The Central Bank of Nigeria has fined
Standard Chartered Bank N2billion for foreign exchange infraction, an
authoritative source told Thisday wednesday.
The bank, according to the source, drew
the apex bank’s anger for buying $25million at the official rate and
selling same way above the inter-bank market rate.
Apart from the hefty fine, the
commercial bank’s treasurer is also said to have been suspended by the
apex bank that has been battling to rein in unwholesome banking industry
practises that have engendered a huge differential between the
inter-bank and parallel market rates.
As part of its efforts to bridge the
wide gap between the interbank and the Bureau De Change (BDC) segments
of the foreign exchange (FX) market, the apex bank, the State Security
Service (SSS), the Nigeria Police Force (NPF) and the Bureau De Change
Operators (BDCs) also met yesterday over the need for the BDCs to adhere
to the rules governing foreign exchange transactions.
A reliable source, who attended the
closed-door meeting, said the federal government was concerned about the
disparity in the FX rate among the three markets.
According to the source, the CBN and the
security agencies present at the meeting made the BDC operators to
understand that a lot of foreign investors are not comfortable with the
wide gap between the three arms of the FX market and would only come in
if the situation is addressed.
Therefore, it is anticipated that the initiative would encourage the inflow of FX from foreign portfolio investors.
The President, Association of Bureau De
Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, who confirmed
the development in a phone interview yesterday, said his members had
pledged to cooperate with the government.
He explained: “We were told to follow
the rules and make sure we cooperate with them. We have agreed to carry
our members along on that, in ensuring that compliance is strictly
observed. We have been sensitising our members and we have been holding
meetings.
“We want to have same regulation that is
happening within the banking industry for BDCs. If you go to any bank,
you see the FX rates written boldly. So, we have promised the government
that we would adhere to the rules. So, we are looking at a rate between
N390/$ and N400/$. That is, we buy at N390/$ and sell at N400 to retail
customers.”
He said the initiative was to make the parallel market unattractive.
“We already have a Rate Regulation
Committee and we have an Enforcement and Surveillance Committee as well
as a Sensitisation Committee. So, our business is now under strict
surveillance by the security agencies and we have to protect it,” the
ABCON president added.
THISDAY, however, learnt last night that
some BDC operators who were caught selling FX above the stipulated
limit were arrested by security agencies, both in Lagos and Abuja. Those
arrested would be prosecuted in order to discourage others from
flouting the FX regulations as well as the federal government’s
objective.
A top executive of ABCON, who said he
was not aware of the arrest, declined to comment on the exact number of
BDC operators arrested.
Meanwhile, the naira reacted positively
to the development on the parallel market as it appreciated to N460 to
the dollar yesterday, stronger than the N465 to the dollar it closed the
previous say. On the interbank FX market, the spot rate of the naira
closed at N307.76 to the dollar yesterday, just as it went for N385 to
the dollar on the BDC segment.
In a related development, the stock
market reacted negatively to the news of Donald Trump’s election as US
president. Specifically, the Nigerian Stock Exchange (NSE) All-Share
Index (ASI) fell by 0.72 per cent to 26,173.69, while market
capitalisation shed N65.6 billion to close at N9.0 trillion.
Although the market has been bearish in
the past six trading days, operators said the surprising victory of
Trump must have further dampened investors’ confidence.
“We acknowledge the possibility that the
surprise victory of Trump in the US presidential election could
potentially further dampen sentiments, as investors weigh the potential
impact on the country given the close trade relationship between Nigeria
and the US,” analysts at Meristem Securities Limited said.
The global markets were calm as the
S&P 500, Dow Jones, and Nasdaq stock indexes in the US were little
changed after the first hour of trading.
The pre-open future markets forecast dramatic sell-offs when Trump’s lead became clear overnight.
Share traders had expected Hillary Clinton to beat Mr. Trump to become the next US president on the back of polling forecasts.
UK and European stock markets have made
early losses, with money flowing into safe haven stocks, gold and
currencies including the yen.
The UK’s FTSE 100 index initially
dropped two per cent before recovering its losses to show a gain of 0.8
per cent in afternoon trading.
France’s Cac index and Germany’s Dax were back in positive territory after erasing losses of more than two per cent.
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