and support the people that will continue to drive this industry forward in the years ahead.”

Meanwhile, the World Bank said in its Commodity Markets Outlook for 2017 released last Wednesday, that the increase largely reflects partial compliance to the recent agreement between OPEC and non-OPEC producers.

According to World Bank, the market is expected to tighten in 2017, particularly in the second half of the year, which would reduce the large stock overhang.

It added that onshore U.S. lower-48 states oil production, including shale, is projected to bottom out in the second quarter of 2017, and rise moderately thereafter.

The Bank noted that prices may increase to $60 barrels in 2018, assuming a balanced market and no additional OPEC supply restraint.It stated: “Crude oil prices jumped 10 per cent in the fourth quarter, averaging $49.1 barrels, following agreements by both OPEC and non-OPEC producers to reduce output by nearly 1.8 million barrels per day in the first half of 2017.

“The oil market continues to rebalance amid steady demand growth, while sharply lower in- vestment in non-OPEC countries has led to lower production, notably in the U.S. shale oil sector.”

Also, the EIA estimates that crude oil and other liquids inventories grew by two million barrels per day (bpd) in the fourth quarter of 2016, driven by an increase in production and a significant, but seasonal, drop in consumption.

Global production and consumption are both projected to increase through 2018, but consumption is expected to increase at a faster rate than production. As a result, global balances are expected to tighten.

The EIA noted that the production increase in the fourth quarter of 2016 largely reflects members of OPEC ramping up production in advance of implementing the November agreement on production cuts.

Nigeria’s Petroleum Resources Minister, Dr Ibe Kachikwu, had expressed optimism that the price of crude would rise to a level that is neither too high nor too low.

He said although crude oil appears to have fallen into bad times because of prevailing low price and the campaign against the use of fossil fuels for environmental reasons, the product would soon rise up to take its place as the prime global energy source.

Asia markets extend losses on Trump worries – AFP

Asian markets retreated again Tuesday, with fears growing about the impact of Donald Trump’s presidency on the global economy as he faces a wave of criticism over his controversial immigration policy.

Traders fled for the exits for a second day after the new US leader signed an executive order Friday banning entry to travellers from seven Muslim-majority countries and imposing a temporary ban on refugees.

While the White House defended the move as aimed at fighting terrorism, world leaders and protesters around the world condemned it as a war against Muslims.

The overwhelming outrage spooked investors, who fear the announcement could be a sign the tycoon will press ahead with many of his protectionist promises, overshadowing economy-boosting measures such as infrastructure spending and tax cuts — which had fuelled a rally in November and December.

All three main Wall Street indexes ended lower, while London, Paris and Frankfurt each lost more than one percent.

The sell-off continued into Asia, with Tokyo ending 1.7 percent lower. Dealers were unimpressed by the Bank of Japan’s decision to raise its economic growth forecasts through 2019 but delay any fresh monetary-easing measures.

Sydney shed 0.7 percent and Seoul sank 0.8 percent. Singapore, Wellington, Manila and Kuala Lumpur were also sharply lower.

Hong Kong and Shanghai were closed for holidays.

The dollar also lost ground against most of its major peers, with the yen getting extra support from the BoJ’s lack of action on monetary easing.

Higher-yielding currencies such as the South Korean won, Australian dollar and Indonesian rupiah were also stronger.

“The fulcrum for the fear and selling in stocks and the US dollar… was the public’s visceral response to the president’s immigration and travel ban,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, in a note.

– Moral compass –
“The raft of executive orders from the White House, together with tweets and belligerence from the president since taking the oath of office, have simply reminded markets that there is some darkness in Trump’s policies and Trumponomics.”

Friday’s order was the latest controversial move by Trump in his first week, which also included a row with Mexico over trade and his proposed border wall, battles with the media over the crowd size at his inauguration and unsupported assertions that millions of people voted illegally in the 2016 election.

And on Monday he sacked his acting attorney general, a holdover from the Obama administration, after she ordered Justice Department attorneys not to defend his controversial immigration ban.

But despite fears on trading floors, Stephen Innes, senior trader at OANDA, said markets could recover if Trump implements his pro-growth measures.

“While the Muslim travel ban may have been universally condemned, keep in mind, capital markets lack a moral compass, and while it makes a compelling storyline, the market meltdown overnight was investors voting with their feet in a direct challenge to the Trump inflation trade,” he said.

“Sure, the immigration ban was risk-adverse, but leeriness will quickly fade if the US administration comes through on the fiscal front.”

Dealers are now awaiting the end of a Bank of Japan meeting for some guidance on fiscal policy, while the Federal Reserve is also holding a gathering this week followed by the release Friday of closely-watched US jobs data.

