Airlines unable to remit ticket sales
Firms, individuals hoard forex on election concerns
CBN: Hoarders are in for a surprise

Obinna Chima
Most firms in Nigeria seeking to utilise and remit US dollars overseas are finding it extremely difficult to purchase FOREIGN EXCHANGE due to the shortage of supply of the greenback in the economy, THISDAY has learnt.

According to findings, some firms now resort to the black market for dollar purchases. THISDAY also learnt that a lot of foreign airlines operating in the country are finding it a herculean task to convert revenue from their naira ticket sales to dollars, hence making it impossible for them to remit their earnings overseas.

The development has been attributed to the significant drop in FOREIGN EXCHANGE inflow as apprehension over the elections continues to swell.

In addition, oil companies which supply dollars to the interbank market have seen their earnings fall on the back of crashing OIL PRICES, and the little they have, they are unwilling to offload as concerns mount over the elections.

Owing to the development, individuals and firms have been holding on tightly to their dollar holdings in anticipation that the naira will depreciate.

However, CBN officials, who spoke to THISDAY yesterday, said companies that have been shorting the naira, because they expect it to sink further against the greenback, “are in for a surprise”.

“We know what is happening and we intend to flood the market with dollars. So those thinking that they can take advantage of the spread will be in for a shock,” said one central banker who did not want to be named.

Although the Central Bank of Nigeria (CBN) has been able to hold the naira at N197 to a dollar in the interbank market, a lot of firms and individuals holding dollars are not willing to sell, in anticipation that the naira value would depreciate after the elections. The naira sells for about N219 to a dollar in the black market.

Financial market analysts who spoke to THISDAY yesterday also confirmed the development.

The central bank exactly a month ago stopped the bi-weekly sale of foreign exchange through the Retail Dutch Auction System (RDAS) and Wholesale Dutch Auction System (WDAS), effectively stopping the sale to manufacturers and oil marketing companies at the hugely subsidised official rate.

Following the scrapping of the auctions, the central bank had asked authorised dealers and members of the public to channel all demands for foreign exchange to the interbank market.

The naira has been trading between N197 and N198 at the interbank since the policy was announced.

A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, who confirmed the shortage of dollars in the FOREX MARKET, said: “As we speak, the dollar is king. You don’t see dollars anyhow!”

Ezun explained that “a lot of people are actually going long on the dollar. That is, a lot of people are buying to keep, so they are shorting their naira. That is why the dollar is so scarce.”

He however pointed out that there has been a significant reduction in the volume of dollar supply in the country, especially with the drop in crude oil prices.

“The major source of inflow of forex into Nigeria has always been through crude oil sales, which has dropped in the last couple of months.

“Also, the inflow of foreign investment into the fixed income market has dropped because of the volatility in the market. Add to that autonomous sources, which are the oil companies that are always on the sidelines to support the central bank also, but are hoarding dollars,” he added.

Ezun however felt the central bank was doing the right thing by intervening in the market.

“The best the central bank can do is what it is doing presently. The CBN is always in the market. Today, there is transparency in pricing. For you to buy forex, there must be the underlying documentation. Those you see going to the black market, are those who do not have the necessary documentation to support legitimate purchases of dollars at the interbank market,” he said.

Also, the Managing Director of Cowry Asset Management Limited, Mr. Johnson Chukwu, attributed the scarcity of dollars to the fact that there is only one major supplier, the CBN, in the market.

He argued that foreign investors are also not active in the market presently because of mounting anxiety over the elections.

“So because of the apprehension about the elections, a lot of inflows are on hold and the level of demand for the dollar outweighs supply,” he added.

The CBN is scheduled to hold its second Monetary Policy Committee (MPC) meeting in 2015 next week and the market would be watching keenly for the decisions to be taken by the committee.

The MPC meeting will come up a few days before the presidential election which holds on March 28.

Proverbs 29:2

When the righteous are in authority, the people rejoice;
But when a wicked man rules, the people groan.

scribble:



Dollarization Of The APC Primaries: How Amaehi Vanquished Atiku #saibuhari

The blogosphere was inundated with reports of the excessive sharing of dollars at the All Progressives Congress which took place during the latter part of last week.

One APC supporter and Special Adviser to Osun Governor on Environment, BolaIlori had blown the scandal open after he saw the beginning stages of the dollarization in action.

He took to his Facebook page and scribbled, “Crazy things are happening here!!! Some of these cannot represent the change Nigeria is yearning for. Excessive dollarization by one of the aspirants to is to say the least obscene. I have been involved in political process for decades now, I have never witnessed this volume of raw dollarization of party primaries. I only read about this kind of things in PDP primaries. A question been asked by conscientious delegates is that whoever can be giving out between $2000 to $5000 to…delegates certainly does not represent the kind of change Nigerians want…those who contributed to the pauperization of Nigeria now revel in dollarization… majority of Ondo delegates are still standing with Buhari but have been reduced from 85% to 70% within 24 hours…the remaining has gone with dollars ooo.!!!!!”

One has to wonder how Buhari was able to win the primaries in this era of stomach infrastructure where dollars are like the Biblical manna that God sent down from heaven to nourish the Israelites as they made their way to the promised land.

Sources close to the APC with knowledge of the way the Primaries unfolded have revealed that it was Rivers State Governor, Amaechi who flew back to Rivers State and returned to Lagos on Thursday morning with enough dollars to make Benjamin Franklin blush.

It has been revealed that Atiku offered the delegates $5000 each, but Amaechi doubled it to $10000 a pop. Thus turning the tables in favour of General Buhari.

Since his adventure into the APC, Amaechi has gone out of his way to prove himself a party loyalist, always the first to shoki or azonto at the many events the APC holds, which he himself is usually the chief sponsor.

According to party insiders, Amaechi has overtaken Tinubu as the major financier of the party. One does not need to wonder why he is always at President Jonathan’s throat over misappropriated oil wells or other such business. Anything that diminishes from the State’s coffers will have a ripple effect on his funding budget for the APC.



Joe Francis wrote in from Port Harcourt.


http://www.theheraldng.com/dollarization-apc-primaries-amaehi-vanquished-atiku-saibuhari/

anonimi:
APC dollarisation of sharing $$$$$$$$$$ instead of developing their states is responsible for the scarcity.

anonimi:
APC dollarisation of sharing $$$$$$$$$$ instead of developing their states is responsible for the scarcity.

Adesiji77:


http://www.thisdaylive.com/articles/scarcity-of-dollars-hits-foreign-exchange-market/204477/

olas24u:
Very bad government ! sharing dollars and destroying everything and needs 4 years to finally bury us

lonelydora:
its worse here in Port Harcourt.

cocoduck:

SHUT UP the dollar ROSE against EVERY currency on the planet, but it would soon come down because it hurts the American economy, making them get foreign goods cheaply but will pass through hell to export their goods eg Cars. So don't say what you do not know.

anonimi:


Amaechi, the Donatus General is the Culprit