CBN raises intervention at interbank market to $6m – Today

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.

Naira firms up, stock market gains, as new forex policy takes effect – The Cable

The naira moved to 515 per dollar on Tuesday, following the introduction of new policy actions by the Central Bank of Nigeria (CBN).

The naira, which was trading at 520 to the dollar on Monday, after falling from 510 the previous week, firmed on Tuesday evening, at the parallel market.

Nigerian Stock Exchange (NSE) also gained over N740 million on Tuesday, following the policy implementation.

The capital market saw its market capitalisation move from N8,738,370,947,609.24 on Monday to N8,739,112,337,168.61, while all share index gained a few more points on the trading floor, to hit 25,251.63

About 24 hours later, the apex bank, which went to the market with $500 million, sold $370.9 million to 23 banks at rates between N315 to N360 per dollar.

On Monday, the CBN introduced fresh policy actions, which seek to provide more foreign exchange for Nigerians, seeking its use for personal and business purposes.

Lukman Otunuga, research analyst at FXTM, describe the policy adjustment as a logical move by the apex bank.

“With the dollar demand for school fee payments overseas and personal travel allowance enforcing downside pressures on the parallel market, the move by the CBN to sell dollars to retail users via commercial lenders seems logical,” he said.

The CBN says it remains committed to ensuring adequate liquidity flows in the foreign exchange market.

Success of Eurobond linked to increased appetite of foreign investors for Nigeria – Guardian

• As trading on bond commences on LSE platform

The International Markets Unit – Head of Middle East, Africa and South Asia, London Stock Exchange, (LSE), Ibukun Adebayo, has described the success of Nigeria’s bond listing as a strong indication of international investors’ interest in building exposure to the nation’s economy.

Adebayo said this during the listing of the Nigeria’s $1 billion 15-year government bonds on LSE platform.

According to him, the listing, which secured high quality investor support from across the United States and Europe, would support Nigeria in financing its long-term infrastructure projects.

Adebayo explained that the listing of the bond on LSE builds on the recent pipeline of several high profile sovereign, supranational, municipal and private company bond issuances on the LSE.

He noted that the offer, nearly eight times oversubscribed, reaching approximately $7.7billion, highlights strong international investor demand and demonstrates confidence in Nigeria’s economy.

Furthermore, Adebayo added that the listing reinforces LSE status as a strong partner to Nigeria, as well as the City’s readiness to provide a deep additional channel of finance for the development of Nigerian infrastructure and the growth of the economy.

“In January 2017, Israel listed its largest ever Eurobond offering of €2.25 billion in London. Nigeria’s choice of London Stock Exchange for its first international bond offering since 2013 underlines LSE position as a leading global venue for debt fund raising and London’s enduring status as a market open to the world.”

Also, the Economic Secretary to the Treasury, Simon Kirby, said: “I am delighted that the Nigerian government has chosen London as the location to list its $1 billion sovereign bond. This issuance underlines Britain’s position as the world’s leading global financial centre and strengthens our economic and financial relationship with Nigeria.”

With a coupon of 7.875 per cent, the 15 year government bond, is the longest ever maturity for an international Nigerian bond, the first international issuance for the country since 2013. The offer was nearly eight times oversubscribed, with the order book closing at approximately $7.7 billion.

LSE Group has a long history of supporting the development of African capital markets and investment in African companies.

Nigeria revenues for state and local govts up 16 pct in January – Reuters

LAGOS Feb 21 (Reuters) – Nigeria’s distributable government revenues rose in January by 16 percent to 465.19 billion naira ($1.5 billion) as it brought in more oil royalties, the accountant general’s office said in a statement on Tuesday.

Distributable revenue is government income that is shared at various levels of state including the federal government, state governments and local government councils.

Average oil prices rose from $47.30 to $49.57 per barrel during January, while the total crude export volume rose 1.49 million barrels, the statement said.

OPEC member Nigeria, which last year entered its first recession in a quarter of a century, relies on crude oil sales for two-thirds of its government revenue but has been hit hard by the fall in global crude prices since mid-2014.

Militants have carried out attacks on oil and gas facilities in the southern Niger Delta energy hub for a year, cutting oil production – which stood at 2.1 million barrels per day at the start of 2016 – by as much as a third, though output has since mostly recovered.

The frequency of attacks has slowed in recent months with talks between the government and Delta community leaders to address the grievances of militants, who want the oil hub to receive a greater share of the country’s energy wealth.

Repairs on damaged facilities are underway, but force majeure stoppages remain in place at the Forcados, Qua Iboe and Brass oil terminals.

“Federation revenues increased despite the force majeure and the shut-down of pipelines for repairs and maintenance due to leakages and sabotage,” said the statement. ($1 = 304.2000 naira) (Reporting by Ulf Laessing; Writing by Paul Carsten; Editing by Ruth Pitchford and Hugh Lawson)

 

Nigeria’s Buhari needs further rest as is deputy launches action plan – Reuters

* Buhari left for medical leave in London a month ago

* Ailment unspecified; vice president been put in charge

* Spokesman says no cause for worry, more rest needed (Adds vice president launching economy action plan)

By Felix Onuah

ABUJA, Feb 21 (Reuters) – Nigerian President Muhammadu Buhari needs further rest in Britain following medical tests but there is no need to worry about him, his spokesman said on Tuesday, as his deputy launched a 60-day plan to improve the recession-mired economy.

