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Naira gains as CBN boosted foreign exchange market with $54m

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Financial Inclusion: CBN urges financial operators to diversify products
The Nigerian currency, Naira, on Tuesday rebounded against the United State currency to close at 367 compared to 369 traded on Monday at the parallel market, even as the Central Bank of Nigeria (CBN) boosted the foreign exchange market with a total injection of $545 million.
 
The Naira, also gained against the pound and euro, with the new closing rate of 436 and 485, respectively, against 437 and 485 that were seen at the parallel market. At the official foreign exchange market, the naira maintained the 305.90 per dollar traded on Monday but better than 305.95 sold on about a week ago.
 
 
However, the I&E FX window, otherwise known as NAFEX, extended gained recorded on Monday to opened Tuesday trading activities at
 
359.9 against Monday 359.66 per dollar, representing an appreciable rate of 0.07 per cent, and also closed positively with the new rate of 360.06 compared to 360.36 exchanged on Monday, indicating a total gain of 0.036 per cent. Although, the NAFEX, recorded a drop in the daily turnover of $125 million against $131.84 million closed on the first trading day of the week.
 
Meanwhile, the apex bank had earlier in the week threatened to sanction any Deposit Money Bank (DMB) which fails to comply with its directive to open teller points for retail forex transactions. It also sustained its intervention in the various sectors of the inter-bank Foreign Exchange market with the injection of $545 million.
 
The apex bank had on March 3, 2017 instructed DMBs to, among other things, open teller points for retail forex transactions and to have electronic display boards in all their branches, showing rates of all trading currencies.
 
A circular issued by the Bank warned that the CBN would mete out stiff regulatory sanctions to banks that fail to comply fully with the directive by October 13, 2017The circular signed by the Director, Banking Supervision, Ahmad Abdullahi, stressed that the Bank would bar erring DMBs from all future CBN foreign exchange interventions.
 
It will be recalled that the CBN in March 2017 had directed banks and authorised dealers to open a teller point for retail FX transactions (PTA/BTA and SME) including buying and selling, in all locations in order to ensure access to foreign exchange by their customers and other users, without any hindrance.
 
The March 2017 circular also directed DMBs to have electronic display boards in all their branches, showing rates of all trading currencies, which it urged customers to insist on in processing their foreign exchange transactions for invisibles and the SMEs window.
 
While noting that the objective was aimed at creating awareness among members of the public regarding the availability of such facilities in branches of the banks at clearly disclosed prices, the CBN frowned at the banks for not fully complying with its directives.
 
Accordingly, the CBN has given the erring banks a four-week period, expiring on October 13, 2017, to fully comply with its directives or face regulatory sanctions, which it noted include but not limited to being barred from all future CBN foreign exchange interventions.
 
Giving a breakdown of the Bank’s latest forex injection, its Acting Director, Corporate Communications, Isaac Okorafor, revealed that the retail Secondary Market Intervention Sales (SMIS) received the largest intervention of $285 million.
 
Other components of the released figures include the $100 million offered for wholesale SMIS, $90 million for Small and Medium Enterprises (SMEs) window and $70 million for invisibles such as Basic Travel Allowances, tuition fees and medical payments.
 
According to Okorafor, the amount released underscored the CBN’s avowed commitment to ensure a liquid interbank foreign exchange market, where all genuine requests will be met in line with extant forex guidelines.
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