– Key figures around 0700 GMT –
Tokyo – Nikkei 225: DOWN 1.7 percent at 19,041.34 (close)

Sydney – S&P/ASX 200: DOWN 0.7 percent, to 5,620.9 (close)

Hong Kong – Hang Seng: Closed

Shanghai – Composite: Closed

Euro/dollar: UP at $1.0700 from $1.0693

Pound/dollar: UP at $1.2515 from $1.2490

Dollar/yen: DOWN at 113.50 yen from 113.81 yen

Oil – West Texas Intermediate: DOWN 24 cents at $52.39 per barrel

Oil – Brent North Sea: DOWN nine cents at $55.14

New York – Dow: DOWN 0.6 percent at 19,971.13 (close)

London – FTSE 100: DOWN 0.9 percent at 7,118.48 (close)

FG Appoints Goldman, Stanbic to Sell Debut ‘Diaspora Bond’ – Thisday

The federal government has asked Goldman Sachs and Stanbic IBTC Bank to advise it on the planned sale of a debut “diaspora bond” targeted at Nigerians living abroad.

Africa’s biggest economy first announced plans to sell bonds targeting Nigerian nationals abroad in 2013 to raise between $100 million to $300 million.

According to Reuters, Goldman Sachs and Stanbic were due to manage the sale at the time, but the government did not appoint any bookrunners ahead of the election in 2015 that brought President Muhammadu Buhari to power.

United Bank for Africa on Monday said the lender had been appointed as one of the bookrunners on the diaspora bond deal. First Bank and Standard Bank were also appointed, a local newspaper reported, quoting the debt office.

Nigeria is the world’s fifth-biggest destination for international remittances after China, India, the Philippines and Mexico, with five million Nigerians living abroad sending money back to relatives, according to Western Union.

Remittances make up the second-largest source of foreign exchange receipts in Nigeria, after oil revenues. Citizens living abroad send at least $10 billion home annually. The diaspora bond will have a maturity of five to seven years and will be issued before the second half of the year, the newspaper reported.

A finance ministry source told Reuters this month that the country will look to issue a diaspora bond after completing a $1 billion Eurobond sale this year.

Last month the government appointed Citigroup, Standard Chartered Bank and Stanbic IBTC to manage the $1 billion Eurobond sale, which it hopes to carry out in March.

The government plans to borrow up to $10 billion, with about half of that coming from foreign sources.
So far only the African Development Bank has confirmed a budget support package of $1 billion. The government has held talks for months with the World Bank, China and other institutions to fund the budget gaps. The government also plans to issue a debut sovereign sukuk in the local market and is looking to appoint advisers.

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Dollar to Naira Rate Black Market January 31 2017

Dollar to Naira Rate Black Market January 31 2017. Today’s Naira Black Market Exchange Rates. Dollar to Naira. Pounds to Naira. Euros to Naira.

These are the prevalent rates for Lagos. Actual rates may vary slightly based on vendor. Rates are updated during the day as they change.

NAIRA (N)

USD ($)

EURO (€)

GBP (£)

BUY/SELL

BUY/SELL

BUY/SELL

31/1/2017

495/498

520/527

605/615

30/1/2017

495/498

520/525

605/612

27/1/2017

495/498

520/525

600/610

26/1/2017

495/498

520/525

600/610

25/1/2017

495/498

520/527

597/607

Click Here for BDC Rates

Click Here for Western Union Money Transfer Rate

Foreign exchange regime not to favour special interests – CBN – NAN

The Central Bank of Nigeria, CBN, says the sale of foreign exchange, FX, under the new policy is transparent and not intended to benefit any individual or corporate body.

Acting Director of Corporate Communications, CBN, Isaac Okorafor, in Abuja on Sunday insisted that its FX policies were not meant to favour special interests.

According to Mr. Okorafor, the apex bank has to make the clarification following allegations of irregularities in the rates at which foreign exchange is obtained by some individuals and companies from different banks.

“We wish to reiterate that the Central Bank of Nigeria neither allocates foreign exchange nor does it deal directly with bank customers.

“The CBN does not fix FX rates for transactions by individuals or companies.

“In line with our principle of transparency, we directed Deposit Money Banks (DMBs) to forward to us evidence of FX sales to end users and to advertise same in national dailies.

“Since the introduction of the new FX Policy in 2016, we have published monthly, the evidence of sales from DMBs, as received from the banks and without any alteration by us in the spirit of transparency.

“As the constitutionally authorised industry regulator mandated to manage the forex market, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the FX market,” Mr. Okorafor said.

He said the CBN recently observed, however, that some banks forwarded inaccurate data which was erroneously published and gave a wrong impression of disparate rates.

He said the banks involved had been issued queries accordingly.

According to him, some of the banks have returned a response indicating that some of the figures are related to formatting errors which do not affect the true rates of the affected transactions.

It will be recalled that in June 2016, the CBN unveiled new guidelines in the management of FX which were being determined by the market.

Under the new regime, FX is allocated on a 60:40 ratio, prioritising FX sales to manufacturers, agriculture, plant and machinery and critical raw materials.

Oil price, forex policy hamper economic recovery — Experts – Punch

The country’s economy may struggle to rebound from its worst slump in 25 years unless President Muhammadu Buhari ends the Niger Delta militancy and review the nation’s foreign exchange policy that has blocked investment, economic and financial experts have said.

