Nigeria’s lowest FX reserves in OPEC show CBN’s naira challenge

Nigeria has one of the lowest foreign-exchange reserves, among the 12-member Organisation of Petroleum Exporting Countries (OPEC), highlighting the challenge before the Central Bank (CBN), as it struggles to defend the naira amid falling oil prices.

FX reserves in Africa’s largest economy are low both in absolute terms and as a percentage of Gross Domestic Product (GDP).

Nigeria’s $36.5 billion in gross FX reserves is only equivalent to 7 percent of its 2013 economic output of $520 billion.

This compares with

CBN to review guidelines for accessing N220bn MSME Development Fund

The Central Bank of Nigeria (CBN) says it will soon review the guidelines for accessing the N220 billion Micro, Small and Medium Enterprises (MSME) Development Fund to ensure easy access.

The Acting Director, Development Finance Department of CBN, Mr Mudashir Olaitan, said this at a workshop organised by the Nigeria Deposit Insurance Corporation (NDIC) for business editors and finance correspondents in Kastina.

The theme of the workshop is: “Recent Development in the Nigeria Banking System”.

Olaitan, who spoke on “Framework for the N220 billion MSMEs Development Fund”, said that five commercial banks had already signed Memorandum of Understanding with the CBN on the way forward.

According to him,

Banks squeezed further as N40bn may vanish from industry wide profits

The Central Bank of Nigeria’s (CBNs) moves to tackle excess liquidity in the banking system via a further hike in reserve requirements may lead to an industry wide reduction in profitability by as much as N40 bn.

The MPC tightened policy via a 1ppt increase in the policy rate to 13 percent. The MPC also increased the CRR on private sector deposits to 20 percent, from 15 percent and devalued the official naira exchange rate, by moving the mid-point from N155/$1 to N168/$1, which is equivalent to 8 percent devaluation.

The committee also widened the band around the midpoint to 5 percent, from 3 percent, implying a new target (official) exchange rate band ofN160-176/$1.

“The moves imply a

Stop placing unrealistic targets on marketers, CBN tells banks

The Central Bank of Nigeria, CBN has warned commercial banks operating in the country against placing unrealistic deposit targets on their marketers.

Mr Godwin Emefiele answering questions  during his screening by the Senate for  Central Bank Governorship in Abuja on Wednesday

The apex bank gave the warning during the 2014 Bank Directors Association of Nigeria stakeholders’ forum held in Lagos.

The warning is as a result of the current practice by some financial institutions in the country whereby prospective employees are forced to meet unrealistic deposit target as a pre-requisite for employment or promotion.

The practice, according to the CBN Governor, Mr. Godwin Emefiele who was

Fitch: Nigerian banks performing well despite hurdles

Fitch Ratings says in a new special report that Nigerian banks are performing well despite the twin hurdles of tight monetary policy actions and new banking rules.”This is mostly supported by continuing robust economic growth. Nevertheless, we expect bank performance and growth to moderate over the next 18 months due to Central Bank of Nigeria actions aimed at protecting the economy and the banking system,” says Mahin Dissanayake, Director in Fitch’s EMEA Financial Institutions team.

The CBN’s stance also shifted towards protecting the consumer through its revised rules on banking charges introduced in 2013. All these moves, however, led to weaker profitability and stemmed credit growth in H114 – a trend that is likely to continue into 2015.

All Fitch-rated Nigerian banks were profitable in

CBN Reviews Guidelines on International Money Transfer

The Central Bank of Nigeria (CBN) has reviewed the guidelines on international monetary transfer services.

The review, according to the bank, was carried out in order to accommodate inbound as well as the outbound money transfer services that was introduced recently.

The 19-page document titled: ‘Guidelines on International Money Transfer Services in Nigeria, obtained on the CBN’s website yesterday, stated that all inbound money transfer to Nigeria would be disbursed to beneficiaries who operate a bank account, mobile money wallets with the agent or through ATM.

Also, the central bank noted that the maximum allowable cash withdrawals for inbound money transfer shall not be more than $500, adding that any amount in excess of $500 would be paid through an account.

However, where the beneficiary does not have a

Global liquidity to drive naira value as CBN confronts new era

The level of global liquidity will increasingly determine the naira – dollar exchange rates as the Central Bank of Nigeria (CBN), confronts a new era of a domestic economy that is more closely integrated and co-related with the global economy.

Analysts say the naira value will be influenced mostly by events outside the control of the CBN. These are the level of global liquidity as U.S economic stimulus or quantitative easing (QE) begins to get rolled back, which in turn will affect the price of oil.

“The outlook for the naira is hinged on the relative availability of liquidity in the global economy,” said Ayo Teriba, CEO of Economic Associates, a risk analysis and research firm.

The naira traded at N163.93 against the

CBN expects banks’ full compliance with NSBP reporting January 2015

The Central Bank of Nigeria (CBN) has said it expects full compliance with the provisions of the Nigeria Sustainable Banking Principles (NSBP) reporting template by all concerned institutions by January 2015, saying it is necessary for a level playing field.

In line with global trends on sustainability, the CBN on March 6, 2014 issued the NSBPs reporting template to banks, discount houses and development finance institutions for compliance.

The purpose of the reporting template is to provide reporting institutions with a uniform format for reporting their implementation efforts.

Franklin Ahonkai, deputy director, sustainability department, CBN, who spoke on ‘Regulatory Reporting and Expectations’, at the NSBP pre-reporting workshop organised by Access Bank in Lagos, noted that by the circular sent out by the apex bank reporting institutions were informed that sustainability reporting will commence in June 2014 with the submission of the one-off report (first quarter) not later than July 7, 2014.

The circular, he said, also required that