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Rescued banks: No going back on Sept 30 deadline – CBN

By Babajide   Komolafe
LAGOS — The Central Bank of Nigeria, CBN, yesterday said there was no going back on the September 30 deadline for the eight rescued banks to recapitalise.

Meanwhile, the naira strengthened against the dollar at the inter-bank market, yesterday, as two major oil firms sold dollars to some banks, which helped boost foreign exchange holdings in the inter bank market.

CBN Deputy Governor, Financial Sector Surveillance, Dr Chiedu Moghalu said this in Lagos while briefing newsmen on the progress of the recapitalisation efforts of the rescued banks.

He said:  “The deadline is firm. I can tell you there would be no going back. It is not in the interest of financial sector stability the negotiations on recapitalisation of the rescued banks become an endless and timeless process. That is why there must be deadlines. If we allowed it to continue people will ask questions.
“We cannot afford to leave eight banks which account for 20 per cent of the asset of the industry in a fragile state. We need to resolve their case quickly so that they can join the other banks and also so that we can move on to the other challenges in the industry.  There is also the challenge of continued haemorrhaging of the eight banks,” he said.
Meanwhile, at the foreign exchange market yesterday, the naira strengthened against the dollar at the inter-bank market as Total and Agip oil companies sold dollars to some banks, which helped boost foreign exchange holdings in the inter bank market.
The naira appreciated to N152.20 to one US dollar from N152.38 at which it closed on Friday’s.

Bankers disclosed that two energy multinationals, France’s Total and Agip, a unit of Italy’s Eni, sold around $132 million. The central bank sold $400 million at N150 to the dollar at its bi-weekly foreign exchange auction, short of the $412.74 million demanded, but higher than the $250 million sold at N150.08 to the dollar at the previous auction on Wednesday.
Bankers attributed the increase in dollar demand at the official window to activities of petroleum products importers, but noted the willingness of the central bank to meet demand at its auction.
“The dollar inflows from the energy companies were sufficient to counter the shortfall at the official window, helping the naira to appreciate against the dollar,” bankers said. We are expecting that more oil majors will sell dollars this week and next as part of their month-end sales cycle, helping to boost liquidity and support for the naira,”. Most of the oil companies operating in Nigeria sell dollars to some bankers on a monthly basis to obtain naira for their local operations. Bankers said they expected the naira to appreciate further to around N151.60-152 to the dollar in the days ahead.


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