17 February 2017

Nigeria: No Query From AGF On Forex Sale - CBN

The Central Bank of Nigeria, CBN, yesterday, said it has not received any query from the Attorney-General of the Federation, AGF, on sale of foreign exchange, contrary to media reports.

Meanwhile, the apex bank has directed banks to report all foreign exchange transactions in United States dollars, disclosing that it has disbursed $2.83 billion for utilization in the critical sectors of the economy in the last two months of December 2016 and January 2017.

Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, stated this in statements, yesterday.

Okoroafor said: "The attention of the Central Bank of Nigeria, CBN, has been drawn to a media report suggesting that the Office of the Attorney-General of the Federation and Minister of Justice has issued a query to the Central Bank of Nigeria,CBN, over issues relating to the sale of foreign exchange.

"While it is perfectly normal for any agency of government to seek clarifications on any matter from other agencies of government, we wish to state that neither the Governor of the CBN nor the Director, Legal Services Department has received any communication with regard to the issue.

"The CBN, as a responsible and responsive arm of government, will always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned.

"Accordingly, we wish to reiterate our position by making the following clarifications:

"The CBN does not deal directly with any bank customer on foreign exchange transactions. Such transactions are consummated strictly between the customers and their respective Deposit Money Banks (DMBs);

"The figures of forex sale published in national dailies or on CBN website, over which insinuations are being formed, were transactions consummated between the DMBs and their customers;

"Pursuant to our policy of transparency, we publish the reports of purchases and sales of forex between the DMBs and their customers, as submitted by the banks without editing. This practice of publishing the figures on our website has been on since October 2016;

"Following observations of different exchange rates after the last publication on our website (www.cbn.gov.ng), we called for explanations from the banks concerned.

"In response to our queries to them, apart from some observed formatting errors, the concerned banks reported that the returns were sent on the basis which the transactions were conducted.

"The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported.

"The aforementioned are third currency transactions and when properly translated, will be in line with the prevailing forex rate range in the interbank market.

"Consequently, to prevent any such occurrence in the future, the CBN has directed all Deposit Money Banks to render their returns in a uniform format converting all forex sales and purchases to NGN/USD. All third currency transactions are also to be converted to NGN/USD.

"Again, we urge all concerned stakeholders to always verify information on matters relating to the Bank before going public in order not to trigger volatility in the market."

$2.83 forex sale

Okoroafor further said the apex bank sold $2.83 billion for utilization in the critical sectors of the economy in the last two months of December 2016 and January 2017.

According to Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, manufacturing, raw material and agriculture topped the list of beneficiary sectors, in an exercise he said targeted employment generating and wealth creating sectors of the economy.

He explained that $609 million and $228 million were released for raw materials in the months December and January respectively while manufacturing also attracted $53 million and $71 million, respectively, during the period under review.

A further analysis of the disbursements, the acting director said, indicated that $1.839 billion and $0.989 billion, respectively, were extended to critical sectors like agriculture, petroleum products and airlines, among others in December 2016 and January 2017.

Commenting further on the development, Okorafor stressed the determination of the bank to continue to ease the foreign exchange pressure on critical sectors.

The CBN had in November 2016 supported the critical sectors with $1,070,175,392.04 equivalent of foreign exchange for agricultural machinery, industrial raw materials, spare-parts and education, as well as, personal travel allowances through the interbank foreign market.


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