Buhari, 74, went to London a month ago for medical tests for an unspecified illness, putting Vice President Yemi Osinbajo, 59, in charge. He had originally planned to stay 10 days.

The government has sought to allay concerns of a void at the helm of Africa’s biggest economy during a recession by stressing that Osinbajo has full powers as acting president.

“The president needs to rest for some further time,” Buhari’s spokesman Femi Adesina told reporters in Abuja. “From the results of the (medical) tests further rest has been recommended.”

He declined to say when Buhari might be back or what his condition is, saying only: “There is no cause to worry. He is the one who owns his body. There is nobody who knows his body better than him.”

Osinbajo, a lawyer, has been holding cabinet meetings and continuing work on an economic reform plan needed to secure a World Bank loan to help plug a deficit caused by low oil revenues.

The 60-day plan he launched on Tuesday aims to attract more investment to Nigeria.

“There are improvements which we expect to see at our ports. Improvements at our airports, improvements at the seaports, improvements in immigration visas,” he said in a statement, without giving details.

CURRENCY CONCERNS

The government had planned to ease the movement of goods and issuing of business visas delayed by corrupt officials but little had been approved amid inertia under Buhari.

The central bank on Monday devalued the naira for retail customers, days after a top advisory body demanded at a meeting chaired by Osinbajo an urgent review.

Buhari has rejected a devaluation despite even some officials privately saying the high naira rate had been deterring badly needed investment.

Osinbajo has also travelled during Buhari’s absence several times to the Niger Delta oil hub to discuss development projects to end attacks by militants fighting for oil revenues.

He met anti-government protesters who had marched on the presidential villa – in contrast to Buhari who has not travelled much in recent months, spending time mostly with his key aides.

Buhari’s predecessor, Goodluck Jonathan, was sworn in after the death in 2010 of President Umaru Yar’Adua. His illness created a power vacuum that was only filled by Jonathan, his vice president, after three months of political infighting. (Reporting by Felix Onuah and Ulf Laessing; Editing by Alison Williams and Gareth Jones)

 

24 hours after new policy, CBN injects $371m into forex market – The Cable

About 24 hours after The Central Bank of Nigeria (CBN) announced fresh policy actions in the foreign exchange market, the bank has pumped $370.9 million into the forex market.

On Tuesday, the apex bank carried out wholesale interventions in the interbank forex market by trading a total of $370,810,810.79 to 23 banks “to meet the visible and invisible requests of customers”.

A source at the CBN said the qualified bids ranged from N315 to N360 per dollar, adding that seven banks received full allotments of their respective bids valued at $37,500,000 each.

“Other banks received allotments ranging from $46, 512.50 to $15,578,081.51,” the source added.

Isaac Okorafor, acting director, CBN corporate communications department, said the bank’s intermediation in the forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.

He explained that the CBN offered $500,000,000.00 for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.

On Monday, the CBN unveiled new policy actions to make forex readily available for personal and business travels, medicals and school fees.

As part of its new policy action, the CBN also directed all banks in the country to open forex retail outlets at major airports as soon as logistics permit them to do such.

In line with the new policy, the CBN also made spot sales of $6 million to four banks, and sold $35 million for the payment of school fees, medical bills and personal and business travel allowances.

Nigeria wants to borrow $2.3 billion from World Bank and China-finance minister – Reuters

By Ulf Laessing and Oludare Mayowa

LAGOS Feb 21 (Reuters) – Nigeria wants to borrow at least $1 billion from the World Bank and to sign within months for a $1.3 billion loan from China to fund railway projects, Finance Minister Kemi Adeosun said on Tuesday.

Africa’s biggest economy needs to plug a gap in its record 7.3 trillion naira ($23.17 billion) 2017 budget, which boosts capital expenditures by a quarter to end its first recession in 25 years due to low oil prices.

The government has been in talks with the World Bank for a year and wants to finalise this month a reform proposal necessary for a loan application, according to officials.

“We expected to borrow at least $1 bln dollars,” Adeosun told CNBC when asked about the talks with the Washington-based bank.

“There is also some possibility of doing sector specific intervention in the power sector, they are working very closely with us on power,” she added, without being more specific.

Nigeria had initially promised to submit an economic plan to the World Bank by the end of December but did not do so, sources told Reuters last month.

Adeosun also said Nigeria had been offered by China’s state Export-Import Bank (Exim) a $1.3 billion loan to fund railway projects.

Nigeria will also present a reform proposal to the African Development Bank to release a second loan tranche worth $400 million, officials have said.

The bank had paid out a first tranche of $600 million but has held back the rest pending reforms. Its president has criticized hard currency curbs hitting investment.

