· Foreign reserves fall below $27bn
By Obinna Chima
The Central Bank of Nigeria (CBN) sold a total of $136,038,458.17 to 13 commercial banks, three merchant banks and the Bank of Industry (BoI) between March 3 and 6, 2016.
This is just as the country’s foreign exchange reserves plummeted further to $26.919 billion last Thursday.
Returns on forex utilisation published by the financial institutions showed that FirstBank of Nigeria Limited, with $16,809,785 got the highest allocation from the central bank.
Forex returns published by the bank showed that it sold the greenback to 713 customers last week, just as it revealed that Dangote Cement Plc bought $5 million from the bank in the week under review, making the company the biggest customer that bought forex in the first week of March.
Coming in second place, Stanbic IBTC was allotted $14,754,332.91. Of this amount, $9,000,942 was purchased by foreign investors exiting the equities, bonds and money markets. Although Stanbic IBTC reported that it sold dollars to 121 customers, its biggest customer last week was also Dangote Cement Plc which bought $1,816,470 from the bank.
Standard Chartered Bank was allocated $14,350,737.12 to occupy the third place. The bank whose returns on forex utilisation showed that it sold dollars to 162 customers, also had Dangote Sugar Refinery as its biggest customer.
Similarly, Zenith Bank Plc was allocated $13,594,769.12 from the central bank to hold the fourth place. Its returns showed that it sold the greenback to 400 customers. Of this number, its biggest customers during the week were AG-Dangote Construction Limited and Dangote Group with a combined sum of $2,577,462.
Also, United Bank for Africa Plc (UBA) with $12,260,897.70 occupied the fifth position. UBA’s biggest customers last week included NFE Industry Limited ($1.454 million); IATA ($1.5 million); Matrix Energy Limited ($1 million); and Inview Technology Limited ($1 million).
Diamond Bank Plc got $10,841,837.83 from the central bank that was sold to 238 customers. Also, Guaranty Trust Bank Plc (GTBank) was allocated $9,071,610.87 to occupy the seventh place; Access Bank Plc got $8,986,677.12, while First City Monument Bank Plc (FCMB) got $7,225,908.47 that it sold to 300 customers.
Meanwhile, the country’s forex reserves published by the central bank showed a year-to-date decline of $2.039 billion to $26.919 billion from $28.958 billion on January 5, 2016.
Nigeria’s external reserves were expected to take a hit due to the settlement of large swap positions between the banks and the CBN.
Overall swap books of some Nigerian banks were put at $5 billion, with most of it to be paid back this year.
“The estimated swap position alone would take Nigeria’s foreign exchange reserves down from the present $29 billion to $24 billion. As at nine months 2015, some of the banks within our coverage reported gains from derivative instruments, which in our view are mostly swap contracts.
“With the income from the swap deals expected to phase out through 2016, we believe the loss of swap income in 2017 will also negatively impact banks’ performance,” CSL Stockbrokers Limited said in a report recently.