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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

IGP Egbetokun Finally Approves Hunger Protest, Asks Organisers To Submit Names, House Addresses, Others

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On Friday, Inspector-General of Police Kayode Egbetokun requested that all groups planning to participate in the upcoming nationwide protest provide their details to the Commissioners of Police in their respective states.

During a press briefing at the Force Headquarters in Abuja, Egbetokun explained that this request is aimed at ensuring a peaceful protest.

Additionally, Egbetokun revealed that the police have received intelligence indicating that foreign mercenaries are involved in the planned protest.

This information has raised concerns about potential violence and unrest, prompting the police to take proactive measures to maintain public safety and order.

By submitting their details, protest groups can help the police to better understand their plans and take necessary steps to prevent any potential disruptions or security threats.

He said, “We acknowledge the constitutional right of Nigerian citizens to peaceful assembly and protest. However, in the interest of public safety and order, we urge all groups planning to protest to provide necessary details to the Commissioner of Police in the state where the protest is intended to take place.

“To facilitate a successful and incident-free protest, they should please provide the following information.”

Other guidelines, according to him, are “stating the proposed protest routes and assembly points. 2. Expected duration of the protest. 3. Names and contact details of protest leaders and organizers.

“Measures to prevent hijacking by criminal elements, including key identifiers for possible isolation of potential troublemakers. By providing this information, the police will be enabled to deploy adequate personnel and resources to ensure public safety.

“Designate specific routes and areas for the protest to avoid conflicts with other events or activities. Establish clear communication channels with protest leaders to address any concerns or issues that may arise.

“Minimize the risk of violence, property damage, or other criminal activity. We encourage all protestors to cooperate with the police, obey the law, and adhere to global best practices for peaceful assembly to guarantee a safe and successful exercise of their rights.”

The top cop said they have been monitoring development surrounding protest threats, saying while some groups call for violent protests, emulating Kenya’s recent events, others advocate for peaceful demonstrations.

“However, some individuals promote peaceful protests with violent undertones, raising concerns about their sincerity. We have our history of violent protests in Nigeria, and I don’t believe we have to look to other countries to note the dangers of unchecked demonstrations.

“We commend patriots who have withdrawn from the protest due to the apparent sinister motives and ignorance of those calling for violence. We note those who have spoken out against any form of protest at this critical juncture, fearing enemies of our country may be manipulating the process.

“We confirm their fears are genuine, as we have credible intelligence on foreign mercenaries’ involvement in this planned protest. The Nigerian police urge all Nigerians to exercise caution and think twice before joining any protest group.”

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BIG STORY

BREAKING: Foreign Mercenaries Involved In Planned Hunger Protest — IGP Egbetokun

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On Friday, the Inspector General of Police, Kayode Egbetokun, revealed that intelligence gathered by the Force indicates that foreign mercenaries are involved in the planned nationwide protest.

During a press briefing in Abuja, Egbetokun warned Nigerians to exercise extreme caution and carefully consider the consequences before participating in any protest group.

Egbetokun said, “We have been monitoring development surrounding protest threats. While some groups call for violent protests, emulating Kenya’s recent events, others advocate for peaceful demonstrations.

“However, some individuals promote peaceful protests with violent undertones, raising concerns about their sincerity. We have our history of violent protests in Nigeria, and I don’t believe we have to look to other countries to note the dangers of unchecked demonstrations. We commend patriots who have withdrawn from the protest due to the apparent sinister motives and ignorance of those calling for violence.

“We note those who have spoken out against any form of protest at this critical juncture, fearing enemies of our country may be manipulating the process. We confirm their fears are genuine, as we have credible intelligence on foreign mercenaries’ involvement in this planned protest. The Nigerian police urge all Nigerians to exercise caution and think twice before joining any protest group.”

He urged citizens to think twice before joining the protests, citing the potential risks and unknown motivations of external influences.

 

More to come…

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BIG STORY

Alaba Traders Oppose Planned Hunger Protests, Reaffirm Belief In Tinubu’s Governance

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Chief Camilus Amajuoyi, President General of Alaba International Market in Ojo, Lagos, has announced that the market’s members will not participate in the planned nationwide protests.

This decision, he explained, is not due to a lack of awareness of the current economic hardships, but rather a belief that mass protests may not be the most effective solution at this time. Amajuoyi emphasized that many traders in the market rely on daily income and cannot afford to disrupt their business activities.

He highlighted the struggles of the informal sector, which includes many market members, who have been severely impacted by the tripling of business costs without receiving any government palliatives, incentives, or interest-free loans to alleviate their difficulties.

He however expressed his confidence in President Bola Ahmed Tinubu’s ability to address the nation’s pressing issues.

“The fluctuating exchange rates and high costs of duties at national ports, coupled with increased transportation expenses, have made it nearly impossible for business owners to plan effectively. These factors have contributed to the sharp rise in the prices of goods and services across the country.

“These are realities staring Nigerians in the face, from the North, East west and South of the nation. Even at that, we members of Alaba International market unequivocally state that we are not going to partake in any planned protest in Nigeria, we are not closing our market in solidarity with any group or persons with regard to any protest.

“We believe that President Bola Ahmed Tinubu will definitely find a lasting solution to the numerous challenges facing Nigerians now, ranging from insecurity, high cost of food, drugs, transportation, bad roads, corruption among other things,” Amajuoyi said.

Amajuoyi however decried the perilous state of the only access road to Alaba International Market, which has caused numerous accidents involving heavy-duty trucks.

He urged the Lagos State government to prioritize the repair of this critical route and focus on other projects that could significantly reduce the suffering of the masses.

He also warned potential protesters to stay away from Alaba International Market to prevent any looting or damage to goods.

He called on the Lagos State government, Nigerian police, military, DSS, and other security agencies to ensure that all market places are protected from criminal elements.

“Our market will not be a venue for protests, and we will not tolerate any disruptions,” Amajuoyi stated.

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