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Business: Naira Rebounds As Banks Offload Excess Dollars

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Deposit Money Banks on Thursday made frantic efforts to offload their surplus dollar stocks ahead of the midnight February 1, 2024 deadline given by the Central Bank of Nigeria (CBN) to commercial banks to sell all excess foreign exchange holdings.

It was gathered that the treasury departments of the DMBs spent the entire day battling to sell their excess FX holdings. Officials processed several foreign exchange request forms of their customers as they sold more dollars to them.

The increase in the level of forex sale activities at the official foreign exchange market, it was learnt, led to the rebound of the naira at the parallel market on Thursday.

According to The Punch, several top bank executives under anonymity confirmed there were huge forex transactions in the banks.

As of 6pm on Thursday, bank officials especially those of the treasury departments, were making efforts to meet the new prudential requirements of the regulator.

Amid its fresh moves to stabilise the nation’s volatile exchange rate, the CBN had in a circular released on Wednesday, ordered DMBs to sell their excess dollar stocks latest February 1, 2024. The CBN also warned lenders against hoarding excess foreign currencies for profit.

According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them to profit from the volatile movements of exchange rates.

The new circular introduced a set of guidelines aimed at reducing the risks associated with these practices.

In the circular titled, “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, the CBN raised concerns over the growing trend of banks holding large foreign currency positions.

The circular read in parts, “The Central Bank of Nigeria has noted with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP). This has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks.”

The apex bank further directed banks with current NOPs exceeding its limits to adjust their positions and comply with the new regulations by February 1, 2024.

The latest circular came barely 48 hours after the CBN released a circular, warning banks and FX dealers against reporting false exchange rates, among others.

The new development came  on the heels of the adjustment of the methodology used for the calculation of the nation’s official exchange rate by the FMDQ Exchange, a situation that has moved the official exchange to about N1,500 from around N900/dollar.

Following the latest CBN directive which is aimed at unifying the official and parallel market rates of the local unit, several banks sold forex to their customers on Thursday.

The development led to a sharp rebound of the national currency in the official market. Bureau De Change operators in Lagos, Kano, and Abuja also pushed to sell their dollar holding amid fear the local unit might sustain the gain in coming days.

Alhaji Lawan Ismael, a BDC operator in Ikeja, Lagos, said he bought and sold the greenback for N1400/dollar and N1420/dollar, respectively.

Another BDC at the Lagos airport, Sabiu Abdullahi, said the greenback went for between N1400/$ and N1400/$. This, he said, was a huge rebound from over N1500/$ it sold on Wednesday.

In Abuja, the naira traded at the parallel market between N1,300/$ and N1,350/$.

A Bureau De Change (BDC) operator, Ibrahim Yahu told The PUNCH, “Today, because of our small action, you could not get a standard price. Those who bought today did so at risk. But the dollar sold between N1,300 and N1,350.”

The naira closed at N1,455.59/$ at the official window on Wednesday, according to the FMDQ Securities Exchange. This rate has been yet to be updated as of 09:39 pm Thursday.

Commenting on the effect of the circular, bank officials who pleaded anonymity said they were bound to ensure their books remain within the new FX prudential limit.

“All banks working to meet the deadline,” the chief financial officer of a tier-2 bank told said on Thursday evening.

Also, a top official of a tier-1 bank, while commenting on the development, said, “After the CBN directive, we had to push out the FX.”

Another official said, “All banks are pushing out funds now, and we are ready to sell. The key thing is profit here.”

Meanwhile, some bank officials said beyond the FX in banks, the CBN and the security agencies would need to beam their searchlights on politicians and government officials who are hoarding dollars in their homes.

As part of its effort to boost liquidity in the FX market, the CBN on Wednesday issued a new circular that removes the previous cap on exchange rates quoted by International Money Transfer Operators.

In a document titled, ‘Guidelines on International Money Transfer Service in Nigeria,’ the CBN asked IMTOs to make payments to customers only in Nigerian currency while using the prevailing exchange rate on the day the transfer is received.

BIG STORY

Lagos Ministry Demolishes Illegal Gatehouse After Attack On Workers [PHOTOS]

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The Lagos Ministry of Environment and Water Resources has commenced the demolition of an illegal gatehouse erected by the management of an estate on January 3, 2025.

The action follows repeated warnings from the ministry, which had earlier alerted the estate about the unlawful construction.

Sources revealed that the estate proceeded to build a soakaway system on the road immediately outside the entrance gate, despite several official warnings from the ministry.

