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CBN releases guideline for the $2.5billion currency swap with China

Published

6 years ago

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The Central Bank of Nigeria (CBN) Thursday released the operational guidelines for the $2.5 billion currency swap agreement between Nigeria and China.

The Peoples Bank of China (PBoC) – CBN) Bilateral Currency Swap (BCSA) regulations for transactions with authorised dealers in Renminbi, signed by CBN Director, Financial Markets Department, Alvan Ikoku, showed that commercial and merchant banks participating in the CBN bi-weekly Renminbi bidding are required to open Renminbi accounts with a correspondent bank in China.

The details of such accounts, which may either be with a bank onshore or offshore China, will be given to the CBN.

There will be no predetermined spread on Spot foreign exchange transactions executed through the CBN-Renminbi intervention. Authorised dealers may earn not more than 50 kobo on a customer’s bid, according to the guidelines.

The deal is aimed at providing adequate local currency liquidity for Nigerian and Chinese industrialists and other businesses in order to reduce their difficulties in the search for a third currency, mainly the United States dollar.

The guideline is backed by the statutory mandate of the CBN as set out by the CBN Act 2007. The BCSA is for a maximum amount of Chinese Yuan (CNY) 15 billion for N720 billion with a three-year tenor.

According to the guideline, the swap agreement allows for both banks to among other purposes, make available liquidity in their respective currencies for the facilitation and promotion of trade and investments across the two nations. This will be done through the purchase, sale and subsequent repurchase and resale of the Chinese Yuan (CNY) against naira and vice versa.

Also, the CBN, acting on the CBN Act, 2007, and Bank and Other Financial Institutions (BOFIA), issued regulations on the currency swap which mandated that funds from the policy should be used to finance trade, and direct investment between Nigeria and China.

The funds will also help to maintain financial market stability, and for other purposes that both parties may agree on.

According to the regulations for transactions with authorized dealers in Renminbi, importers intending to import from China shall obtain Proforma invoice denominated in Renminbi as part of the documents required for registration of Form ‘M’. Also, forex purchased in the window will not be used for payments on transactions in which the beneficiaries are not in China.

Authorised dealers, deposit money banks and merchant banks, shall not open domiciliary accounts denominated in Renminbi for customers. “Modes of payment shall be in line with memorandum nine of the foreign exchange manual showing that for letters of credit transactions, all negotiating documents and or shipping documents as may be applicable, must be routed from the beneficiary/ supplier through his/her bank to the issuing bank. For the avoidance of doubt, on no account must a bank endorse or pay on documents that do not comply with the routing outlined above,” the guideline showed.

It added that on bills for collection, documents must be routed to the issuing bank either directly from the supplier’s bank or through the offshore correspondent of the issuing bank. Also, the documents in respect of ‘Not Valid for forex transactions shall be routed by the supplier directly to the applicant’s bank that validates the underlying e-Form ‘M’.

Besides, the CBN may conduct bi-weekly Renminbi bidding sessions even as the Renminbi sales shall be applicable only to trade-backed transactions.

“Importers and exporters shall continue to pay applicable levies on imports and exports respectively while authorized dealers are required to utilize funds within 72 hours from the value date, failing which such funds must be returned to the CBN for repurchase at the bank’s buying rate. The CBN shall debit authorized dealers’ current account on the day of intervention with the naira equivalent of the Renminbi bid request. Bids shall be settled spot through a multiple-price book bidding process and will cut-off at a marginal rate to be disclosed after the conclusion of the Special SMIS-Retail process,” it added.

The CBN reserves the right not to make a sale if in its opinion, the exercise does not provide an effective price for the determination of the naira/ CNY exchange rate, in which case, the CBN may choose to offer another special Secondary Market Intervention Sales (SMIS) retail or wholesale session.

The CBN said the provisions of the regulation shall apply along with all existing CBN guidelines, circulars and directives on the operations of foreign exchange market. The regulation may also be amended from time to time as the bank may deem necessary.

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Finance

AISA Has Refunded The Fees Paid By Yahaya Bello To EFCC

Published

2 days ago

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April 27, 2024

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The Economic and Financial Crimes Commission (EFCC) says the American International School Abuja (AISA) has refunded the fees paid by the immediate past governor of Kogi state, Yahaya Bello, for his children attending the school.

In response to a letter addressed to the Lagos zonal commander of the EFCC, the school said $845,852 was paid in tuition “since the 7th of September 2021 to date”.

AISA said the sum to be refunded is $760,910 because it had deducted educational services already rendered.

“Please forward to us an official written request, with the authentic banking details of the EFCC, for the refund of the above-mentioned funds as previously indicated as part of your investigation into the alleged money laundering activities by the Bello family.

