Tag Archives: CNY

CBN injects $340m, CNY 69m into Retail SMIS

 

THE Central Bank of Nigeria (CBN), at the weekend, injected $340 million into the interbank retail Secondary Market Intervention Sales (SMIS). This is in addition to the sale of 69 million Chinese Yuan (CNY)  in the spot and short tenored forwards.

The figures obtained from the CBN showed that the United States (US) dollar denominated interventions were only for concerns in the agricultural and raw materials sectors.

According to its Acting Director, Corporate Communications, Isaac Okorafor, the sales in the Chinese Yuan were through a combination of spot and 15-day tenors. He said the exercise, in line with its guidelines, were for the payment of Renminbi denominated Letters of Credit for agriculture as well as raw materials and machinery.

Okorafor also explained that the requests attended to were bids received from authorised dealers, adding that Renminbi’s availability was sure to ease pressure on the Nigerian foreign exchange market.

He attributed the relative stability in the foreign exchange market hugely to the continued intervention of the CBN as well as the sustained increase in crude oil prices in the international market.

The CBN spokesman further assured that the CBN would remain committed to ensuring that all the sectors continue to enjoy access to the foreign exchange required for the business concerns, whether in US dollars or Chinese yuan.

It will be recalled that the CBN on Friday, July 20, announced the commencement of its intervention in the sale of foreign exchange in Chinese Yuan (CNY), marking the concrete commencement of the Bilateral Currency Swap Agreement (BCSA) signed with the People’s Bank of China (PBoC) on April 27, 2018.

The statement announcing the flag-off of the sale had explained that there would be no predetermined spread on the sale of FX Forwards by authorised dealers to end-users under the Special SMIS-Retail, adding that authorised dealers would be allowed to earn 50 kobo on the customers’ bids.

Meanwhile, $1 exchanged for N360 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.35.

CBN commences Chinese Yuan sales

 

 

The Central Bank of Nigeria (CBN) flagged off its intervention in the sale of foreign exchange in Chinese Yuan (CNY), Friday, signaling the consummation of the Bilateral Currency Swap Agreement (BCSA) signed with the People’s Bank of China (PBoC) on April 27, 2018. CBN, in a statement disclosed that the sales would be through a combination of spot and short tenured forwards. Chinese Yuan.

Chinese Yuan
                                                       Chinese Yuan
It added that the exercise, which would be Special Secondary Market Intervention Sales (SMIS) retail, would be dedicated to the payment of Renminbi denominated Letters of Credit for raw materials and machinery and agriculture.
The bank’s spokesman, Mr. Isaac Okorafor, explained that the CBN would receive bids from all authorized dealers. He added that due to the peculiarity of the exercise, the CBN would not be applying the relevant provisions of its Revised Guidelines for the Operation of the Inter-bank Foreign Exchange Market, which direct all SMIS bids to be submitted to the CBN through the Forex Primary Dealers (FXPDs).
According to Mr. Okorafor, the CBN would also not be applying the relevant provisions of the Guidelines which equally provide that “Spot FX sold to any particular end-user shall not exceed 1% of the overall available funds on offer at each SMIS session”.
He explained that authorised dealers were requested to submit their customers’ bids from 9.00 am to 12.00 pm on Friday July 20, 2018, adding that bids received after the stipulated period would disqualified.
On funding, he disclosed that authorized dealers were to debit the customers’ accounts for the Naira equivalent of their bids, stressing that the CBN would debit authorized dealers’ current account on the day of intervention to the tune of the naira equivalent of their bid request.
Okorafor furtherexplained that there would be no predetermined spread on the sale of FX Forwards by Authorised Dealers to end-users under the Special SMIS-Retail, adding that authorised Dealers would be allowed to earn 50 kobo on the customers’ bids.
While also explaining that the bids were on Spot FX basis as the Authorised Dealers’ accounts with the CBN would be debited in full for the Naira equivalent of the USD bid amount, he advised customers that were not willing to accept the settlement terms not to participate in this Special SMIS – Retail.
Similarly, he disclosed that forward bids would be settled through a multiple-price book building process and would cut-off at a marginal rate to be disclosed after the conclusion of the Special SMIS – Retail process.
The CBN spokesman equally urged customers not willing to accept the terms of the forward rate not to participate in this Special Chinese Yuan SMIS Intervention.
Meanwhile, Okorafor emphasized that the CBN reserved the right not to make a sale if it had the impression that the exercise did not provide an effective price for the determination of the CNY/NGN exchange rate.