Trading
by banks on behalf of their clients on the Nigerian Interbank Foreign Exchange
(NIFEX) has shown increased foreign exchange (forex) allocation to the
importation of raw materials and industrial machines by manufacturers.
A
review of the returns on forex utilisation and source of funds for the week
ended July 1, 2016, which was published by some commercial banks last week,
revealed an increase in the volume of forex allocations to the sector.
For
instance, Zenith Bank Plc’s returns on forex utilisation which put the volume
of its transactions at $115,066,665.95 showed that it transacted business with
a total of 434 customers.
Most
of them were corporate customers who bought the greenback from the bank for the
importation of industrial raw materials and spare parts, among others.
Also,
Diamond Bank Plc sold the $42,158,753 it purchased from the NIFEX to 184 of its
customers, mainly for the importation of pharmaceutical raw materials, raw
materials for construction, agricultural machinery, cement silos for stationary
block making, and importation of motorcycles in completely knocked down (CKD)
parts, among others.
Diamond
Bank’s returns on source of funds also showed that it purchased $42,210,497
from the market.
Similarly,
Union Bank Plc’s returns put the volume of forex transactions by the bank at
$142,118,110.69. The bank transacted business with 238 customers and details of
the transactions showed that forex was sold for raw material imports, personal
income remittances and payment of school fees, among others.\
Stanbic
IBTC Limited’s returns on forex utilisation also showed that it transacted
business with 315 customers who bought dollars to import raw materials and for
divestments, among others, just as the bank’s returns on source of funds put
the amount of dollars it purchased at $51,761,247.42.
Also,
FirstBank Nigeria Limited’s returns on forex utilisation showed that its
Secondary Market Intervention Sales (SMIS), which was from the Central Bank of
Nigeria’s (CBN) special intervention was $26,601,760.48. The bank sold dollars
to 139 customers, most of whom were importers of industrial raw materials as
well as for petroleum products importers.
While
First City Monument Bank Limited’s returns showed that it sold the greenback to
515 customers, its returns on sources of funds put the total amount the bank
purchased from the market at $24,140,048.]
Meanwhile,
in furtherance of its efforts to engender transparency and professionalism in
the forex market, the CBN at the weekend directed that all forex-related trades
by authorised dealers (banks) and corporate institutions in the forex market,
with effect from August 1, 2016, must be executed through the FMDQ-advised
forex trading auction and surveillance system.
The
central bank gave the directive in a one-page circular that was signed by its
Director, Financial Markets Department, Dr. Alvan E. Ikoku, a copy of which was
posted on its website.
“All
authorised dealers (banks) are expected to execute all forex-related trades
among themselves and with their clients (corporate institutions) through the
FMDQ-advised forex systems.
“The
deployment of the FMDQ-advised FX systems will only be to those corporate
clients that have been screened and pre-approved by the FMDQ in line with its
on-boarding eligibility criteria,” it explained.
The
central bank also instructed all authorised dealers and corporate institutions
in the forex market to ensure strict compliance.
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