The experts said a more favourable oil and foreign-currency environment could help the economy, Bloomberg reported.

The International Monetary Fund has estimated the nation’s Gross Domestic Product will contract by 1.5 per cent for 2016 when the last quarter data is released soon.

“It’s oil prices and production from the delta that will determine growth,” the Chief Executive Officer of Time Economics Limited, Ogho Okiti, said.

“When monetary authorities floated the naira, they expected fiscal policies that attract investment and boost activity. But that didn’t happen, and as a result no one has confidence in the float,” Okito added.

The CBN, battling inflation at an 11-year high, has rebuffed the Ministry of Finance calls to cut record-high interest rates to boost the economy and has pledged to continue measures to manage the currency.

While the central bank scrapped a naira peg of 197 to 199 to the dollar in June, the CBN has intervened to hold the currency at around 315 since August.

That compares with a rate on the parallel market of almost 500 to the dollar. The central bank has also blocked importers of selected items from the interbank foreign-currency market.

“We expect the economy to recover, in part because oil-price falls and oil-production declines are behind us,” the Chief Economist at Exotix Partners LLP in London, Stuart Culverhouse, said.

“The extent of recovery will depend on normalizing the FX situation which is still a constraint on the economy.”

A shortage of dollars needed to repatriate profits forced some airlines to reduce flights to Nigerian destinations, while in manufacturing, investors including Africa’s richest man, Aliko Dangote, have held back expanding some of their businesses.

“There are no imminent plans for further FX liberalisation,” the Head of Africa Macro Research at Standard Chartered Plc in London, Razia Khan, said.

“FX will continue to be rationed, with key sectors being prioritised,” he stated.

Fitch Ratings downgraded the outlook on Nigeria’s credit assessment to negative because of concerns that foreign currency shortages will constrain the non-oil economy. Fitch puts the nation’s debt is rated B+, four steps below investment grade.

“Access to foreign exchange will remain severely restricted until the Central Bank of Nigeria can establish the credibility of the interbank foreign-exchange market and bring down the spread between the official rate and the parallel market rates,” Fitch said in a statement on Wednesday.

The Federal Government should use policies that attract private capital because increasing public spending alone won’t be sufficient to revive the economy, a senior associate for investment banking at Afrinvest West Africa, Ayodeji Ebo, said.

“Last year, because of the challenge of meeting revenue targets, capital expenditure suffered,” he said. “I see the same pattern this year,” he added.

CBN queries banks for supplying inaccurate forex data – Punch

Ifeanyi Onuba, Abuja

The Central Bank of Nigeria on Sunday said it had issued queries to some Deposit Money Banks that provided inaccurate information on foreign exchange to end users.

The apex bank said this in a statement issued by its Acting Director, Corporate Communications Department, Mr. Isaac Okoroafor.

The statement did not provide the identities of the banks nor their number, but added that some of the affected banks had sent in their responses.

It said since the introduction of the new forex policy last year, the CBN had mandated all participating banks to forward evidences of forex sales to end users as well as advertise same in national dailies.

The decision to ask the banks to publish their forex rate, according to the apex bank, is to ensure transparency as the CBN neither allocates foreign exchange nor does it deal directly with bank customers.

However, the central bank lamented that it had observed that some banks forwarded inaccurate data, which were erroneously published, adding that this had given a wrong impression of disparate foreign exchange rates.

It said, “In line with our principle of transparency, we directed the DMBs to forward to us evidence of forex sale to end users and to advertise same in national dailies.

“Since the introduction of the new forex policy in 2016, we have published monthly the evidence of sale from the DMBs as received from the banks and without any alteration by us in the spirit of transparency.

“We have recently observed, however, that some of the DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates. The DMBs involved in providing inaccurate data have since been issued queries accordingly.

“Some have returned a response indicating that some of the figures were related to formatting errors, which do not affect the true rates of the affected transactions.”

The CBN stressed that as the constitutionally authorised industry regulator mandated to manage the forex market, maintain external reserves and safeguard the international value of the legal tender, it would not indulge in acts capable of discrediting the forex market.

,

Dollar to Naira Rate Black Market January 30 2017

Dollar to Naira Rate Black Market January 30 2017. Today’s Naira Black Market Exchange Rates. Dollar to Naira. Pounds to Naira. Euros to Naira.

These are the prevalent rates for Lagos. Actual rates may vary slightly based on vendor. Rates are updated during the day as they change.

NAIRA (N)

USD ($)

EURO (€)

GBP (£)

BUY/SELL

BUY/SELL

BUY/SELL

30/1/2017

495/498

520/525

605/612

27/1/2017

495/498

520/525

600/610

26/1/2017

495/498

520/525

600/610

25/1/2017

495/498

520/527

597/607

24/1/2017

495/498

520/524

599/602

Click Here for BDC Rates

Click Here for Western Union Money Transfer Rate