- As Reps blow hot over Acting President’s comment
Dollar inflows into the economy through the newly introduced Investor and Exporter (I&E) Forex Window have hit $2.2 billion, the Bankers’ Committee said yesterday.
The I&E FX window was introduced by the Central Bank of Nigeria (CBN) on April 24 to enable portfolio investors sell dollars at rates of their choice, if they get buyers.
Briefing reporters at the end of the 333rd meeting of the committee in Lagos, CBN Director, Banking Supervision, Abdulahi Ahmad, said the inflows, registered in the I&E Window had helped to stabilise the foreign exchange market.
The inflows also created more possibilities and positive feedback that the economy would come out of recession in the third quarter, he added.
The CBN, Ahmad said, must defend the naira, and ensure that the exchange rate did not deteriorate. “We will continue to defend the local currency against the dollar and ensure that the naira does not deteriorate. The ongoing convergence of the exchange rate is an indication that the economy is picking up.”
Speaking at the meeting, Stanbic IBTC Bank Plc Deputy Managing Director Demola Sogunle said the committee acknowledged the CBN’s efforts in encouraging foreign portfolio investors who have contributed to shoring up the inflows into the I&E Window.
Liquidity, he said, was gradually returning to the forex market, adding that CBN’s share of the market is currently less than 30 per cent. “When the window was opened, the bid offer spread was between N40 and N50, but the bid-offer rate has reduced. The Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) and parallel market gap has also reduced, even as portfolio investors are returning,” he said.
The committee also discussed the need to cut interest rate, as requested by the Senate so as to grow the economy.
On CBN’s continuous intervention in the forex market, the committee said the regulator remained a major player in the economy. The CBN, the committee added, is a seller and buyer in the forex market. It said as dollar inflows into the economy continue to improve, CBN’s interventions in the market would likely drop.
The committee said although the CBN had spent over $5 billion to defend the naira and support manufacturing and other key sectors of the economy, the foreign reserves still remained robust.
Standard Chartered Bank Managing Director Bola Adesola said the Agric/SMEs equity fund contributed by the banks stood at N26 billion, adding that the lenders were developing framework on how SMEs could access the funds.
“The fund will help SMEs to build capacity, but we want to ensure that we have the right governance to the equity fund,” she said.
Fidelity Bank Plc Managing Director Nnamdi Okonkwo said the committee agreed to suspend all charges on microfinance bank customers that want to enroll on the Bank Verification Number network.
He said such services would now be carried out free of charge, adding that the plan was in line with the CBN’s financial inclusion agenda.
Also, in its latest move to further rein in inflation, the CBN has unveiled plans to mop up a total of N200.322 billion from the banking system through a special Open Market Operation (OMO) at the rate of 16 per cent per annum.
The CBN said its decision to mop up liquidity was in reaction to the maturity of N206 billion.
CBN spokesman Isaac Okorafor explained that the apex bank decided on the rate of 16 per cent per annum due to the falling rate of inflation, which he noted will continue to drop.
This followed Monday’s release of Treasury Bills Issue Programme for the third quarter of 2017 in which the apex bank disclosed that the maturity dates for the various tenors will be June 15, June 22, July 6, July 20, August 3, August 17 and August 31, 2017, respectively.
In the meantime, speaker Yakubu Dogara said the powers of the three arms of government were clearly spelt out in the constitution.
“From the very pedestrian interpretation of the functions of the three arms of government, one makes laws, the other executes the laws, the other interprets the law. So, a declaration as to which of the arms has the power and rights, in as much as it is related to the interpretation of the law, is the function of the judiciary and not of the executive.
“I don’t even want to believe that the acting president made that statement; I don’t want to believe that, sincerely speaking. Because when it comes to the issue of the budget, I think we better say this thing and make it very clear, so that our people will have a better understanding. When it comes to the budget, the power of the purse in a presidential system of government rests in the parliament.”
Accusing the Acting President of breaching his priviledge by his comments, Hon. Abubakar Lawal said the Constitution and the House Rules were clear on the procedure for passing the budget. “For someone to come out and say that we have no power, it’s a breach of our privilege,” he said.