Forex crisis:  CBN Gov  meets Buhari in Aso Rock


… Keystone bank to forex market

…… to give forex to small-scale importers of items not valid for FX

Governor of Central Bank of Nigeria, CBN, Godwin Emefiele yesterday briefed President Muhammadu Buhari over the instability in the country’s foreign exchange market which has continued to impact negatively the value of Naira.

Emerging from the presidential wing of the Villa after a closed door meeting, Emefiele told State House correspondents that he updated the president on efforts being made by the apex bank to stabilize the local currency.

The governor stated that the economy was also looking good with the rising price of crude oil which he said was “oscillating between $50 to $55 and $56” per barrel.

According to him, the rise in crude oil prices at the international market was a boost to the stability of Naira.

The value of the nation’s currency, he noted, is currently hovering between N380 and N385 in the parallel market.

Emefiele said: “Basically, as it’s expected, what we normally do is from time to time is to brief the President about activities of Central Bank of Nigeria (CBN)  particularly at this time as it relates to efforts that the central bank is doing to stabilize the Forex market.

“And we briefed him regarding the activities so far and he was very delighted to hear that the market is stabilizing at the level that it is right now and I am saying the parallel market which currently stabilizes at between N380 and N385.

“There is no secret. It’s about the fact that at this time we have seen production of crude and increasing export of crude also. The fact that we have seen also crude prices oscillating to between $50 to $55 to $56. It has helped our revenue position and had also provided some ammunition for the Central Bank to defend the currency.

“Given what we have right now, the fact that the revenues are looking good, the state of the economy is good and I believe that we are going to pull out of the problem in due course”

Asked if the intervention of the apex bank which comes by way of injecting more funds into the forex market was sustainable, Emefiele said that it was the responsibility of CBN to ensure that businesses were not stifled on the account of dearth of foreign exchange.

“Our responsibility as CBN is to do what we are doing at this time. Nigerians or importers, people who need foreign exchange to do businesses need these foreign exchanges to conduct businesses and given the fact that we are able to increase our EFEX revenues, the natural thing to do is to make the foreign exchangeavailable to those who need them to import or to carry out eligible transactions”, he said.

 In the meantime, Keystone Bank yesterday said CBN had readmitted it into the spot and wholesale forwards segment of the foreign exchange market. The bank said in a statement issued in Lagos that the CBN readmitted it sequel to the provision of evidence of sales of foreign exchange to Small and Medium scale Enterprises (SMEs). It also said the re-admission was because that the bank had been selling to the SMEs since the introduction of the special window to such businesses.

It  will be recalled that the CBN banned 14 banks from the weekly wholesale spot and forwards market leaving only eight banks.

According to the CBN, the banks were sanctioned for failure to adhere to the foreign exchage supply policy to SMEs thereby frustrating the efforts of small businesses that needed foreign exchange. The eight banks that were not suspended include; Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Heritage Bank Plc, Jaiz Bank, Sterling Bank Plc, Unity Bank Plc and Zenith Bank

The CBN re-admitted Keystone Bank along with other banks to the weekly wholesale spot and forwards intervention.

Mr Hafiz Bakare, the Acting Managing Director of Keystone Bank, said: “SMEs are an integral part of the economy of Nigeria and as such we at Keystone Bank are committed to supporting this sector. “We are pleased to have clarified the banks position with the CBN as we have always shown support for SMEs through our work with farmers, manufacturers, schools and other business owners.” Bakare said that Keystone Bank would always support CBN in ensuring the growth and development of the economy

In a related issue, the Apex Bank says small-scale importers of items not valid for foreign exchange via the official window, now qualify for forex.

“Importers of items classified as not valid for forex with transactions value of $20,000 and below per quarter shall now qualify for allocation of foreign exchange,” the bank said in a circular

Consequently, businesses with transaction value above $20,000 per quarter, remain barred from receiving foreign exchange from the official interbank window.

In June 2015, less than a month after President MuhammaduBuhari took office, the CBN placed capital controls on the country’s flow of foreign exchange in a bid to conserve scarceforex.

The CBN listed 41 items as ineligible for foreign exchange via the official window to include; toothpick, tomato paste, rice, cement, margarine, private jets.

Emefiele,  had argued that aim of the restriction was to drive local production of goods and services within the Nigerian system.