Banking and Finance

Nigeria’s GDP Declines in Q3 and Q4 2016

The National Bureau of Statistics (NBS) says the Gross Domestic Product in real terms declined in the third and fourth quarters of 2016.

The NBS made this known in its “Nigerian Gross Domestic Product Report on Expenditure and Income Approach for the third and fourth quarter of 2016 released in Abuja.

According to the report, the decline followed the negative growth trend from the first half of 2016.

Overnight Rate Holds at 120% as Naira Supply Dries Up

Nigerian overnight lending rates were quoted around 120 percent on Tuesday after a court ordered a freeze on millions of bank accounts with incomplete identity documents and the central bank sold treasury securities to tighten liquidity, traders said.

The central bank has kept rates high in Africa’s biggest economy to fight inflation and currency weakness and to attract foreign investors. It has been selling treasury securities almost four times a week to soak up naira liquidity.

Central Bank Injects $195m into Currency Market

Nigeria’s central bank said on Monday it had injected $195 million into the interbank foreign exchange market, extending efforts to boost liquidity and alleviate dollar shortages, Reuters reports.

The bank said in a statement it had released $100 million earmarked for the wholesale market, $50 million for small businesses and individuals, and $45 million for certain dollar expenses such as school fees and medical bills.

FG Moves to Seize BVN-less Accounts

Justice Nnamdi Dimgba of the Federal High Court in Abuja has granted a request by Attorney General of the Federation, Abubakar Malami, for a temporary forfeiture of all funds held in bank accounts not linked to BVNs.

Also to be forfeited are funds in accounts whose ownership could not be identified.

The latter are accounts without sufficient know-your-customer credentials, PREMIUM TIMES reports.

The order followed an originating motion of notice filed by Mr. Malami on behalf of the Nigerian government on September 28.

VAT: ₦246.30b Generated in Q2 –Statistics Bureau

The National Bureau of Statistics (NBS) says that N246.30 billion was generated as Value Added Tax (VAT) in the second quarter of the year.

The bureau gave the figure in its “Sectoral Distribution of Value Added Tax’’ for the Second Quarter released on Friday in Abuja.

It stated that the value generated in the quarter was greater than N204.77 billion generated in the first quarter of the year and N187.03 billion realised in the second quarter of 2016.

CBN Sells Treasuries to Keep Naira Liquidity Tight

Nigeria’s central bank sold 98 billion naira of treasury securities on Thursday to keep liquidity tight to support the currency, a day after it auctioned 133.25 billion naira of T-bills, traders said.

The local naira currency has been stable for more than two weeks, supported by central bank interventions, foreign inflows and tight liquidity on the money markets, traders say.

On Thursday, the bank sold the 91-day bill at a higher interest rate of 16 percent plus a 196-day bill at 17.81 percent.

Naira Stands at 361 to Dollar

The Naira on Wednesday exchanged at N361.50 to the dollar at the parallel market, maintaining same rate for the past one-week, the News Agency of Nigeria reports.

The Pound Sterling and the Euro traded at N475 and N425, respectively.

At the Bureau De Change (BDC) window, the naira was sold at N361.50, while the Pound Sterling and the Euro closed at N475 and N425, respectively.

Trading at the investors’ window saw the naira closed at N360.27.

Nigeria's FX Reserves Rises to $33.1b

Nigeria’s foreign exchange reserves rose to the highest in almost three years as of Oct. 12, hitting $33.11 billion, central bank data showed on Tuesday.

That put the country’s dollar reserves back at a level not seen since December 2014, the data showed, according to Reuters report.

The bank did not provide a reason for the increase in reserves. Nigeria’s forex buffer stood at $25.73 billion, up 28.68 percent from a year ago, but is still far off a peak of $64 billion hit in August 2008.

Inflation Rate Drops Marginally, Food Prices Up

Nigeria’s annual inflation rate marginally slowed for an eighth month in September, easing to 15.98 percent, the National Bureau of Statistics (NBS) said on Tuesday in its latest publication of the Consumer Price Index.

This was 0.03 percent points lower than the rate recorded in August (16.01) percent making it the eighth consecutive decline in the rate of headline year on year inflation since January 2017.

However, the food price index showed a marginal rise in inflation at 20.32 percent in September, up from 20.25 percent in August.

Overnight Rate Drops to 20% as Cash Squeeze Bites

Nigeria’s overnight lending rate dropped to 20 percent on Thursday on expectation that a cash squeeze will ease after money market rates more than doubled previous session.

Nigeria’s central bank has kept liquidity tight to support the currency, leaving its benchmark interest rate on hold at 14 percent this year. It also aims to keep rates high to attract foreign inflows into its bond market to boost dollar liquidity.

“The market is a bit tight because of FX purchases which mopped up (naira) liquidity,” one trader told Reuters.