Nigeria – The naira exchanged to one dollar at 172 between Monday, last week, and yesterday, likewise at the bureaux the change (BDC) where the subsidiaries of dealer banks are the main traders (classified as class “A” BDCs). Naira stabilised at 147/$1 at that window in the review period. The stability had been
recorded at the official market for over a month. That condition still prevailed last week as end users bought the dollar from the CBN at N145.75 on Monday last week, the same rate it was exchanged the previous Friday. Last Tuesday, it exchanged at N145.70/$1 and N145.75/$1 last Wednesday. It also stabilised at N145.75/$1 last Thursday, before firming up by 5 kobo to close at N145.70/$1 last Friday. Same rate prevailed at the close of business yesterday.
Three banks, namely Zenith, Diamond and Access Banks, have continued to dominate the Central Bank of Nigeria (CBN) moderated Retail Dutch Auction System (RDAS). The banks controlled about 41.4 per cent of the total transactions in the market for the period January 19, 2009 – when RDAS was re-introduced – to March 27, 2009.
According to the RDAS summary of forex sales to end users by the banking watchdog for the period, a copy of which was obtained by THISDAY, the three banks collectively accounted for $2,555,8343,57.74 out of the total $6,173,102,464.68 sold to the 26 financial institutions, including the Bank of Industry and NEXIM.
Further analysis of the result shows that the Nigeria foreign exchange market was dominated by only a few players with the top six banks accounting for more than 60 per cent of the total sales.
Market analysts believe the volume of purchases at the RDAS is perhaps the best indicator of the level of liquidity of the Nigerian banks. That is, the higher the volume of foreign exchange purchased, the more liquid the bank is, as the CBN will only sell to banks that are fully funded.
Zenith Bank retained its dominance of the market, controlling a market share of 17.99 per cent. This, however, indicated a slight reduction when compared with19.22 per cent market share in January 19 to February 13, 2009.
Diamond Bank retained its second position, controlling 12.70 per cent of the total volume sold; a decline from 14.73 per cent market share between January 19 and February 13.
Access Bank, however, consolidated its current position (third) by controlling close to 10.71 per cent of the total sales volume; an increment from 10.55 per cent in market between January 19 and February 13. In terms of incremental volumes, Access Bank is also number two with $208.326 million in the past two weeks.
GTBank emerged fourth, cornering 9.49 per cent of the market with a gross of $585,785,005.20. First Bank trailed with 4.99 per cent of the market amounting to $308,043,095,36; Stanbic IBTC Bank – 4.39 per cent, translating into $271,037,723.92; United Bank for Africa – 4.37 per cent ($269,607,755.05), while Standard Chartered Bank’s 4.03 per cent depicted $248, 869,292.82.
Other top players include Ecobank – 3.90 per cent ($240,781,846.14); Union Bank of Nigeria – 3.84 per cent ($237,182,801.62); Citibank – 3.46 per cent ($213,720,514.16); Intercontinental Bank – 3.38 per cent ($208,673,637.59); First City Monument Bank – 3.25 per cent ($200,838,671.99), while Fidelity Bank had 2.95 per cent, depicting a total of $181,807,855.37.
Flour Mills ($263,352,976.15), MTN Nigeria Communications Ltd ($233,914,120.99), Stanbic Nominees ($199.195, 271.73), Folawiyo Energy Limited ($145,618,725.96) and Zain Nigeria Limited ($125,101,751.80) were the top five forex users by volume during the period respectively.
They were trailed by Fineshade Energy Limited ($124, 503,256.84), MRS Oil and Gas Ltd ($120,909,309.50), Zenon Petroleum and Gas Limited ($113,976,439.63), Western Metal Products ($88,294,139.59 and Africa Finance Corporation ($86,000,000.00), – emerged sixth, seventh, eighth, ninth and tenth respectively by volume during the period.
Meanwhile, the Nigerian currency, the naira, stabilised in price relative to the dollar across the official, bureaux de change and open markets from last week Monday, last week, till yesterday. That was the first time the naira was stabilising at the open market since this year, following its steady depreciation and oscillation from November 26, 2008.
The naira has lost over 20 per cent of its value against the dollar after the CBN began limiting the supply of foreign exchange to banks last November in an attempt to protect its reserves following a plunge in the price of oil.
Crude oil, which accounts for 90 per cent of Nigeria’s export earnings, has slumped 73 per cent since reaching a record $147.27 in July last year.
The naira exchanged to one dollar at 172 between Monday, last week, and yesterday, likewise at the bureaux the change (BDC) where the subsidiaries of dealer banks are the main traders (classified as class “A” BDCs). Naira stabilised at 147/$1 at that window in the review period.
The stability had been recorded at the official market for over a month. That condition still prevailed last week as end users bought the dollar from the CBN at N145.75 on Monday last week, the same rate it was exchanged the previous Friday. Last Tuesday, it exchanged at N145.70/$1 and N145.75/$1 last Wednesday. It also stabilised at N145.75/$1 last Thursday, before firming up by 5 kobo to close at N145.70/$1 last Friday. Same rate prevailed at the close of business yesterday.
The wide gap that used to exist between the demand made by dealers on behalf of their customers and what the CBN offered for sale, has therefore been significantly curtailed.
from Thisdayonline