Buhari Meets Emefiele, Pleased With Stability in Forex Market

  • Insists ban on 41 items not lifted 
  • Stanbic IBTC, Keystone Bank readmitted into FX market 
  • Again, banks unable to subscribe fully to CBN’s offer

 Omololu Ogunmade in Abuja and Obinna Chima in Lagos

 Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, thursday revealed that President Muhammadu Buhari is satisfied with the stability in the foreign exchange (FX) market, following the sustained intervention by the central bank.

Emefiele made this disclosure at the Presidential Villa, Abuja, while fielding questions from journalists after a closed-door meeting with the president.

The CBN boss who said the visit was one of his routine visits to the president to brief him on the state of the economy, added that Buhari was excited to hear the news on improving economic stability in the country, supported by the exchange rate of the naira which has stabilised at between N380 and N385/$ on the parallel market.

Emefiele said the price of crude oil in the international market which has been hovering at between $50 and $56 per barrel, has also helped in improving revenue generation and by extension fortified the nation’s currency.

“Basically, as expected, what we normally do is from time to time, to brief the president on activities in the Central Bank of Nigeria particularly this time as it relates to the efforts that the central bank is making to stabilise the FX market.

“And we briefed him regarding the activities so far and he was very delighted to hear that the market is stabilising at the level that it is right now at between N380 and N385 on the parallel market.

“There is no secret about it, but the fact that this time we have seen increased production of crude and exports also. The fact that we have also seen crude prices oscillating at between $50 and $55 to $56 has helped our revenue position and has also provided some ammunition for the central bank to defend the currency.

“Given what we have right now, the fact is that our revenue is looking good, the state of the economy is improving and I believe that we are going to pull out of the problem (recession) in due course,” he said.

Emefiele also said the economy has further been strengthened by the continuous injection of FX into the market by the central bank.

“Our responsibility as the central bank is to do what we are doing at this time. Nigerians or importers who need FX to do business need to have access to it and given the fact that we are able to increase our FX revenue, the natural thing to do is to make it available to those who need it to import or to carry out eligible transactions,” he said.

He said stable crude oil production and the attendant increase in the volume of oil exports, would help support growth of the Nigerian economy.

He also said the development has given signals of an imminent exit from the recession.

Emefiele also thursday dismissed a news report that the CBN had lifted the ban on 41 items not eligible for accessing FX from the official market, following the release of a circular on Wednesday.

The CBN governor informed THISDAY that the circular did not mean that the ban on the 41 items had been lifted, stressing that the ban remained in place.

The central bank in the circular had stated that importers of items that had been previously classified as “Not Valid for Forex” with transactions value of $20,000 and below per quarter shall now qualify for allocation of FX going forward.

This it, however, explained shall be subject to the completion of Form Q by small-scale (SME) importers.

The circular addressed to all authorised dealers said: “Please note that 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 subject to the completion of Form Q. Note that this circular supersedes an earlier circular on the subject matter.”

Continuing, the CBN stated that further to the circular on the above subject matter, all authorised dealers are to note that the documentation which includes “a duly completed Form Q; application letter from the customer; applicant must be an account holder with the processing authorised dealer and must have operated the account for at least six months; foreign bank transfer details; and pro-forma invoice from offshore supplier/beneficiary, shall henceforth subsist for the allocation of foreign exchange to small and medium enterprises”.

CBN spokesman Isaac Okorafor, also in a statement thursday, said: “The  attention of the CBN has been drawn to media reports to the effect that the banking system regulator has reversed part of its policy on some import items ineligible for FX.

“We wish to state that these reports and their interpretations are wrong. The CBN has not reversed its policy on the 41 items ineligible for FX through the Nigerian FX market.

 He said the report was a misinterpretation of the circular, adding: “This provision does not refer to the 41 items that remain ineligible for FX sale in the Nigerian FX market.”

Meanwhile, Stanbic IBTC was thursday readmitted into the spot and wholesale forwards segment of the FX market by the CBN after the lender was able to provide evidence to the central bank that it had been selling FX to SMEs since the introduction of the special window for small businesses.

A senior CBN official informed THISDAY thursday that Stanbic IBTC has been readmitted to participate in the weekly wholesale spot and forwards interventions.

He said other banks were also in the process of providing verifiable proof of compliance and once they do so, they would be readmitted.

Also, Keystone Bank said thursday that it had been readmitted into the spot and wholesale forwards segment of market by the CBN.

The bank’s acting managing director, Mr. Hafiz Bakare said in a statement: “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 bank’s position with the CBN as we have always shown support for SMEs through our work with farmers, manufacturers, schools and other business owners.”

Bakare further stated that Keystone Bank will always support the CBN in ensuring the growth and development of the economy.

During trading yesterday, news filtering from the central bank showed that banks and other authorized dealers were again unable to fully subscribe to the $150 million offered by the CBN in the market.

According to sources, dealers could only $43.5 million, representing 29 per cent of the $150 million offered in the wholesale segment of the FX market.

Confirming this Okorafor reaffirmed the CBN’s position to sustain the intervention with a view to making FX available for all genuine transactions through the CBN window.

Okorafor also allayed fears over the dwindling subscription by authorised dealers noting that it was a sign of a dollar glut in the FX market and the determination of the CBN to sustain the intervention aimed at ensuring stability.

He also said operators in the Bureau de Change segment of the market were also on hand thursday to pick the $20,000 offered to service low-end FX users.