Business
CBN order Banks to Stop Naira’s free fall by selling dollars in its vaults
The Central Bank of Nigeria (CBN) has ordered Deposit Money Banks (DMB) to selloff their excess dollar-holdings by Thursday February 1, 2024 to help stablise the local currency, the Naira in the forex.
The directive was conveyed in circular on Wednesday January 30, 2024 by the apex bank.
In the circular, the regulator noted that the DMBs were hoarding in excess of $5 billion which if released into circulation would help stem the continues slide of the Naira.
It also noted that the essence of the DMBs hoarding the US$ was to benefit from the increasing value, being attracted by the local currency’s dwindling fortune.
In the circular titled, “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, the CBN raised concerns over the growing trend of banks keeping high volumes of foreign currencies in their tills.
This is coming barely 48 hours after the CBN released a circular, warning banks and FX dealers against reporting false exchange rates, among others.
The new development also 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.
On this, @Imranmuhdz cited a top banker thus, “Just as some Nigerians prefer to keep their money in dollars because naira is not a good store of value, banks also hold excess dollar liquidity to make gains. They do their own at institutional level.
“What the CBN is saying with this new circular is that, you cannot hold excess dollar liquidity again. Any foreign exchange you are holding must be committed to something, a transaction or obligation you can proof (sic).
“Banks have made a lot of revaluation gains. Some banks, I believe, got approval under the last administration to hold more dollar than the requirement.
“The idea is that if banks sell all these excess dollars, there will liquidity and the exchange rate will stabilise. Foreign investors will come in.”
The Nigerian Economic Summit Group (NESG) has projected that the country has the potential to achieve a 5.5% growth in Gross Domestic Product (GDP) if critical policy reforms are sustained.
This was disclosed on Thursday during the launch of the NESG’s 2025 Macroeconomic Outlook report.
Speaking at the event, the Chief Economist and Director of Research & Development at NESG, Dr. Olusegun Omisakin, highlighted the need for more efficient policy implementation to unlock Nigeria’s economic potential.
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“We believe at the optimal level, if we embark on more efficient policy reforms, the Nigerian economy has the potential, the GDP to end up at 5.5 per cent, and we believe that this is achievable,” Omisakin stated.
More to follow……….
The Central Bank of Nigeria (CBN) has announced the release of the Nigerian Foreign Exchange (FX) Code, a set of guidelines designed to promote ethical conduct among authorized dealers in the country’s FX market.
In a statement, the apex bank disclosed that the official launch of the Code would take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
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“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote the ethical conduct of authorised dealers in the Nigerian Foreign Exchange Market,” the statement read.
The introduction of the FX Code is expected to enhance transparency, accountability, and professionalism within Nigeria’s foreign exchange ecosystem, aligning it with global best practices.
The event is anticipated to attract key stakeholders in the financial and banking sectors, as well as representatives from authorized FX-dealing institutions across the country.
The 47th President of the United States, Donald Trump attracted up 3 trillion dollars in investments into the country’s economy in his first full day at work.
This was gleaned from the verified handle of the POTUS on micro-blogging site, X, on Wednesday.
Biztellers reports that the POTUS is focused ensuring at least $1 trillion investment daily for the first seven days of his return to the White House, which would be driven by key clearly identified areas, including artificial intelligence.
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President Trump wrote, “In total, before the end of my first full business day in Washington and the White House, we’ve already secured nearly $3 trillion of new investments in the United States.
“And probably, that’s going to be six or seven by the end of the week.”
In a short video clip accompanying the statement, President Trump assured that the surge in investments would likely hit $7 trillion within his first seven days as the 47th POTUS.
He highlighted that artificial intelligence had proven to be an area lots of willing entrepreneurs had shown much appetite for.
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