On Monday, the central bank made a step towards reforms by devaluing the naira for retail customers. President Muhammadu Buhari had objected a devaluation, but he is on sick leave in Britain.

Adeosun also said the government wanted to harmonise policies with the central bank and that non-oil revenues were improving, with giving details.

She also said there was no need for a loan from the International Monetary Fund (IMF).

“The IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem.”

Adeosun also said one or two banks have yet to remit state revenues via a Treasury Single Account (TSA) at the central bank created in 2015 to combat corruption.

“Interestingly our whistle-blowing programme (to track down graft) actually picks up tips that bankers were being instructed to rename accounts when they knew that the money belongs to the federal government.” She did not name the banks.

($1 = 315.0000 naira) (Reporting by Ulf Laessing and Oludare Mayowa; Editing by Catherine Evans)

 

Nigeria steps up dollar sales after devaluing FX rate for retail customers – Reuters

LAGOS Feb 21 (Reuters) – Nigeria’s central bank stepped up dollar sales on the interbank currency market on Tuesday, traders said, a day after the bank effectively devalued the naira for retail currency sales.

The bank sold a total of $6 million to commercial banks at 304.75 per dollar, Reuters data showed, far more than its regular $1.5 million, traders said.

Earlier, the central bank said it would sell $500 million on a 60-day forward contract to help boost dollar liquidity on the interbank market. (Reporting by Chijioke Ohuocha; Editing by Catherine Evans)

 

Naira hits 520/dollar, forex retailers examine CBN action – Punch

Oyetunji Abioye

The naira tumbled to 520 against the United States dollar at the parallel market on Monday as scarcity of the greenback continued to keep the exchange rate in a free fall mode.

The naira had closed at 516/dollar on Friday, after hitting 510/dollar and 507/dollar last Thursday and Tuesday, respectively.

Experts said demand for dollar for school fees payment overseas as well as Personal Travel Allowance by intending travelers was taking a toll on the exchange rate at the parallel market.

This came just as retail currency traders tried to digest the Central Bank of Nigeria’s new decision to sell dollars to retail users through commercial banks, Reuters reported.

The CBN is planning to sell $1m weekly to each of the country’s 21 commercial banks at a rate of N375 to clear a backlog of demand for retail users and try to narrow the premium between the official and black market rates.

Retail currency users buy dollars from licensed Bureaux de Change operators. However, due to the CBN’s inability to meet dollar demand, the BDCs have tended to source dollars from private sources and resell at a much higher margin, fueling the black market.

Forex traders told Reuters that some banks had compiled a list of bids from customers awaiting dollars.

The CBN has been selling dollars at N305 to clear a backlog of demand from manufacturing, agriculture and airline companies, hoping also to help drag the country out of its worst recession in 25 years.

Experts are divided over the outlook for the naira this year. Some experts have said the naira may hit between 520/dollar and 1000/dollar at the parallel market this year unless the CBN reviews its forex policy.

An economic expert and Chief Executive Officer of CocoSheen Nigeria Limited, Mr. Henry Boyo, said the naira would hit 1000/dollar unless the central bank reviewed its monetary policy framework.

He said the framework was skewed against the naira.

CBN demands foreign exchange outlets at airports – NAN

To ease the burden of travellers, the Central Bank of Nigeria (CBN) has directed all banks to open Foreign Exchange outlets to sell dollars and other hard currencies at major airports.

According to a statement signed on Monday by the CBN acting Director of Communications, Mr Isaac Okorafor, the banks are to do so as soon as logistics permit.

Okorafor said that this would also ensure that transactions were settled at much more competitive exchange rates.

“Similarly, the CBN is providing direct additional funding to banks to meet the needs of Nigerians for Personal and Business Travel, Medical needs, and School fees, effective immediately.

“For medical and school fees, such payments must be made by commercial banks directly to the institution specified by the customer.

“The CBN would ensure that this process is as smooth as possible and that as many customers as possible get the foreign exchange they genuinely demand.

“The CBN expects such retail transactions to be settled at a rate not exceeding 20 percent above the interbank market rate,” he said.

Okorafor said that the apex bank had also reduced the tenure of its Forward Sales from the current maximum cycle of 180 days, to not more than 60 days from the date of transactions.

“In order to maintain confidence in the FX market, the CBN will immediately begin implementing its articulated programme to clear all the unfilled orders in the interbank FX market.

“Given our plan to meet all unfilled orders, and provision of FX to the manufacturing sector would remain the CBN’s strong priority, we will no longer impose allocation rules on commercial banks.

“We will implement an effective intervention programme to support the inter-bank market to ensure adequate liquidity necessary to deliver an efficient FX market,” he said.

Okorafor said that the FMDQ trading had also been advised to activate its Foreign Exchange Order-Book systems as soon as possible and also accelerate the onboarding of FX clients on the FX Relationship Systems to ensure total transparency of the FX market.

The apex bank urged market participants to assist in ensuring that these new measures were followed to preserve the external reserves, the stability of the financial system and economic growth for the benefit of all Nigerians.