Connect with us

VenturesNow

Nigeria’s Central Bank clears another $400 million FX backlog

Published

on

The Central Bank of Nigeria (CNB) paid out an additional $400 million in legitimate foreign exchange backlog to individuals who were properly identified, according to CBN Governor Yemi Cardoso.

This was said by Cardoso at the communiqué’s presentation on Tuesday in Abuja during the Monetary Policy Committee meeting. In the meantime, the bank raised interest rates by 400 basis points, from 18.75% to 22.75%.

Cardoso states that the bank is dedicated to clearing the FX backlog for businesses that are owed money and will endeavour to regain the public’s trust.

Nigeria has matured foreign exchange forwards worth over $7 billion, which, despite the CBN’s assurances that the backlog will be cleared remains for worry for investors as the naira continues to decline owing to currency shortages. Approximately $2.5 billion of the backlog in sectors such as manufacturing, aviation, and petroleum has been fully paid.

He said, “In terms of the backlog, we are committed to clearing the backlog of identified and genuine requests that are pending.

“We are committed to doing that and I can tell you that just today, we paid out $0.4 billion to those that were identified, and we are committed to continuing doing so in one form or the other to those genuinely identified and proven cases.”

Under Cardoso’s direction, the CBN has implemented a number of measures meant to boost the bank’s reputation, stabilise the naira, and rein in inflation.

Among these measures are floating the naira, creating clear regulations for BDC, unifying the foreign exchange market, and ending intervention finance, which the governor claimed swallowed up about N10 trillion during the previous administration.

The goal of the CBN reforms was to settle the foreign exchange market, but since the start of 2024, there has been a great deal of volatility, with the naira at one point worth almost N1800 to the US dollar.

VenturesNow

IMF says South Africa needs to do more to cut spending, lower debt-to-GDP ratio

Published

on

A top official from the International Monetary Fund has revealed that South Africa needs to do more to cut spending and lower its debt-to-gross domestic product ratio. The multilateral body stressed that the ratio is expected to rise from 74% in 2022 to almost 86% by 2029.

Era Dabla-Norris, deputy head of Fiscal Affairs, said that the government could cut back on transfers to state-owned businesses, make cuts to subsidies that don’t help specific companies, and make big changes to the way the economy works to boost growth.

She told a news conference that South Africa’s energy and logistics problems had to be fixed right away.

A Statista study shows that between 2023 and 2028, the South African national debt was expected to keep going up by a total of 163.3 billion U.S. dollars, or 59.99%.

The national debt is expected to hit a new high point of 435.46 billion U.S. dollars in 2028, after going up for ten years in a row. Notably, the national debt has steadily risen over the past few years.

The IMF says that the general government’s gross debt is made up of all its debts that need to be paid back with interest and/or capital at some point in the future.

Continue Reading

VenturesNow

Nigeria’s central bank insists depleting external reserves not due to Naira defence

Published

on

According to the Central Bank of Nigeria (CBN), the big drop in the country’s foreign exchange reserves was not due to the defence of the Naira. Instead, it was done to partly pay off debts owed to creditors.

Furthermore, the bank said it wanted to stay out of the market as much as possible, hoping to create an environment where costs are set by willing buyers and sellers.

The CBN governor, Olayemi Cardoso, clarified on Wednesday while the International Monetary Fund and World Bank held their Spring Meetings in Washington, D.C., USA following curiosity around the big drop in the country’s foreign exchange reserves—about $2.16bn in just 29 days—even though the government was working hard to keep the naira stable, underlying important it is to let the market decide prices instead of depending too much on the bank to step in.

The CBN website showed that as of April 15, 2024, the foreign exchange stocks had dropped to $32.29bn, a big drop from March 18, 2024, when they were $34.45bn. Also, the funds grew by $1.28bn over 43 days, from February 5, 2024, to March 18, 2024.

The apex had earlier stated that the rise was due to more money being sent back to Nigeria by Nigerians living abroad and more interest from foreign buyers in local assets, such as government debt securities. The top bank also said that the rise was caused by changes in the foreign exchange market and more oil being produced, among other things.

Cardoso maintained that the bank would not get involved in the exchange unless unusual circumstances arose. He also made it clear that the recent small change in reserves had nothing to do with protecting the naira. He said that there will be an increase soon because the country is getting an extra $600 million into its funds.

He said, “I want to make this as clear as possible, it is not in our intention to defend the naira. and as much I have read in the recent few days, some opinions concerning what is happening with our reserves and if the central bank is defending the naira. If you think about what our overall policy and philosophy has been here, you can see it is counterintuitive.

“What we are encouraging is for the market to be a willing-buyer and willing-seller price discovery system, and ultimately I perceive a future where the central bank would not intervene except in very unusual circumstances. What is important to us is that there is sufficient liquidity in the market. We recorded trading of $1bn, sometimes it is $600m or $700m as the case may be and that will continue. So as long as we have a vibrant currency market, why do we need to intervene? There has been little amount given to the Bureau de Change to get that segment going and a small amount of money has gone into that to catalyse because individuals must have access to funds for school fees, health and the rest.”

Foreign currency shortages in the country have been a problem for a long time for the CBN. That governments, commercial banks, merchant banks, other financial institutions (OFIs), or public officials cannot directly or indirectly own Bureaux de Change (BDCs) was ruled in February.

Continue Reading

EDITOR’S PICK

Metro9 hours ago

‘Reconsider your anti-people policies, they are causing hardship, insecurity in Nigeria’— PDP tells Tinubu

Nigeria’s main opposition party, the Peoples Democratic Party (PDP), has called on President Bola Tinubu to consider what it calls...

Sports1 day ago

Top European, Asian clubs on alert as Super Eagles keeper set to make contract decision

Some top clubs in Europe and Asia have been put on alert as Super Eagles and Chippa United goalkeeper, Stanley...

VenturesNow1 day ago

IMF says South Africa needs to do more to cut spending, lower debt-to-GDP ratio

A top official from the International Monetary Fund has revealed that South Africa needs to do more to cut spending...

Politics1 day ago

Burkina Faso expels 3 French diplomats over ‘subversive activities’

According to a letter quoted by Reuters on Thursday, three French diplomats have been sent back to France by Burkina...

Tech1 day ago

Nigeria’s MAX partners Ghana’s Kofa in e-bike financing deal

Nigeria’s electric vehicle solutions provider, MAX, has announced striking a partnership deal with Ghana’s innovator in energy networks, Kofa, that...

Metro1 day ago

Zambia asks EU to help strengthen its democratic initiatives ahead of 2026 elections

The Zambian government has called on the European Union (EU) to help in strengthening democratic initiatives in the country as...

Metro1 day ago

Nigeria destined to become major global economy under Tinubu— VP Shettima

Nigeria’s Vice President, Kashim Shettima, has predicted that the country is destined to become a major economic force in the...

VenturesNow1 day ago

Nigeria’s central bank insists depleting external reserves not due to Naira defence

According to the Central Bank of Nigeria (CBN), the big drop in the country’s foreign exchange reserves was not due...

Tech2 days ago

African Guarantee Fund partners Nordic Development Fund to launch green finance in Nigeria

The African Guarantee Fund (AGF) has teamed up with the Nordic Development Fund (NDF) to launch a green finance fund...

Sports2 days ago

Ethiopia’s Lemma, Kenya’s Obiri give Africa double podium finish at Boston Marathon

Ethiopia’s long distance runner, Sisay Lemma, and Kenyan female marathon sensation, Hellen Obiri, teamed up to give Africa a double...

Trending