Central Bank of Nigeria (CBN) has
continued its intervention in the inter-bank foreign exchange market by
injecting $210 million into key portfolios of the market and continues
its currency swap deal with China.
continued its intervention in the inter-bank foreign exchange market by
injecting $210 million into key portfolios of the market and continues
its currency swap deal with China.
The intervention fund released on August
14, 2018, is meant to sustain flow small and medium enterprises, Forex
window and travel allowances, just as the swap deal is to ease pressure
on the foreign exchange market.
14, 2018, is meant to sustain flow small and medium enterprises, Forex
window and travel allowances, just as the swap deal is to ease pressure
on the foreign exchange market.
The Acting Director,
Corporate Communications, CBN, Mr Isaac Okorafor, said in Abuja
that the apex bank offered $100 million as wholesale interventions and
allocated US$55 million to Small and Medium Enterprises.
Corporate Communications, CBN, Mr Isaac Okorafor, said in Abuja
that the apex bank offered $100 million as wholesale interventions and
allocated US$55 million to Small and Medium Enterprises.
Okorafor said another US$55 million was
allocated to customers requiring foreign exchange for business and
personal travels, tuition or medical fees, among others.
allocated to customers requiring foreign exchange for business and
personal travels, tuition or medical fees, among others.
The CBN spokesman said the bank was
pleased with the performance of the naira because it had continued to
enjoy stability against the dollar and other major currencies of the
world in recent times.
pleased with the performance of the naira because it had continued to
enjoy stability against the dollar and other major currencies of the
world in recent times.
He reassured the public
that the CBN would continue to intervene in the interbank foreign
exchange market to ensure liquidity in the foreign exchange market and
maintain stability.
that the CBN would continue to intervene in the interbank foreign
exchange market to ensure liquidity in the foreign exchange market and
maintain stability.
Okoroafor reiterated, in a
statement, that the steps taken by the CBN in foreign exchange
management had resulted in further reduction in the country’s import
bills and accretion to its foreign
reserves.
statement, that the steps taken by the CBN in foreign exchange
management had resulted in further reduction in the country’s import
bills and accretion to its foreign
reserves.
CBN on August 10,
intervened in the Retail Secondary Market Intervention Sales (SMIS) to
the tune of $327 million in the agricultural and raw materials and 69
million Chinese Yuan in the
spot and short-tenored forwards.
intervened in the Retail Secondary Market Intervention Sales (SMIS) to
the tune of $327 million in the agricultural and raw materials and 69
million Chinese Yuan in the
spot and short-tenored forwards.
Meanwhile, the naira continued to
maintain its strong stand against major currencies around the globe,
exchanging for N360 to a dollar in the Bureau De Change segment of the
market.
maintain its strong stand against major currencies around the globe,
exchanging for N360 to a dollar in the Bureau De Change segment of the
market.
Meanwhile, the CBN has resolved to
sensitize stakeholders in Abuja and the adjoining States to the
Bilateral Currency Swap Agreement between the CBN and the People’s Bank
of China (PBoC) signed on April 27, 2018.
sensitize stakeholders in Abuja and the adjoining States to the
Bilateral Currency Swap Agreement between the CBN and the People’s Bank
of China (PBoC) signed on April 27, 2018.
The Naira-Yuan swap deal is set to be
achieved as part of strategies to reduce the huge dollar demand and
pressure on the local currency.
achieved as part of strategies to reduce the huge dollar demand and
pressure on the local currency.
Nigerian officials and those from China have met to fine tune the deal, CBN Governor Godwin Emefiele, said.
According to him, there is a lot of
“networking meetings going on, and I can assure you that meetings are
going on with some of our partners, particularly, China.”
“networking meetings going on, and I can assure you that meetings are
going on with some of our partners, particularly, China.”
The agreement will allow the two sides to
swap a total of 15 billion Chinese yuan (2.35 billion dollars) for 720
billion Nigerian naira, or vice versa, in the next three years, the
People’s Bank of China (PBOC) said on its website.
swap a total of 15 billion Chinese yuan (2.35 billion dollars) for 720
billion Nigerian naira, or vice versa, in the next three years, the
People’s Bank of China (PBOC) said on its website.
The move is aimed at facilitating
bilateral trade and investment and promoting the financial stability of
both sides, the PBOC said. The deal can be extended by mutual consent.
bilateral trade and investment and promoting the financial stability of
both sides, the PBOC said. The deal can be extended by mutual consent.
A currency swap deal allows two
institutions to exchange payments in one currency for equivalent amounts
in the other to facilitate bilateral trade settlements and provide
liquidity support to financial markets.
institutions to exchange payments in one currency for equivalent amounts
in the other to facilitate bilateral trade settlements and provide
liquidity support to financial markets.
In 2014, the CBN’s deputy governor,
Kingsley Moghalu, said the bank was looking to increase the percentage
of Yuan foreign reserves in its possession from two per cent to seven
per cent.
Kingsley Moghalu, said the bank was looking to increase the percentage
of Yuan foreign reserves in its possession from two per cent to seven
per cent.
According to him, 85 per cent of its
foreign reserves were in dollars and it needed to have more in Chinese
Yuan, as the country was taking a more important place in global trade.
foreign reserves were in dollars and it needed to have more in Chinese
Yuan, as the country was taking a more important place in global trade.
“It was clear to us that the future of
international economics and trade will shift in large part to business
with and by China. Ultimately the renminbi (Yuan) is likely to become a
global convertible currency,” Moghalu said.
international economics and trade will shift in large part to business
with and by China. Ultimately the renminbi (Yuan) is likely to become a
global convertible currency,” Moghalu said.
Since 2014, the world market has
recognised the Yuan as a likely global reserve currency, a replacement
for the dollar, which has led countries like Ghana, South Africa and
Zimbabwe to integrate the renminbi (Yuan) into their
financial markets.
recognised the Yuan as a likely global reserve currency, a replacement
for the dollar, which has led countries like Ghana, South Africa and
Zimbabwe to integrate the renminbi (Yuan) into their
financial markets.
As a result of this, trade (however
imbalanced) has increased between certain countries on the continent and
China, as well as providing a fertile ground for demand for the
currency on the continent.
imbalanced) has increased between certain countries on the continent and
China, as well as providing a fertile ground for demand for the
currency on the continent.