Since the 7th September 2021 to date, $845,852.84 (Eight Hundred and Forty-Five Thousand, Eight Hundred and Fifty Two US Dollars and eighty four cents) in tuition and other fees has been deposited into our Bank account.

We have calculated the net amount to be transferred and refunded to the State, after deducting the educational services rendered as $760,910.84. (Seven Hundred and Sixty Thousand, Nine Hundred and Ten US Dollars and Eighty Four cents).

No further additional fees are expected in respect of tuition as the students’ fees have now been settled until they graduate from ASIA.”

In a chat with The Cable, the spokesperson of the EFCC, Dele Oyewale, confirmed that the school has refunded the money.

‘’The money has been paid into public account,” Dele Oyewale was quoted as saying

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Finance

Godwin Emefiele Disobeyed Direction Of Law With Intent To Harm The Public, He Printed ₦684.5M Using ₦18.9B Says EFCC in fresh charge

Published

5 days ago

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April 23, 2024

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The Economic and Financial Crimes Commission has filed a fresh charge at the High Court of the Federal Capital Territory against the embattled former governor of the Central Bank of Nigeria, Godwin Emefiele.

EFCC in the charge accused Emefiele of approving the printing of N684,590,000 at the rate of N18.96 billion.

EFCC also alleged that Emefiele broke the law with intent to harm the public during his implementation of the naira swap policy of the administration of former President Muhammadu Buhari.

The anti-graft agency also accused Emefiele of unlawfully approving the withdrawal of N124.8 billion from the Consolidated Revenue Fund of the Federation.

EFCC’s top prosecutor, Rotimi Oyedepo, SAN revealed that Emefiele will be arraigned on a new four-count charge before Justice Hamza Muazu

Counts one to four of the charge, read,

“STATEMENT OF OFFENCE: Public Servant disobeying direction of law with intent to cause injury to the public contrary to and punishable under Section 123 of the Penal Code Law, Cap. 89 Laws of the Federation, 1990.

“PARTICULARS OF THE OFFENCE: That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of N375,520,000.00 pieces of colour swapped N1, 000, at the total cost of N11,052, 068,062 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

This and three other charges were stated against him. They read;

“COUNT 2: “That you, GODWIN IFEANYI EMEFIELE, between the 19th of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the Central Bank of Nigeria Act, 2007, by approving the printing of 172,000,000 pieces of colour swapped N500 (Five Hundred Naira) Notes, at the total cost of N4, 471,066,040 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.

“COUNT 3: “That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of 137,070,000 pieces of colour swapped N200 (Two Hundred Naira) Note, at the total cost of N3, 441, 005, 280 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

“COUNT 4: “That you, GODWIN IFEANYI EMEFIELE, on or about the 7th day of October 2020, in Abuja, within the jurisdiction of this Honorable Court, knowingly disobeyed the direction of Section 80 of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended), by approving the withdrawal of the total sum of N124, 860, 227, 865.16 from the Consolidated Revenue Fund of the Federation in a manner not prescribed by the National Assembly, which conduct of yours caused injury to the public and you thereby committed an offence.”

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Finance

Immigration Office Place Ex Governor, Yahaya Bello On Watchlist While IG Of Police Withdraws All Police Officers Attached To Him

Published

1 week ago

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April 19, 2024

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The Inspector General of Police, Olukayode Egbetokun, has withdrawn all police officers attached to the embattled former Governor of Kogi State, Yahaya Bello.

The order for the withdrawal was contained in a police wireless message. The document with reference number:

“CB:4001/DOPS/PMF/FHQ/ABJ/VOL.48/ 34 reads in part;“IG has ordered the withdrawal of all policemen attached to His Excellency and former Executive Governor of Kogi State, Alhaji Yahaya Bello. Acknowledge compliance and treat with utmost importance.

Please, above, for your information and strict compliance.”

Meanwhile, the Nigerian Immigration Service has placed the former governor on its watchlist.

This comes after the Economic and Financial Crimes Commission on Thursday, April 18, declared him wanted in connection to an alleged case of money laundering to the tune of N80.2bn.

From EFCC

In a circular signed by an Assistant Comptroller of Immigration, DS Umar, for the Comptroller-General, Kemi Nandap, the NIS detailed the former governor’s name, nationality, and passport number.

From National Immigration Office

And read;

“I am directed to inform you that the above-named person has been placed on the watch list.

Suffice to mention that the subject is being prosecuted before the Federal High Court Abuja for conspiracy, breach of trust, and money laundering vide letter Ref; CR; 3000/EFCC/LS/EGCS.1/ TE/Vide/1/279 dated April 18, 2024.

If seen at any entry or exit point, he should be arrested and referred to the Director of Investigation or contact 08036226329/07039617304 for further action.” the circular reads in part.

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