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Naira In Bullish Appreciation: Now N390 Per Dollar

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  • CBN gets bids for $100m 

The Nigerian currency continued its bullish appreciation yesterday as it traded for N390,  against the US Dollars in Abuja.

It also also appreciated against the Euro, exchanging at N400 while remaining stable against the Pound Sterling at N465. The last time the naira traded at between N390 and N400 to the dollar at the parallel market was in August 2016.

With the gains made by the local currency in the last five weeks, the naira inched closer to one of the Central Bank of Nigeria’s (CBN) key foreign exchange policy objectives of an exchange rate convergence.

On Wednesday, when the dollar traded for N400, it marked the beginning of true convergence of official and black market foreign exchange rates.

At the Foreign Exchange (FX) interbank market, the naira traded for N375 to the dollar for invisibles and N307 to the dollar for manufacturers and importers of raw materials eligible to buy Forex from the segment of the market.

The significant gains made by the naira at the parallel market, according to market analysts, is a reflection of the improved confidence in the Forex market following the sustained dollar interventions by the CBN since February.

A Bureau de Change (BDC) operator, who preferred anonymity in Abuja, told NAN that the gains made by naira over the dollar were due to CBN’s continued flooding of the market with dollars while there were very few or no customers to patronise them.

He said several retail customers who used to resort to the BDCs, which indirectly funded the parallel market, to fund invisible transactions now bought dollars at a lower rate from the banks.

In all, the Central Bank has auctioned a total of 1.9 billion dollars through forward sales as well as targeted intervention for invisibles.

This amount does not include its daily intervention of 1.5 million dollars on the interbank market.

The CBN Governor, Mr Godwin Emefiele, on Tuesday expressed optimism about the convergence of the Forex rates at the official and parallel markets, stating that the gains made by the naira against the greenback in the last five weeks were not a fluke.

Emefiele said he was happy that the central bank’s intervention was yielding positive results.

“I am happy, indeed very gratified, that the interventions have been positive; we have seen the rates now converging and we are strongly optimistic that the rates will converge further.

“In terms of sustainability, I think it is important for us to say that the foreign reserves at this time are still trending upwards to almost 31 billion dollars as I speak with you.

“The fact that we have done this consistently for close to five weeks should tell everybody, or those who doubt, the strength of the central bank to sustain this policy.”

In the meantime, the Central Bank of Nigeria (CBN) has received bids for $100 million from  dealers in the interbank market to meet customers’ requests. The sale will be settled today.

CBN spokesman Isaac Okorafor said  no intervention was made by the bank to meet requests for invisibles.

Okorafor reiterated that the CBN will continue to intervene in the interbank market to meet all legitimate transaction-based foreign exchange demands by customers.

The CBN had in its last auction sale offered $150 million to the interbank market with the highest bid rate at N335 to dollar while the marginal rate was N320 to dollar.

Foreign exchange speculators are expected to lose over N100 million in the coming days as CBN intervention in the interbank market continues.

Already there are heightened fears among traders and other market participants who are yet to recover from the losses of the last two weeks owing to sharp and sudden appreciation of the naira.

Okorafor confirmed this development, reiterated that with improving reserve levels, the bank was determined to continuously make forex available to all genuine customers through their banks, advising those hoarding the greenback to reduce their losses by selling their dollar stock.

Market watchers, say there is the likelihood of a liquidity glut as banks are beginning to send out salespeople to scout for customers to buy off their dollars in an effort to avoid losses arising from the expected further appreciation of the naira.

The CBN has in the last one week supplied more than $1.4 billion to the market made to settle Personal Travel Allowances, Business Travel Allowance, medical fees and school fees among others.

Additional report from Nation

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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