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Central Bank of Nigeria (CBN) on Tuesday injected $210 million into the inter-bank foreign exchange (forex) market.
It offered $100 million to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment got $55 million.
 
Another $55 million was allocated to invisibles such as tuition fees, medicals and Basic Travel allowance (BTA).
 
Meanwhile, the naira continued to exchange at an average of N360/$1 in the Bureau De Change (BDC) segment of the market on Tuesday, July 17.
 
In a statement, the bank’s Acting Director of Corporate Communications Department, Isaac Okorafor, confirmed the figures and restated the bank’s resolve to continue to intervene in the interbank forex market, in line with its pledge to sustain liquidity in the market and maintain stability.
 
Okorafor maintained that the continued forex intervention was to ensure that the apex bank met genuine customers’ requests in various segments of the market.
 
 
The Guardian.
Regional Head, Middle East and Africa, WorldRemit, Andrew Stewart, has said that its company is committed to ensuring that money transfer is seamless, secure, efficient and cost effective.
 
This is coming barely a month when the digital money transfer service company partnered First Bank of Nigeria Limited (FBN) to help migrants abroad transfer money directly to their FBN accounts in Nigeria.
 
Speaking at a roundtable in Lagos, Stewart said WorldRemit was pioneering a mobile-first approach to remittances, offering instant transfers.
 
“Using WorldRemit is easy because we do the hard bit, connecting hundreds of banks, money agents, mobile operators and payment systems around the world. These were never designed to work together, but WorldRemit makes it happen.
 
“As opposed to most of its competitors, WorldRemit prides itself in offering instant money transfers, powered by our 100 percent cashless transfers on the send side, and our mobile-drive approach.
 
A typical customer in the US, UK or Canada might send around £100 per transaction for bank deposit.
 
“Our fees in Nigeria are very competitive to make sure our customers can send as often as needed to support their friends and family at home,” he added.
 
He said that since its launch in Nigeria in 2011, the company has entered into partnership with leading banking institutions, including First Bank of Nigeria Limited, Guaranty Trust Bank, Access Bank Plc and Ecobank Plc.
 
Stewart assured that its system is fraud proof as the company has three levels of compliance checks in place to check the activities of fraudsters.
 
WorldRemit is the leading digital money transfer service that makes sending money as easy as sending an instant message.
 
Known for its mobile-first approach, the majority of WorldRemit’s customers are migrant workers who send money back home to support their friends and family.
 
Users can even pay for school fees, utility bills and groceries via their mobile phones.
 
Source: The Guardian

I&E Window transacts $900m, as reserves stagnate at $47.6 billion
There was near excess in the quantity of money in circulation last week, save for the increased mop up exercise by the Central Bank of Nigeria (CBN), following the repayments of N66.7 billion and N377.6 billion worth of Treasury Bills (T-Bills) and Open Market Operations.

The movement in system liquidity during the week had risen in two of the four trading days, resulting to 3.7 per cent rise in the quantity of money in circulation to N842 billion compared to N812.1 billion in the preceding week.Consequently, the two most popular traded instruments among banks- Open Buy Back and the Overnight rates, trended southwards by 0.7 percentage points (ppts) and 0.5ppts to 2.8 per cent and 3.6 per cent respectively.

During the rollover of the instruments, investors showed apathy for short tenored bills, as they asked for higher rates, causing an under-allotment to reduce cost for government, which subsequently left a sizable quantity of money in circulation till the weekend.Analysts at Afrinvest Securities Limited said this week, despite the absence of maturing bills, except N183.3 billion worth of OMO maturities, the apex bank will sustain its trend of liquidity mop ups and money market rates could trend higher.

Similarly, at the foreign exchange market, the naira remained stable, defying the influence of speculations ahead of the biannual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, at the weekend, which increased oil production by one million barrels per day.

The decision, which is expected to influence global oil price, would further affect Nigeria’s external reserves that have remained stagnant in weeks at $47.6 billion, as crude oil accounts for a large proportion of the nation’s foreign exchange earnings.

Specifically, the reserves have stagnated in the last three weeks, with an earlier back and forth movement, as reports showed that Nigerian crude oil cargoes from the June programme took long before they were cleared, as demand was not strong enough and differentials were too high to spark much buying of July barrels.During the week, the Central Bank of Nigeria (CBN) continued its weekly intervention, offering $210 million through the Wholesale SMIS window to maintain stability, as well as sustain liquidity in the foreign exchange market.

Consequently, the CBN spot rate appreciated five kobo when measured week-on-week to N305.80 per dollar from N305.85 per dollar in the previous week, while at the parallel market, the naira traded flat for the second consecutive week at N362 per dollar.

In the same vein, the local unit, at the Investors and Exporters’ (I&E) forex Window, appreciated seven kobo week-on-week to N361/$ from N361.07/$ in the previous week.On the activity level, transactions improved by 15.1 per cent at the autonomous window, as investors exchanged about $900 million against $800 million recorded the previous week.

Source: The Guardian

Foreign exchange, forex, sales by the Central Bank of Nigeria (CBN) was dominated in 2017 by Forwards contracts which accounted for $11.2 billion or 70 percent of total sales. Unlike spots transactions which involves immediate delivery, forwards are transactions which involves delivery of forex at a future agreed date but at current exchange rate. 
 
A breakdown of the annual report of the Financial Market Department of the apex bank for 2017 revealed that forex sales for forward contracts rose by 44 percent to $11.2 billion in 2017 from $5.8 billion in 2016. This exceeded the 30 percent increase in total foreign exchange sales by the CBN which rose to $15.8 billion in 2017 from $12.2 billion in 2016. CBN Headquarters Managing Director/Chief Executive, Financial Derivatives Company Limited, Mr. Bismarck Rewane, however, noted that this trend will not persist in 2018, as the conditions that necessitated the dominance of forwards contract no longer exist. Speaking to Vanguard, he said: “When you buy into a forward contract, you are buying at the official rate but they will deliver to you in 90 days and in some cases 120 days. “When the CBN had shortage of foreign exchange they managed it by doing forwards contract but now that the reserves are strong, they are doing spot transactions. 
 
The benefit of the forwards is that it helps to manage the cash flow and secondly, the implied rate is different from the effective rate. That is, if they sell to you at N330 per dollar, and take your money 90 days ahead, by the time you add the treasury bills rate to it, you will find out that effectively you have paid N340 per dollar. So it is another way of devaluing the currency. “But the constraints that led to that last year are no longer there. We have gone beyond that now. That time the reserves were doing $23 billion to $24 billion, but now we don’t need to panic.” The report had stated: “In 2017, the CBN maintained its direct intervention in the inter-bank foreign exchange market to cushion the demand pressure and ensure exchange rate stability. 
 
Consequently, a total of $15.82 billion was sold at the inter-bank segment. “This comprised $1.53 billion at the inter-bank spot, $1.39 billion for invisibles, $1.07  billion for SMEs,  $622 million at the I & E, while forwards sales were $11.19  billion. On the other hand, the Bank purchased $6.09 billion at the inter-bank market. Thus, net sales by the Bank amounted to $9.73 billion. 
 
The sum of $10.73 billion matured at the forwards segment, while $1.92 billion remained outstanding at end-December 2017. “In the preceding year, $12.16 billion was sold at the inter-bank market, comprising $6.30 billion spot and $5.85 billion at the forwards. In the same vein, the Bank purchased $130.98 million, resulting in a net sale of $12.24 billion. The sum of $4.29 billion matured at the forwards, while $1.56 billion remained outstanding at end-December 2016.”
 
 
Source: VanguardNG

THE Nigerian Government has taken steps to take over bank accounts without Bank Verification Number (BVN) as a Federal High Court sitting in Abuja has frozen all such accounts by stopping all outward payments, operations or transactions.

The court order may affect over 15 million bank accounts with deposits running into billions of naira as, according to the Nigeria Inter Bank Settlement System Plc (NIBSS), the organisation saddled with registering bank customers for BVN, out of the 45.85million bank accounts in the country, only 30,511,506 had been issued with BVN numbers as of October 8, 2017.

The Attorney-General of the Federation, Mr Abubakar Malami (SAN), had instituted an application seeking for an interim order directing all commercial banks in the country to disclose all individual and corporate accounts in their custody not covered by BVN.

The court, presided over by Justice Nnamdi O. Dimgba, gave the interim order in Suit no: FHC/ABJ/CS/911/2017 to all money deposit banks to disclose all bank accounts that are not linked with a BVN, declare the account numbers of such acounts, the branch in which the accounts are domiciled as well as the outstanding balances and advertise same in a widely circulated newspaper within seven days while giving owners of the account 14 days to identify themselves, failing which the funds in such accounts would be forfeited to the Federal Government.

The court, in an ex parte motion, said it gave the order because running a bank account without a BVN is “contrary to Section 3 of the Money laundering Act 2011 and Central Bank of Nigeria (CBN) guidelines.”

The government has been concerned that its move to unveil those hiding stolen funds in the banks was being frustrated by bank officials colluding with them by allowing them to run accounts without BVN.

Recently, the Acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, raised the alarm that some banks were helping corrupt government officials to operate secret accounts without BVN.

While delivering a lecture at a workshop organised by the Chartered Institute of Bankers of Nigeria in Lagos, on September 26, 2017, he said some bank officials were in the habit of “opening accounts for government officials even after the introduction of the Treasury Single Account, thereby allowing government funds to be diverted.”

According to him, “There are several bank accounts that are not linked to BVN and are still active.”

Similarly, the CBN had last week, in a memo signed by Mr Dipo Fatokun, Director Banking and Payment System, directed all banks to properly capture customers’ BVN data and ensure that a customer’s names on the BVN database are the same in all of his/her accounts, across all banks.

In the memo entitled the ‘‘Regulatory Framework for BVN and Watch-list Operations in Nigeria,’ the CBN said this became necessary to forestall fraudulent activities of bank customers.

The framework stated that “change of customer records shall be allowed as follows: Name change with supporting documents, subject to a maximum of twice a year; change of date of birth shall be allowed only once with supporting documents; minor correction due to errors supported with valid means of identification.”

According to the CBN framework, a watch-listed individual shall not be allowed to enter into new relationship with any bank.

The court also ordered that the banks “should disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and other relevant information related to the transactions made on the accounts.”

The CBN, had in conjunction with the Bankers Committee, embarked upon the deployment of a centralised BVN system and launched the project in February 2014 as part of the overall strategy to ensure effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system. The BVN gives a unique identity across the banking Industry to each customer of Nigerian banks.

 

Credit: Nigerian Tribune

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