This prompted the ministry’s task force to intervene on January 2, 2025, to dismantle the septic tank that was being constructed.

However, during the operation, workers from the ministry were reportedly attacked and locked up by the estate’s management.

In response to the harassment of its workers, the Lagos Ministry of Environment and Water Resources escalated its actions, directing the demolition of the illegal gatehouse on January 3, 2025.

The demolition is part of the ministry’s broader efforts to ensure that constructions adhere to legal and environmental standards.

Details later…

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BIG STORY

Inside Jigawa: One Dead, Groom Hospitalised As Bride Allegedly Poisons Wedding Guests

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A wedding in Jigawa State has turned tragic after a bride allegedly poisoned food served at the reception.

The incident reportedly left the groom critically ill and one of the wedding guests dead.

The incident occurred in the Jahun Local Government Area of the state.

Eyewitnesses suggested that the bride’s actions may have been driven by a personal vendetta.

Speaking on Friday, the state Police Public Relations Officer, Shi’isu Adam, confirmed the incident and stated that an investigation was underway.

“We received a report that the bride had tainted the food served at the wedding reception, leaving the groom critically ill.

“Police have arrested two suspects in connection with the alleged food poisoning incident that occurred during a wedding ceremony in the state,” Adam said.

He revealed that the two suspects are the bride and another female, adding that they are in custody and being interrogated by the Criminal Investigation Department of the command.

The police spokesperson added, “We will do everything in our power to ensure that justice is served.”

According to the police spokesman, all the wedding attendants who consumed the poisoned food have been discharged from the hospital, except for the one person who was confirmed dead.

“The command is currently investigating the circumstances surrounding the incident, and we will provide more details as soon as possible.

“For now, we can confirm that the incident occurred, and we are working tirelessly to unravel the facts. We urge the public to remain calm and assured that justice will be served,” he concluded.

The identities of the deceased, the groom, and other victims have not been disclosed by the authorities.

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BIG STORY

Peter Obi Hellbent On Inciting Nigerians Against President Tinubu, He’s A Doomsayer — APC

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The All Progressives Congress (APC) has described Peter Obi’s New Year message as “misleading and an attempt to score cheap political points.”

Obi, who was the presidential candidate of the Labour Party in the 2023 elections, used his New Year message to criticize President Bola Tinubu, expressing grave concerns over institutional corruption, mismanagement, poverty, hardship, and an escalating debt profile.

The former governor of Anambra stated that corruption has been deeply entrenched in government and nepotism has become the norm under Tinubu’s leadership.

He also demanded “vigorous, positive actions” from the administration to bring succour to Nigerians.

However, in a counter-statement on Thursday, Felix Morka, APC spokesperson, stated that Obi’s assessment contradicted all indicators showing that the nation’s economy is rebounding across various sectors.

Morka accused Obi and members of the main opposition Peoples Democratic Party (PDP) of relentlessly trying to incite public outrage against the Tinubu administration.

The APC further accused Obi of portraying himself as “a leading doomsayer, omniscient and philosopher’s stone” while failing to deliver “meaningful achievements during his eight-year tenure as governor in Anambra state.”

“In reality, 18 months later, the economy, under President Bola Ahmed Tinubu’s administration has shown a steady record of progress,” the statement reads.

“Despite these and other initial beneficial outcomes of ongoing reforms, the administration is doubling its effort to ensure their fullest benefits for the transformation of our country.

“It is a thing of irony that Obi, who now arrogates to himself to be omniscient and philosopher’s stone, when it comes to our nation’s challenges, left no record of significant achievement, let alone transformation of any kind, in his eight-year tenure as Governor of Anambra State.”

“Like his co-travellers in the PDP, Obi’s obsessive pessimism and endless but futile effort to incite public outrage against the administration is borne out of the realization that Tinubu is unwittingly cementing their political irrelevance by his visionary and full-throttle reform.”

“Under the banner of the Renewed Hope Agenda, President Tinubu is dutifully turning our nation’s fortunes around. We urge Nigerians to remain confident of better days ahead.”

The ruling party added that Tinubu’s goal is to reduce inflation from 34 percent to 15 percent in 2025.

“With the vigour in the administration’s war on corruption, evidenced by ongoing investigations and trial of well-heeled Nigerians, Obi’s pontification on the urgent need to tame corruption is a clear case of carrying coal to Newcastle,” the party added.

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