Injects Fresh $196.2m Into Various Segments
True to its warning some weeks ago when it started renewed interventions in the Nigerian foreign exchange market, the Central Bank of Nigeria (CBN) on Tuesday wielded the big stick, suspending 14 banks accused of sabotaging its efforts to stabilize the Naira against major global currencies through various measures.
The affected banks were barred from participating in the weekly SME wholesale spot and forward intervention with effect from Tuesday, May 2, 2017, based on field reports showing that only eight banks had sold forex to the SMEs segment since the inception of the new window.
He assured that the action will be lifted immediately any of them show evidence of significant utilization of the fund allocated to them under the SME window; while as an incentive, those that had utilized their SME funds were allocated all of the $100m sold at the Tuesday’s wholesale auction.
While warning the banks against activities that could jeopardise its current efforts, the apex bank had in a statement urged customers to report banks seen to be frustrating efforts to access forex through the official window for their legitimate needs.
In its statement, the CBN said the suspension of all of the nation’s banks except eight, followed persistent complaints that some have deliberately frustrated efforts by many small and medium enterprises (SMEs) to access forex from the new window it created
Our correspondent learnt that the CBN frowned at the refusal of the banks to sell forex to enable the SMEs import eligible finished and semi-finished items as intended, despite the availability of forex from the CBN Wholesale intervention window.
The apex bank’s Acting Director, Corporate Communications, Isaac Okorafor, while reacting to the suspension, explained that the CBN management decided to bar banks that were yet to utilize any portion of the funds allocated by the CBN under the SME window, since the inception of the window last month, from participating in the weekly wholesale spot and forward interventions.
Those that escaped the CBN harmer included: Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank, warning that the apex bank “would not sit back and allow any form of instability in the interbank forex market through the actions of institutions or individuals.”
He therefore urged all stakeholders to play by the rules for the benefit of the entire country and its economy.
Meanwhile, the CBN continued its massive intervention in the foreign exchange segment of the financial market by injecting a total of $196.2m into the various segments of the Forex market on Tuesday, May 2, 2017.
According to Okorafor, the apex Bank offered the sum of the $100m to authorized dealers at Tuesday’s FOREX wholesale auction.
A breakdown of the other interventions indicate that the CBN made available the sum of $52m to the Small and Medium Enterprises (SMEs) segment, while invisibles such Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), Medicals and tuition received $44.2m.
Okorafor also announced interventions in the retail auction window, which he said would be computed when the Bank receives requests made by customers to the CBN through their respective banks.
He also disclosed that the Bank will continue its weekly sale of $20,000 to dealers in the Bureau de Change (BDC) segment this week.
The spokesman expressed confidence that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns.