…CBN lifts FX market, as FG raises $2.86bn in Eurobonds
….As MPC meeting holds this week
Data obtained from the Central Bank of Nigeria’s (CBN) money and credit statistics, showed that banking sector credit to private increased to N22.72 trillion at the end of October 2018, compared with N22.56 trillion it stood at the end of September 2018.
With this development, banking sector credit to private gained 3.32 per cent to N22.72 trillion as at October, from N21.99 trillion in January 2018.
Our further checks showed that credit to the private sector has continued to gain this year, reaching its peak at N22.72 trillion as at September, the second time since September 2016 when it recorded N22.7 trillion.
Consequently, stakeholders in the electronic payment service sector have expressed worries over the ever-growing Cyber Attack in the e-space.
According to the Head, Products Strategy and Innovation, Interswitch Limited, Mr. Inalegwu Alogwu, “the risks involved have really made banks more careful in opening up its API to Financial Technology (FinTech) organsation.
“Technology is growing at a faster space and in order to boost financial inclusion, digitalisation must be embraced.
“If banks are to open its API and customers information to third parties (FinTech Companies), then the risks involved must be shared.
“This is because once a financial technology is compromised, the whole financial market is also compromised.
“Telcos, banks and FinTech must come together because vulnerability presents a problem to everybody”, Alogwu noted.
Speaking recently at the 9th annual Payment Systems and Fraud conference organised by E-Payment Providers Association of Nigeria (EPPAN), the CBN Governor, Mr. Godwin Emefiele, had said that the fraudsters have employed the use of social engineering and other new methods to extort bank account details from victims and that continuous collaboration among stakeholders would help curtail such tactics.
“CBN will always provide the backing for the industry to push together as one entity right in this.
We are also doing inter-agency collaboration with Nigeria Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC), the Judges, Nigerian Communications Commission (NCC), Nigeria Deposit Insurance Corporation (NDIC), all of us coming together to see how we can deal with this issue of fraud”, he stated.
Meanwhile, the apex bank in its last sale before the final Monetary Policy Committee (MPC) meeting for 2018, which was earlier scheduled for Monday and Tuesday, 19th and 20th of November, before been postponed to Wednesday and Thursday, 21st and 22nd of same month, injected the sum of $318.03 million in the retail Secondary Market Intervention Sales (SMIS) of the inter-bank foreign market, all in a bid to strengthen the naira.
The CBN also on Friday offered CNY62.18 million in the spot and short-tenored forwards segment.
Director, Corporate Communications of the apex bank, Isaac Okorafor, while confirming the sales, reiterated that the retail SMIS were for requests in machineries, agricultural and raw materials sub-sectors, while the Chinese Yuan was for Renminbi denominated Letters of Credit.
Okorafor assured that the CBN would continue to intervene in the foreign exchange market to guarantee exchange rate stability.
The Daily Times recalls that the CBN had on Tuesday, November 13, 2018, intervened in the inter-bank foreign exchange market to the tune of $210 million.
Meanwhile, $1 exchanged for N361 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY1 exchanged for N54.
Also, during the week under review, the Federal Government said it raised $2.86 billion in Eurobonds on Wednesday across three maturities in a sale that was three times oversubscribed.
It sold the bonds with maturities of seven, 12 and 30 years at 7.625 per cent, 8.75 per cent and 9.25 per cent, respectively.
The Federal Government officials have been meeting investors at a roadshow organised by Citi and Standard Chartered in London prior to issuing the Eurobond.
The government said demand for the dollar-denominated bond stood at $9.5 billion. The bond would help Nigeria fund its budget deficit for 2018 and other financing needs.
Nigeria’s upper house of parliament last month approved the Eurobond issue but advised the government to limit foreign borrowing and boost revenue.
Last year, Nigeria sold $3 billion in Eurobonds, part of which it used to fund its 2017 budget. It then followed with a $2.5 billion Eurobond sale in February to refinance local currency bonds at lower cost.
Lawmakers said the new bond issue will raise foreign borrowing to 32 per cent of Nigeria’s total debt, up from 30 percent at June 2018.
Nigeria, which emerged from recession last year, approved a three-year plan in 2016 to borrow more from abroad. It wants 40 per cent of its loans to come from offshore sources to lower borrowing costs and help to fund record-high budgets. (Daily Times)
