Business
Restriction ’ll Check Arbitrary Activities In Forex -Experts
Some financial experts have said that the new directive to stop sales of dollars by Central Bank of Nigeria (CBN) to bureau de change operators would check illegal activities in the market.
They told newsmen in Lagos that the decision might be due to some suggestions by IMF Managing Director, Ms Christine Largarde, during her visit to Nigeria.
The country’s external reserves dropped to 28.19 billion dollars on Jan. 8 from 29.07 billion dollars on Dec. 31, 2015, a reduction of 88 million dollars in the first week of 2016.
Largarde, during a four-day visit to the country, had directed the CBN to be flexible in its foreign exchange operations.
Mr Sewa Wusu, Head, Research and Investment Advisory at Sterling Capital, said the CBN decision was part of the measures to reduce the pressure on the nation’s foreign reserves.
Wusu said although the new decision was a big task, the overall health of the economy was important.
He said that the country could not afford to remain in the current situation.
On the directive on deposit of dollar into domiciliary accounts, the economist said the development would increase the level of dollar deposits in banks.
He said that the directive would also put an end to round-tripping and rent seeking as dollar demand from the system would reduce.
Wusu said the liberalisation of the interbank market was necessary to stabilise the foreign exchange market.
“The CBN has to rationalise the foreign exchange to ensure that the reserves do not continue to deplete further due to decline in revenue earnings from crude oil.
“Although, there might be slight pressure on the parallel market, but this will reduce later as the market stabilises.
“We are moving towards a regime of flexibility where the demand and supply would determine the value of the naira,” he said.
Mr Samuel Nzekwe, a former President of Association of National Accountants of Nigeria (ANAN), said the decision was long over-due.
Nzekwe said that Bureau de Change operators (BDCs) all over the world were not sourcing their foreign exchange from their central banks.
He said that BDCs in many countries were only allowed to attend to foreign exchange demands of light travelers which they got from visitors into the country.
Nzekwe said some Nigerians were jailed in the past for patronising BDCs before their activities were legalised.
Mr Kunle Ezun , a currency analyst at EcoBank Nigeria, said the actions of the CBN were aimed at reducing the pressure on the naira at the foreign exchange market.
“The naira has depreciated steadily at the parallel market in the last two months.
“It weakened to a new low level of N282 to the dollar on Jan. 11 due to the new directive of the CBN on foreign exchange sales to the BDC.
“By removing the restriction on foreign currency and cash deposits, the CBN has provided a platform for Deposit Money Banks (DMBs) to re-engage forex customers.
“The aim of mopping up foreign currency cash outside the banking system is for effective monetary policy operations”.
Ezun, however, said the foreign exchange inflow remained a big issue that the CBN needed to address in order to consolidate its efforts on foreign exchange management.
“The BDC market represents a small component of the forex market, but has high distribution network that cannot be wished away by the regulator.
“Instead of an outright stoppage of forex sale, perhaps the CBN could have identified the erring BDCs for appropriate sanctions, while others are monitored real-time for compliance with the extant law’’.
The analyst, however, added that the lack of any comment on telegraphic transfers, foreign cash notes and the two way quote market could further limit the positive impact of the new policies.
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Blue Economy: Minister Seeks Lifeline In Blue Bond Amid Budget Squeeze

Ministry of Marine and Blue Economy is seeking new funding to implement its ambitious 10-year policy, with officials acknowledging that public funding is insufficient for the scale of transformation envisioned.
Adegboyega Oyetola, said finance is the “lever that will attract long-term and progressive capital critical” and determine whether the ministry’s goals take off.
“Resources we currently receive from the national budget are grossly inadequate compared to the enormous responsibility before the ministry and sector,” he warned.
He described public funding not as charity but as “seed capital” that would unlock private investment adding that without it, Nigeria risks falling behind its neighbours while billions of naira continue to leak abroad through freight payments on foreign vessels.
He said “We have N24.6 trillion in pension assets, with 5 percent set aside for sustainability, including blue and green bonds,” he told stakeholders. “Each time green bonds have been issued, they have been oversubscribed. The money is there. The question is, how do you then get this money?”
The NGX reckons that once incorporated into the national budget, the Debt Management Office could issue the bonds, attracting both domestic pension funds and international investors.
Yet even as officials push for creative financing, Oloruntola stressed that the first step remains legislative.
“Even the most innovative financial tools and private investments require a solid public funding base to thrive.
It would be noted that with government funding inadequate, the ministry and capital market operators see bonds as alternative financing.
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