Business

Businesses suffer as dollar shortage hits Egypt

Published

1 year ago

January 2, 2023 2:06 pm

BodexNG

Egypt is faced with a foreign exchange crisis that has affected businesses, Financial Times is reporting.

Importers have been adversely affected by the country’s foreign exchange shortage, according to the report.

Egypt uses a flexible exchange rate regime where the FX rate is dependent upon the supply and demand of money in the market.

The first three weeks of Russia’s invasion of Ukraine in February led to $20 billion of outflows from the country as foreign portfolio investors rushed to safe havens.

Despite $13 billion in deposits from the United Arab Emirates (UAE), Saudi Arabia, and Qatar, and another $3.3 billion in asset sales to the UAE in 2022, foreign currency has remained in desperately short supply for the import-dependent country, the report noted.

Last week, Abdel Fattah al-Sisi, president of Egypt, had said banks would secure the foreign currency necessary to clear a backlog of imports within four days.

Prime Minister Mostafa Madbouly of Egypt also said $9.5 billion worth of goods are still held up at the country’s ports.

According to the report, the inflationary impact of the war in Ukraine on prices for basic commodities such as wheat has added to pressure on the country’s foreign currency resources, forcing the Central Bank of Egypt (CBE) to devalue the pound in March and October.

In an effort to conserve foreign currency, the CBE placed restrictions on imports in March. The requirement to use letters of credit slowed the process and created a backlog of unfulfilled demand for dollars, according to Financial Times.

The report noted that priority was also given to access, with basic commodities such as staple foods and medicines at the top of the list.

The CBE cancelled the requirement to use letters of credit on December 29.

The two devaluations have reduced the pound from around E£16 to the dollar to E£24.7, with the black market rate even lower, Financial Times reports.

It said the CBE increased interest rates by 300 basis points on December 22, taking the overnight deposit rate to 16.25 percent.

The rise surpassed analysts’ expectations and reflected increasing concern about inflation and the falling pound, according to London-based consultancy Capital Economics.

Mohamed Abu Basha, head of macroeconomic analysis at Cairo-based investment bank EFG-Hermes, said the shift to a flexible exchange rate could not “happen overnight”, and that the authorities needed to “ideally first build up a buffer of foreign currency to help clear the backlog of demand” before moving on the exchange rate.

On his part, Farouk Soussa, an economist at Goldman Sachs, outlined the difficult options facing Cairo as it sought to build up liquidity to deal with near-term demand for dollars.

“The CBE could clear the market by continuing to raise rates, floating the currency, and restricting the money supply, but the implications for prices and growth are problematic,” he said.

“The authorities’ preferred option is to wait for inflows from the Qataris, the Emiratis, and the Saudis to buy assets in Egypt, but that is also uncertain.”

Business

JUST IN: CBN reduces banks’ LDR to 50%

Published

2 days ago

April 17, 2024 4:51 pm

BodexNG

The Central Bank of Nigeria has announced a review of the loan-to-deposit ratio (LDR) for banks, from 65 percent to 50 percent to align with the current monetary tightening.

LDR is used to assess a bank’s liquidity by comparing its total loans to its total deposits.

An increase in the loan-to-deposit ratio allows banks to expand their credits to businesses and individuals, however, a decline in LDR reduces their ability to loan customers from depositors’ funds.

The CBN disclosed the increase in a circular on Wednesday titled ‘Re: Regulatory Measures to Improve Lending to the Sector of the Nigerian Economy’, signed by Adetona Adedeji, its acting director of the banking supervision department.

“Following a shift in the Bank’s policy stance towards a more contractionary approach, it is imperative to review the loan-to-deposit ratio (LDR) policy to align with the current monetary tightening by the CBN,” the apex bank said.

“Accordingly, the CBN has decided to reduce the LDR by 15 percentage points to 50%, in a similar proportion to the increase in the CRR rate for banks.

“All DMBs are required to maintain this level and are further advised that average daily figures shall continue to be applied to assess compliance.

“While DMBs are encouraged to maintain strong risk management practices regarding their lending operations, the CBN shall continue to monitor compliance, review market developments, and make alterations in the LDR as it deems appropriate.”

Business

WhatsApp launches chat filters to allow users find messages faster

Published

2 days ago

April 17, 2024 12:40 pm

BodexNG

WhatsApp, the messaging app, has introduced chat filters to allow users to navigate through messages faster and more efficiently.

The Meta-owned platform announced the new feature in a blog post on Tuesday.

WhatsApp said it launched the new feature so that users can get to their important messages without having to scroll through their full inbox.

The social media service said the chat filters have three different features: “All, Unread, and Groups”.

It added that users can choose between any of the three filters that will appear at the top of their chat list.

“Opening WhatsApp and finding the right conversation should feel quick, seamless, and simple,” the post reads.

“As people increasingly do more on WhatsApp, it’s more important than ever before to be able to get to your messages fast.

“We believe filters will make it easier for people to stay organized and find their most important conversations and help navigate through messages more efficiently.

“We will continue to build more options to help you focus on what matters most.”

In recent times, WhatsApp has been actively rolling out new features to enhance user experiences and keep up with evolving communication trends.

In July last year, the Meta-owned firm unveiled an instant video messaging feature.

On August 8, the social network introduced a screen-sharing feature to enhance the video calling experience on its platform.

WhatsApp also introduced a feature that allows users to operate multiple accounts on a single device.

Business

NCAA suspends three private jet operators for engaging in commercial flights

Published

3 days ago

April 16, 2024 2:42 pm

BodexNG

The Nigerian Civil Aviation Authority (NCAA) says it has suspended the permit of three private jet operators for engaging in commercial flights.

Chris Najomo, acting director general of the NCAA, announced the suspension of the three private operators in a statement read to all airlines on Tuesday.

This is coming a day after Festus Keyamo, minister of aviation and aerospace, said the federal government would arrest and sanction illegal flights and non-certified personnel.

Najomo said the use of private jets for commercial purposes got Keyamo’s attention in November 2023, prompting the minister to issue directives for the cessation of such activities.

“Subsequently, in March 2024, the NCAA had issued a stern warning to holders of the permit for noncommercial flight (PNCF) against engaging the carriage of passengers, cargo or meal for hire reward,” Najomo said.

“The authority had also deployed its official to monitor activities of private jet terminals across airports in Nigeria. As a consequence of this heightened surveillance, no fewer than three private operators have been found to be in violation of the annexure provision of the PNCF and part 9114 of the NCAA regulations.

“In line with our zero tolerance for violation of regulations, the authority has suspended the PNCF of these operators.

“To further sanitise the general aviation sector, I have directed that a reevaluation of all orders of PNCF be carried out on or before the 19th of April 2024 to ascertain compliance with regulatory requirements.”

Najomo also said all PNCF holders will be required to submit relevant documents to the authority within the next 72 hours.

“This riot act is also directed at existing air operators certificate (AOC) holders who utilise aircraft listed on the PNCF for commercial chatter operations,” Najomo said.

“It must be emphasised that only aircraft listed in the operation specifications of the AOC are authorised to be used in the provision of such charter services.

“Any of those AOC holders who wish to use the aircraft for charter operations must apply to the NCAA to delist it from their PNCF and include it into the AOC operations specifications.”

The NCAA also urged travellers not to patronise any airline or charter operator who does not hold a valid AOC issued by the NCAA when they wish to procure chartered operation services.

Najomo also encouraged legitimate players in the aviation industry to report the activities of such “unscrupulous” elements to the authorities promptly for necessary action.

Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others