Foreign exchange reserves up by $538.22m in 7 days – CBN

  Data published on the Central Bank of Nigeria’s website, Tuesday, showed that the nation’s external reserves figure rose by $538.22 million in the first seven days of July. The external reserves rose to $38.018 billion as of Monday, July 7, 1.43 per cent improvement over the $37.48 billion at the end of June.
This is the highest level since May 2, when the reserves closed at $38.112 billion, before it began the gradual but steady decline. When Godwin Emefiele, assumed office as CBN Governor on June 3, he expressed determination to grow the nation’s external reserve pool. At the end of that month, data published by the apex bank showed that Nigeria’s reserves stood at $37.48 billion, representing a rise of about $521 million or 1.43 per cent, from the $36.959 billion reported at the end of May.


According to reports from Daily Independent, the June data was contrary to the situation in the previous month, when the reserves level fell by a significant $1.178 billion or 3.09 per cent, from $38.138 billion at the end of April. The June-to-date data is akin to the situation in April, when reserves grew by a slim $314.472 million or 0.83 per cent from $37.834 billion at the end of March. Addressing a press conference in Abuja, days after he resumed office, Emefiele promised to partner relevant stakeholders to aggressively shore up Nigeria’s reserves and improve policy buffers. This, he said, will further create space to implement monetary policy using available instruments.
A fortnight ago, he expressed grave concern over observed deficiencies in the operational effectiveness of the Bureau De Change (BDC) segment of the nation’s financial system, leading to depletion of the foreign reserves. To ensure that only genuine companies operate BDCs in Nigeria, it announced a modified ‘Bureaux De Change Guidelines’, raising minimum capital requirement to for the BDCs by 250 per cent from N10 to N35 million.
The CBN noted the unusually large number of BDCs with inadequate level of minimum paid-up capital, noting that the required minimum paid-up capital of BDCs had remained at “N10 million, (whereas) the capital requirements of all other CBN-regulated entities have been reviewed upwards over the years, the one for BDCs has remained the same”. In addition to the new minimum capital, the apex bank pegged mandatory cautionary deposit at N35 million, which shall be deposited in a non-interest yielding account in the CBN upon the grant of Approval-in-Principle besides pre-licensing fees such as “application fee – N100,000; licensing fee – N1 million; and annual renewal fee – N250,000”. The statement also lamented a situation where several BDCs are owned by the same promoters “in order to buy foreign exchange multiple times from the CBN Window, which is clearly related to the low level of capital requirements for licensing BDCs”. Henceforth, the statement added, “ownership of multiple BDCs is not permissible, and would be punishable if detected. “All existing BDCs and those currently operating with a Final Approval Letter are required to comply with the requirement on mandatory cautionary deposit by 15 July 2014 while all current applications are expected to comply with these new requirements.” The CBN on Monday extended the deadline for the recapitalisation to July 31, after which it would “cease to fund any BDC that fails to comply…” The circular also urged those BDCs that paid the mandatory cautionary deposits of N500,000 to the CBN prior to 2009, to apply for a refund.