The Central Bank of Nigeria (CBN) governor, Mr Godwin Emefiele, says maintaining stable exchange rate to avoid depreciation of the Naira is better than building foreign reserve buffers.
Emefiele told newsmen on Sunday that this was part of the outcome of the Nigerian delegation’s meetings with investors and institutions at the International Monetary Fund (IMF) and World Bank Group (WBG) Annual Meetings in Bali.
He said that all frontiers and developing markets have suffered not just depreciation, but had also lost reserves.
“We are very conscious of the need to build buffers but unfortunately I must say that we are in the period where it will be difficult to talk about building reserve buffers.
“We can only build reserve buffers if we want to hold on to the reserve and then allow the currency to go, and wherever it goes is something else.
“So it is a choice we have to make and at this time the choice for Nigeria is to maintain a stable exchange rate so that businesses can plan and we do not create problems in the banking system assets.”
According to him, like other emerging markets nations, Nigeria has also lost reserves but only marginally because it had managed to sustain stability in its foreign exchange market.
The CBN governor said that the IMF and the World Bank advised that nations should build country specific policies and fiscal and structural reforms that would boost economic growth.
Mrs Zainab Ahmed, Minister of Finance, said the World Bank’s Human Capital Development Index (HCI) ranking, which placed Nigeria low at 44 per cent on stunting, was disheartening and depressing.
She, however, said that the Federal Government saw the rating as a wake-up call.
“We admit that this pervasive action was due to long years of under-investment in human capital, which we have before now realised and for which we have been addressing.
“Apart from major policy actions, some decisive actions are being taken to address the situation.”
According to her, the delegation held meetings with the two rating agencies-Fitch and Moody’s and presented to them the summary and synopsis of the recent economic and financial developments in Nigeria.
She added that it was an opportunity for the rating agencies to be able to objectively evaluate Nigeria’s credit.
Ahmed said she also met the IMF Managing Director, Ms Christine Lagarde and discussed Nigeria’s economy in view of the 2019 general elections.
She assured Lagarde that the election year would not pose any threat to the nation’s economic prospects.
Mr Udoma Udo Udoma, Minister of Budget and National Planning, said that to improve HCI, the nation had improved budgetary allocation to health and education.
He said that allocation to education moved from N22.5 billion in 2015 to N102.9 billion in 2018.
He added that allocation to health was reviewed from N26.6 billion in 2015 to N86.49 billion in 2018.
He said also that N55.19 billion had been added to the health budget in 2018 through the National Health Act.
The Naira on Thursday appreciated marginally against the dollar at the Investors’ Window (I & E), exchanging at N363. 57, stronger than N363.94 posted on Wednesday.
The daily market turnover stood at 392.9 million dollars.
The Nigerian currency closed at N306.40 to the dollar at the official CBN window.
At the parallel market, the Naira closed at N359 to the dollar, while the Pound Sterling and the Euro closed at N478.30 and N420.
Trading at the Bureau De Change(BDC) segment saw the Naira close at N360 to the dollar, while the Pound Sterling and the Euro closed at N478.30 and N420.
Meanwhile, in spite of the continuous intervention by the Central Bank of Nigeria (CBN) at the foreign exchange market and the increase in the price of oil at the international market, the manufacturing sector witnessed slow growth in the month of September.
The manufacturing sector continued to expand in September, though at a slower pace, the latest CBN Manufacturing Purchasing Managers’ Index (PMI) report, shows.
It showed that the September Manufacturing PMI eased to 56.2 from 57.1 in August, indicating expansion in the manufacturing sector for the 18th consecutive month.
The report noted that “a composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting.”
The Nigerian National Petroleum Corporation (NNPC) has denied media reports alleging that the Nigeria Police Force (NPF) recovered $470.5 million and N8 billion of the corporation’s funds hidden in commercial banks.
It said it runs a transparent account which the Presidency, the Office of the Accountant-General of the Federation (AGF) and the Central Bank of Nigeria (CBN) were fully aware of and receive periodic status reports on balances yet to be remitted to Treasury Single Account (TSA) by commercial banks.
The Nigeria Police Force had claimed that the monies belonging to NNPC Brass Liquefied Natural Gas were hidden in some commercial banks and not remitted to the treasury single account in violation of the Federal Government’s directives.
According to the police, “The sum of Four Hundred and Seventy Million, Five Hundred and Nineteen Thousand, Eight Hundred and Eighty-Nine US Dollars and Ten Cent ($470,519,889.10) belonging to NNPC BRASS/LNG INVESTMENT hidden in some commercial banks after the directives of the Federal Government on TSA.
“The sum of Eight Billion, Eight Hundred and Seven Million, Two Hundred and Sixty Four Thousand, Eight Hundred and Thirty-Four Naira, Ninety-Six Kobo (NGN8,807,264,834.96) monies belonging to NNPC BRASS/LNG INVESTMENT, that was not remitted to TSA Account of the Federal Government was also recovered,” the Police had said in a statement.
