CBN Releases $2.8bn To Manufacturers, Others In Two Months , Naira in Free Fall To N516 to a Dollar, Nigeria Stock Market Bounces Back, As Investors Gain N33.9bn. See details below:
CBN Releases $2.8bn To Manufacturers, Others In Two Months
The Central Bank of Nigeria on Thursday said it had disbursed the sum of $2.83bn worth of foreign exchange for the importation of various types of equipment in the real sector of the economy.
The amount was made available to the manufacturers to enable them source for raw materials and spare parts to boost production capacity.
The Acting Director, Corporate Communications Department, CBN, Mr Isaac Okoroafor, who confirmed the development said the amount was released in the last two months covering December 2016 and January 2017.
Okorafor explained that manufacturing, raw material, and agriculture among others got the highest amount, adding that this was done by the apex bank as part of its measures to create jobs, reduce the level of poverty and ensure inclusive growth in the economy.
Providing a breakdown of the forex allocation, he said $609m and $228m were released for raw materials in the months of December and January respectively, while manufacturing got $53m and $71m respectively during the same period.
Okorafor, said the apex bank would continue to play its role by easing the foreign exchange pressure on critical sectors of the economy.
He said, “The Central Bank of Nigeria has disbursed the sum of $2.83bn for utilisation in the critical sectors of the economy between December 2016 and January 2017.
“Manufacturing, raw material and agriculture among others topped these disbursements targeted at employment generating and wealth-creating sectors of the economy.”
Okorafor had last month explained that the CBN was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage were able to get letters of credit to import the required materials for their businesses.
He had stated that since the CBN introduced restrictions on the sourcing of forex for 41 items from the inter-bank market, the restriction had indeed yielded positive results.
He urged manufacturers to take advantage of the policy, which he noted was part of efforts by the CBN to ensure that Nigeria reclaims its status as a major producer through backward integration.
This, according to him, would assist in conserving billions of foreign exchange spent on import bills annually.
Naira in Free Fall To N516 to a Dollar
The naira appears to have entered a free fall mode with the local currency selling for 516 per United States dollar on the streets of Lagos on Thursday . The naira plummeted at the parallel market from 510 /dollar on Wednesday to 516/ dollar on Thursday .
Currency dealers on the streets of Lagos Island sold the greenback at 516 and bought same for 513. In Egbeda , a major black market centre in Lagos , the naira was sold for 516 and bought at 510. At the Murtala Muhammed International Airport, Lagos , the dollar was bought on the parallel market for 516 and sold at 513.
On Wednesday , the local currency had closed at 507 against the greenback as acute dollar shortage continued to weigh on the currency market.
The local currency traded at 507 /dollar on Monday and Tuesday on the black market .
Experts are divided over the outlook for the naira this year . However, some analysts have predicted that the local currency will take further beating against the dollar this year .
The Chief Executive Officer , Financial Derivatives Limited , Mr . Bismarck Rewane , said the local currency would hit 520/ dollar this year on the parallel market and touch 350/ dollar at the official market.
An economic expert, Mr . Henry Boyo , has predicted that the naira will hit 1000 / dollar on the parallel market this year if the Central Bank of Nigeria fails to review its monetary policy framework .
According to him , the current monetary policy framework adopted by the CBN is skewed against the naira .
Other experts including the CEO of Afrinvest, a local research and investment advisory firm, Mr . Ike Chioke, says the naira will depreciate further against the dollar this year unless the CBN reforms the currency market.
Meanwhile , analysts have predicted that the naira will face fresh pressure on the parallel market next week with dollar supply falling short of demand by persons seeking currency to pay school fees abroad as the CBN continues to ration forex for businesses .
Demand for dollars has soared even though the external reserves have reached $ 29 bn .
The naira continues to trade flat at the official interbank window at 305. 5 to the dollar .
Traders said demand pressure was mounting on the black market but dollar supply had not significantly improved , suggesting further depreciation of the local currency might be coming , Reuters reported .
Nigeria Stock Market Bounces Back, As Investors Gain N33.9bn
The persistent losing streak on the Nigerian Stock Exchange, NSE, was halted, yesterday, as investors gained N33.9 billion propelled by positive activity in Nigerian Breweries Plc, Dangote Cement Plc and Forte Oil Plc.
This came as the NSE launched Lagos Chapter of Nigerians in the Square Mile (NISM). NISM, established in 2008, is a membership organisation and think tank made up of outstanding individuals in the financial and professional services sectors in the City of London and has become a quietly and increasingly influential organisation advancing the interests of Nigeria and Nigerians in the world’s leading financial centre.
At the close of the day’s trading session, the market capitalisation of all listed equities rose to N8.697 trillion from N8.774 trillion on Tuesday, representing 0.4 per cent increase.
Similarly, the All Share Index, ASI, rose by 0.4 per cent from 25,460.45 points to 25,130.26 points. Performance across sectors was mixed as three indices recorded price gains while two declined.
The consumer goods sector rebounded from a six-day bearish run, adding 1.7 per cent as investors swooped on shares of Nigerian Breweries Plc which rose by 4.2 per cent and International Breweries Plc that appreciated by 4.7 per cent.
Similarly, the industrial goods sector witnessed 0.3 per cent increase on the back of gains in Dangote Cement Plc that recorded 0.6 per cent returns. On the flipside, the banking sector decreased by 1.1 per cent as a result of negative disposition to shares of Guaranty Trust Bank Plc, Zenith International Bank Plc and Access Bank Plc, which went down by 2.0 per cent, 0.9 per cent and 1.5 per cent respectively, while the insurance sector closed 0.5 per cent lower on the back of 4.5 per cent and 0.3 per cent losses in Continental Reinsurance Plc and Custodian and Allied Insurance Plc respectively.
Speaking at the launch of NISM yesterday, Oscar Onyema, CEO, NSE, said that the establishment of NISM in Lagos would provide a better link that works for Nigeria by connecting the best of two cities – London and Lagos.
He noted that the link would connect leaders in finance and commerce in Lagos with those in London, while creating a powerful alliance of the best thought leaders in both cities.
He assured that the Exchange is open to opportunities that would create durable wealth for all legitimate investors, adding that it is the reason the Exchange has championed the listing and trading of multiple products, including equities, Exchange Traded Funds, ETFs, bonds, Real Estate Investment Trusts,REITs, and have developed a strong market data business to provide timely information to investors through multiple channels.
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