Business
Naira crash: CBN moves against banks engaged in illegal sales of forex
The Central Bank of Nigeria (CBN) has threatened to sanction commercial banks engaging in illegal sales of foreign exchange.
This is coming on the heels of the crash of the naira to over N950/$1 at the parallel market as forex scarcity worsens and allegations that the deposit money banks are diverting most of their forex to the unofficial foreign exchange market rather than selling to their customers.
This was made known by the acting CBN Governor, Folashodun Shonubi, while delivering a lecture titled, “Diaspora Remittances and Nigerian Economic Development”, in Abuja.
Shonubi emphasized the importance of strict steps to restrict illegal remittances and channel them via appropriate means to maximise economic growth.
Shonubi at the event announced the formation of a commission to pay unscheduled visits to banks accused of unlawfully selling dollars.
He said,
- “We need to name and shame commercial banks involved in such malpractices.’’
The acting governor also emphasized the shortcomings of the present remittance system, in which he estimated that the cost of transferring money to Sub-Saharan Africa from the diaspora at about 8–9% of every $100, which is described as the highest in the world.
He, however, noted that Nigeria received about $16.7 billion in remittances, with the vast majority of the money outside the official foreign exchange market.
Shonubi stated,
- “We are working hard to encourage individuals to bring money into the formal sector rather than relying on informal channels, which have become difficult to manage.’’
The CBN boss noted that despite efforts to induce individuals to engage in formal market transactions by granting a N5 refund through its Naira 4 Dollar scheme, the policy was still ineffective prompting the N5 rebate to be discontinued.
He, however, still acknowledged the usefulness of incentives in attracting people to the formal market.
He stated.
- “We will rename the foreign exchange market, known as the I & E market, to the Nigerian Foreign Exchange Market, as it is the sole market we acknowledge.”
The Commandant of the National Institute of Security Studies, Ayodele Adeleke, emphasized the relevance of the lecture series in extending the country’s awareness of security concerns. He stated that the series was one of the tactics embedded in the mode of the 10-month course to promote and give a focal point for the programme.
Business
Emirates Airlines return to Nigeria October 1
Emirates Airlines has confirmed its return to operations in Nigeria starting October 1, 2024.
The airline disclosed this via its official X handle Thursday.
“We’re back, Nigeria! We’ll be resuming services to Lagos from 1 October 2024, and we can’t wait to offer unrivalled connectivity to Dubai and beyond to over 140 cities,” the tweet read.
The airline will be operating a daily service between Lagos State and Dubai, and will offer customers more choice and connectivity from Nigeria’s largest city to, and through, Dubai.
Business
Naira appreciates at official window, depreciates at parallel market
The naira depreciated to N1,550 against the dollar at the parallel section of the foreign exchange (FX) market on Wednesday.
The current FX rate signifies a decline of 1.95 percent from the N1,520/$ reported on May 13.
Currency traders, also known as street traders, in Lagos, quoted the buying rate of the local currency at N1,510/$ and the selling rate at N1,550/$ — leaving a profit margin of N40.
At the official window, the local currency appreciated by 4.21 percent against the dollar from N1,520.4/$ on May 14 to close at N1,459.02 on Wednesday.
According to FMDQ Exchange, a platform that oversees the official window, a dollar was sold as high as N1,593 and at a low rate of N1,401 during trading hours.
The daily foreign exchange market turnover was $289.14 million.
On May 14, the Economic and Financial Crimes Commission (EFCC) said foreign missions based in Nigeria use third parties to transact in foreign currencies.
Speaking during an interview, Wilson Uwujaren, EFCC’s acting director of public affairs, said the commission has a task force whose duty is to fight the abuse of the naira and discourage transactions in dollars within Nigeria — which is against the law.
Business
To spur liquidity’ — CBN grants approval in principle to 14 new IMTOs
The Central Bank of Nigeria (CBN) has granted approval in principle (AIP) to 14 new international money transfer operators (IMTOs).
IMTOs carry out cross-border fund transfer services for individuals and entities residing abroad to recipients in Nigeria.
Approval in principle is a conditional acceptance of a proposal subject to meeting other requirements for final approval.
CBN granted the AIP amid plans to double foreign currency remittance flows through formal channels.
Hakama Sidi Ali, CBN’s acting director of corporate communications, spoke in Abuja on Wednesday.
Ali said the approval will help increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation among IMTOs to lower the cost of remittance transactions and boost financial inclusion.
“This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira,” she said.
Ali also said the move by the apex bank is a means of reducing the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.
On April 20, Olayemi Cardoso, CBN governor, said the financial regulator collaborated with IMTOs to collectively commit to doubling remittance flows through formal channels into Nigeria.
“We’ve had very productive discussions with leading IMTOs where we collectively committed to doubling remittance flows through formal channels into Nigeria in the immediate short to medium term,” Cardoso said.
He said CBN has also set up a task force to address bottlenecks hindering flows through formal channels.
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