But in a statement issued on Friday by NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, the corporation said although a few commercial banks were yet to complete remittance of US dollar deposits to the TSA, it noted that it had no funds hidden in any commercial bank.
The state oil firm explained that the allegation was not only misplaced but equally misleading.
According to Ughamadu, following the implementation of TSA, the corporation had made a report to the Presidency on the failure of some commercial banks to complete transfer of US dollar deposits and a Presidential directive was issued for CBN to ensure that the funds were completely transferred to the corporation’s TSA in US dollars.
“Most of the commercial banks have since complied with the Presidential directive and completed transfer to the Corporation’s Treasury Single Account in US dollars, including the reported $470.5 million.
“On the purported recovery of N8 billion by the Nigeria Police Force, the Corporation is not aware of any change in the subsisting Presidential directive to the effect that all of the US dollar balances must be transferred to NNPC’s CBN Treasury Single Account in US dollars in addition, no such funds have been deposited into the Corporation’s CBN Treasury Single Account.
“Consequently, NNPC’s record of the US dollar funds still yet to be transferred by a few commercial banks cannot reflect the said recovery.
“While the Central Bank of Nigeria executes the Presidential directive to ensure complete transfer of US dollar funds to the Corporation’s CBN TSA, it is pertinent to reiterate our earlier position that NNPC will resist every attempt to subject these funds, which have been in the full view of Government, to five percent whistle blowing fees as this would be unreasonable and a sheer waste of public funds,” he said.
The Central Bank of Nigeria (CBN) has continued its intervention in the retail Secondary Market Intervention Sales (SMIS) by injecting a total of $317.52million in that segment of the market in addition to CNY58.40 million in the spot and short-tenored forwards segment.
The figures obtained from the apex Bank on Friday revealed that the US dollar-denominated interventions were only for actors in the agricultural and raw materials sectors while the Yuan was for Renminbi denominated Letters of Credit.
Confirming the figures, the CBN’s Director, Corporate Communications Department, Mr. Isaac Okorafor, said the Bilateral Currency Swap Agreement (BCSA) with the Peoples’ Bank of China had continued to receive encouraging responses from customers.
While noting that Friday’s sale was the fifth in the series of interventions, he said the BCSA was achieving its major objectives of reducing the use and influence of a third currency transactions; reducing the pressure on the naira exchange rate; easing trade transactions between Nigeria and China and maintaining financial market stability in Nigeria.
Mr. Okorafor further assured that the CBN would remain committed to ensuring that all the sectors of the foreign exchange market continue to enjoy access to the needed foreign exchange by Nigerians.
It will be recalled that the Bank on Tuesday, September 18, 2018 intervened in the inter-bank Foreign Exchange Market to the tune of $210 million.
Meanwhile, $1 exchanged for N361 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.
Source News Express
The operating licence of Skye Bank has been withdrawn, Governor of the Central Bank of Nigeria (CBN), Godwin I. Emefiele, CON, announced on Friday evening in Abuja, the nation’s capital.
He told the media: “You will recall that on 4th July 2016, we took a regulatory action on Skye bank Nigeria PLC. Specifically, this action led to the resignation of the Chairman, all Non-Executive Directors on the Board as well as the Managing Director, Deputy Managing Director, and the two longest-serving Executive Directors on the Management Team
“At that time the proactive action was informed by unacceptable corporate governance lapses as well as the persistent failure of Skye Bank PLC to meet minimum thresholds in critical prudential and adequacy ratios, which culminated in the bank’s permanent presence at the CBN Lending Window.
“The focus of the action then was to save depositors’ funds and to ensure that the bank continued as a going concern, being a systemically important bank. Part of our intention was also to stem the imminent job losses to staff if a liquidation option had been adopted. These objectives have been fully achieved and the bank has been able to meet customer obligations, having curtailed the liquidity haemorrhage and restored depositor confidence.
“Indeed, the bank’s performance has improved considerably compared to the pre-July 2016 era.
“The result of our examinations and forensic audit of the bank has, however, revealed that Skye bank requires urgent recapitalisation as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN. The shareholders of the bank have been unable to recapitalise it.
“As a responsible and responsive regulator and in consultation with the Nigerian Deposit Insurance Corporation (NDIC), we have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye bank. The strategy is for the Asset Management Company of Nigeria (AMCON) to capitalise the Bridge Bank and begin the process of sourcing investors to buy out AMCON. By this decision, the licence of the defunct Skye Bank is hereby revoked.
“We wish to assure all depositors that under this arrangement, their deposits shall remain safe and that normal banking services shall continue in the new bank on Monday, 24th September, 2018, to enable customers to transact their businesses seamlessly.
“Thus, all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.
“Given the good performance of the board and management, the CBN shall retain them. In addition, all employees of Skye Bank shall be absorbed by Polaris Bank under a new contract unless any employee decides to opt out.
“We wish to assure the general public that the Nigerian banking industry remains safe and resilient and that the CBN will continue to live up to its responsibilities of promoting stability in the banking and financial system.”
Source News Express