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CBN Directs Banks to Sell Excess Dollars
The Central Bank of Nigeria (CBN) has issued a directive mandating Deposit Money Banks (DMBs) to divest themselves of excess dollar holdings by the latest deadline of February 1, 2024.
The CBN, in a circular released on Wednesday titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” expressed concern over the growing trend of banks amassing large foreign currency positions for profit. The move follows closely on the heels of a prior circular, issued just 48 hours earlier, cautioning banks and foreign exchange (FX) dealers against disseminating false exchange rates.
The circular, dated January 31, 2024, and signed by Dr. Hassan Mahmud, the Director of Trade and Exchange at the CBN, along with Mrs. Rita Sike, the representative of the Director of Banking Supervision, accused banks of holding excessive foreign exchange positions.
The apex bank set a deadline of February 1, 2024 (today) for banks to liquidate their surplus dollar reserves.
Highlighting the risks associated with banks maintaining large Net Open Positions (NOP), the circular emphasised the incentive for banks to hold excessive long foreign currency positions, exposing them to potential foreign exchange risks.
To address this, the CBN introduced prudential requirements, focusing on managing the NOP.
Under the new regulations, the NOP must not exceed 20% short or 0% long of the bank’s shareholders’ funds. The calculation is to be performed using the Gross Aggregate Method, offering a comprehensive overview of the bank’s foreign currency exposure. Banks exceeding these limits in their current NOPs are instructed to adjust their positions to comply with the regulations by February 1, 2024.
Moreover, the circular mandates that banks use specific templates provided by the CBN to calculate their daily and monthly NOP, along with their Foreign Currency Trading Position (FCT).
The CBN’s latest measures aim to curb the growing trend of banks holding excessive foreign currency reserves and contribute to the overall stability of Nigeria’s exchange rate.
China has announced a sharp increase in tariffs on US imports, raising the rate from 34 percent to 84 percent, in response to new American trade measures that came into effect on Wednesday.
The decision, confirmed by China’s finance ministry, will take effect from 12:01 p.m. on Thursday. It follows the imposition of sweeping new US tariffs under President Donald Trump, including a hefty 104 percent duty on certain Chinese goods.
“The tariff escalation against China by the United States simply piles mistakes on top of mistakes and severely infringes on China’s legitimate rights and interests,” the ministry said in a strongly worded statement, warning of “firm and forceful” countermeasures.
Beijing has long opposed the increasing use of tariffs as a tool in trade disputes, and accused Washington of undermining the multilateral rules-based global trading system.
In a related move, China’s commerce ministry also announced it would blacklist six American artificial intelligence companies, including Shield AI Inc. and Sierra Nevada Corporation. The companies were accused of either supplying arms to Taiwan or collaborating with the island on military technology.
Chairman of the House of Representatives Committee on Federal Roads Maintenance Agency (FERMA), Engr. Aderemi Oseni has expressed deep sorrow over the passing of former Oyo State Governor, Dr. Omololu Olunloyo, describing his death as a monumental loss to the people of Oyo State and Nigeria at large.
In a condolence message made available to the press on Sunday, in Ibadan by his media aide, Idowu Ayodele, the lawmaker eulogised the late elder statesman as a distinguished scholar, consummate public administrator, and one of Nigeria’s most intellectually gifted leaders whose legacy would continue to inspire generations.
Dr. Olunloyo, who served as governor of Oyo State during the Second Republic, was reported dead at the age of 89. He was widely respected for his brilliance, administrative acumen, and unmatched depth in mathematics and public discourse.
Oseni noted that the late governor’s contributions to the development of Oyo State, particularly in the areas of education, governance, and intellectual engagement, are indelible footprints in the sands of time.
“We have lost a gem. Dr. Olunloyo was not just a leader, he was a father figure and a repository of wisdom. His demise is a personal loss to me and all lovers of progress and excellence in our society,” he stated.
While commiserating with the Olunloyo family, the people of Ibadan, and the entire Oyo State, he prayed for the peaceful repose of the departed soul and urged all to take solace in the rich and impactful life he lived.
Member representing Ibarapa East/Ido Federal Constituency in the House of Representatives and Chairman, House Committee on Federal Roads Maintenance Agency (FERMA), Engr. Aderemi Oseni has extended his heartfelt congratulations to Chief Sulaimon Ajeniyi Ajewole and other members of the Central Council of Ibadan Indigenes (CCII) executives on their re-election.
Chief Ajewole was returned as the President-General of the apex Ibadan socio-cultural association, alongside other members of the executive council, who were all given the mandate to continue piloting the affairs of the association for another two-year term.
In a congratulatory message issued through his media aide, Idowu Ayodele, Oseni described the re-election of the Ajewole-led team as a reflection of the trust and confidence reposed in their leadership by the Ibadan indigenes at home and in the diaspora.
He commended the CCII leadership for its unwavering commitment to the progress, unity, and cultural advancement of Ibadanland while expressing optimism that the renewed mandate would further propel the association to greater heights.
“The re-election of Chief Ajewole and his team is not only a testament to their sterling performance over the last term but also an affirmation of their capacity to continue serving the interest of Ibadan indigenes. I extend my warmest congratulations and best wishes for a more impactful tenure,” he said.
The lawmaker further assured the CCII of his continued support for any initiative geared towards the development of Ibadanland and the preservation of its rich heritage.
The CCII is renowned for its pivotal role in mobilising Ibadan sons and daughters towards the socio-economic development of the65 ancient city and beyond.
