by Blaise Udunze
Nigeria’s foreign exchange (FX) market remained pressured by uncertainty around the anticipated flexible exchange rate policy adopted by the Central Bank of Nigeria’s Monetary Policy Committee (MPC).
This was as dealers expected that the guidelines for the new flexible exchange rate regime would be communicated early enough to restore normalcy to the market.
Daily Sun findings revealed that the delay by the CBN on the specifics of the new FX policy further fuelled speculations within the BDC/parallel segment of the FX market as the Naira depreciated by 1.4per cent against the Dollar to close at N355.00/US$1.00 relative to previous week’s close of N350.00/US$1.00.
At the official/interbank segment however, the Naira remained stable for the week as the CBN again intervened at the official rate of N197.50/US$1.00. This makes the third consecutive auction the CBN conducted at the rate of N197.00/US$1.00 or N197.50/US$1.00 after the market had anticipated the apex bank would adjust its intervention rate (in order to save the external reserves) subsequent to NNPC’s announcement of a guided deregulation of the downstream petroleum sector that pegged the FX rate for petroleum importers at N285.00/US$1.00.
Meanwhile, an average of $700million was used in defending the currency as the movement in foreign exchange reserves for the month of May closed 2.6per cent to $26.4billion lower relative from the level $27.1billion in April.
An investment banker, Afrinvest stated that the pressure would persist at the parallel segment, pending the unveiling and clarity on the adoption of the flexible exchange rate policy.
Meanwhile, as at last Friday, the system liquidity improved by 51.4per cent to close the week at N408.3billion as open buy back (OBB) and overnight (O/N) rates closed 2.0per cent and 2.3per cent lower week-on-week to settle at 2.8per cent and 3.2per cent respectively.
However, in spite of the scarcity and restrictions in the nation’s foreign exchange market, findings showed that seven banks made N78 billion trading in foreign exchange in 2015. A recent report revealed that the income was 8.3 per cent lower than the N85.5 billion recorded in 2014. The banks are Access, UBA, FBN Holdings, Union Bank, Diamond Bank, Wema Bank and Sterling Bank.
Breakdown on the analysis of the audited financial statements of the banks showed that Access Bank and UBA accounted for 68 per cent of the total income with N53.8 billion, down from N67.2 billion recorded the previous year.
Access Bank led the pack with N36.9 billion, up by 103 per cent or N18.7 billion from N18.2 billion in 2014. UBA came second, with N16.9 billion down by N7.6 billion or 31 per cent from N24.5 billion in 2014.
FBN Holdings came third earning N11 billion in 2015, down by 20 per cent or N14.1 billion in 2014. Others are Diamond Bank, N6 billion, Sterling Bank, N5 billion, Union Bank ,N2.1 billion and Wema N0.2 billion. Analysis also revealed that of the five top banks, Zenith recorded a loss of N1.96 billion from foreign exchange trading, down by 113 per cent from N14.1 billion recorded in 2014. GTBank however did not disclose its foreign exchange trading for the year.