The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says the foreign exchange (FX) market received a boost of over $1 billion in liquidity within a “few days”.
Cardoso spoke on Friday during a presentation to lawmakers at the senate in Abuja.
The CBN governor said reforms initiated by the apex bank are yielding positive results in the FX market.
“We have already begun to see shifts in a positive direction,” Cardoso said.
“Indeed, we have already begun to see positive results with significant interest from foreign portfolio investors which was a concern that has already begun to supply the much-needed foreign exchange to the economy.
“For example, the upward trend of the last few days. We have had over $1 billion that have come into the market. And this, quite frankly, is the answer to the question.”
Cardoso further said the apex bank does not have the magic wand to stabilise the foreign exchange, saying “Nigerians have to reduce frequent demand for dollars for business and personal needs”.
He assured the senate that the reforms have generated significant interest from foreign portfolio investors.
The CBN had introduced policies targeted at boosting liquidity in the FX market.
On January 31, 2024, the financial regulator released new measures for financial institutions to manage foreign exchange (FX) risks, directing banks to sell dollars to prevent losses.
CBN also removed the allowable limit of exchange rate quoted by the international money transfer operators (IMTOs), stating that FX rates used should be from the official FX market.
The apex bank also pledged to ensure that the FX market is stabilised.
Suspicious inflows: $26bn from unknown sources passed through Binance Nigeria in one year, says Cardoso
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said that $26 billion passed through Binance Nigeria from unidentified sources in one year.
Cardoso disclosed this to journalists on Tuesday after the committee’s meeting at the CBN headquarters in Abuja.
In June 2023, the Securities and Exchange Commission (SEC) had said the operation of Binance Nigeria Limited, a subsidiary of Binance, was illegal.
Cardoso’s comments come amid recent media reports of a clampdown on crypto exchanges — including Binance — by the Federal Government.
Bayo Onanuga, the special adviser to President Bola Tinubu on information and strategy, had posted some of the reports on X on February 24, 2024 — an act that could be seen as a confirmation of the development.
Prior to this, Onanuga had called for a ban on Binance and other crypto platforms operating in Nigeria to curb foreign exchange (FX) rate distortions.
Speaking on the matter, Cardoso said the apex bank is collaborating with the SEC to ensure there is no manipulation in the FX market.
“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities, suspicious flows at best,” the CBN governor said.
“In the case of Binance, in the last one year alone, $26bn has passed through Nigeria from sources/users who we cannot adequately identify.
“There’s a lot that is going on now as a result of collaboration between the different agencies which includes EFCC, the police, and of course, the office of the NSA.
“And in due course, as we progress and have more information to share, we will certainly share.
“But suffice to say that we are determined to do everything it takes to ensure that we take charge of our market or put it differently to not allow others to manipulate our markets in a way that ends us distortionary and sub-optimises for all Nigerians.”
He added that the apex bank will ensure that this “type of infraction” does not take place.
On February 20, 2024, the CBN and the Office of the National Security Adviser (ONSA) announced a partnership to investigate and penalise those involved in illicit activities within the FX market
Sellers of FX above $10,000 must declare source to BDCs – CBN
As part of the strategies to save the economy, the Central Bank of Nigeria (CBN) says sellers of foreign exchange (FX) of $10,000 and above to Bureau De Change (BDC) operators must declare the source of the forex.
The apex bank made this known on Friday in a document titled ‘Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria’.
CBN also mandated the sellers to “comply with all AML/CFT/CPF regulations and foreign exchange laws and regulations”.
Also, the CBN said customers can move foreign currencies from their domiciliary accounts with Nigerian banks to BDCs.
“All digital/transfer purchases of foreign currencies shall be credited to the BDC’s Nigerian domiciliary account,” CBN said.
“Payments for all digital/transfer purchases of foreign currency by a BDC shall be by transfer to the customer’s Naira account. If the customer is non-resident (whether Nigerian or not), a BDC may issue the customer a prepaid NGN card.”
The financial regulator said BDCs can source foreign currencies from tourists, returnees from the diaspora, and expatriates with foreign exchange inflows from work, travel, investment or their domiciliary accounts.
Other allowable sources mentioned by CBN are residents with foreign exchange inflows from work, travel, investment or their domiciliary accounts, and International Money Transfer Operators (IMTOs).
CBN also listed embassies, hotels that are authorised buyers of foreign currencies, the Nigerian foreign exchange market (NFEM), as well as any other source that the apex bank may specify.
FG stops gas exports to crash price, end scarcity
As part of the general efforts to end the scarcity of gas in the country, the Federal Government has announced the suspension of liquefied petroleum gas (LPG) exports.
Ekperikpe Ekpo, minister of state for petroleum resources (gas) made this known on Thursday during an “Internal Stakeholders’ Workshop” in Abuja.
He said the action is part of a deliberate attempt to increase the availability of LPG in the domestic market and lessen the financial strain on customers due to the hike in the price of the commodity.
“We are interacting with critical stakeholders to ensure that there is no exportation of LPG. All LPG produced within the country will have to be domesticated. When this is done, the volume will increase and of course, the price will automatically crash,” he said.
“I am in contact with the regulation, NMDPRA, we hold meetings almost on a daily basis, and the producers such as Mobil, Chevron, and Shell. So, there is that hope that things will turn around. We don’t need to make noise about it.”
The minister underlined the need for banning the export of domestically manufactured LPG, saying the entire production will be utilised within the country.
He said the expected increase in the volume available for the domestic market and price reductions would bring relief to customers struggling with the high cost of cooking gas.
The development comes amid a rise in the price of the product.
According to the National Bureau of Statistics (NBS), the average retail price for refilling a 12.5kg cylinder of LPG increased by 0.28 percent on a month-on-month basis from N10,248.97 in December 2022 to N10,277.17 in January 2023.
The Transmission Company of Nigeria (TCN), on January 25, 2024, had attributed the gradual decrease in power supply to gas shortage.
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