The Central Bank of Nigeria (CBN) has mobilised N216 billion ($598 million) from 26 banks with excess cash holdings as part of strategies to shore up the naira, banking sources told Reuters on Friday.
The local currency has come under enormous pressure in the past couple of months during the coronavirus pandemic, triggered by a steep decline in the price of oil – Nigeria’s chief export – and exiting foreign investors, thereby causing a huge financing gap.
Naira has been touching new lows on the over-the-counter-spot and parallel markets since March after the CBN changed its official rate, suggesting a 15% devaluation, to accommodate the effects of an oil price slump.
It traded at N385/$ at the official market this week, lower than a quoted rate of N361, supported by the central bank.
Banking sources informed Reuters the withdrawal of liquidity came before a currency auction on Friday.
“The central bank is trying to manage the FX rate using the CRR (cash reserve ratio),” one banker said, further stating that the debits had become more recurrent and over the 27.5% limit.
He stated that offshore lenders were the worst affected on the levies because they don’t operate retail business and are debited from their corporate deposits or borrowings.
The apex bank is selling foreign exchange to importers as well as persons with dollar expenses to keep its economy buoyant. However, it is yet to restart forex sales to investors that have sold assets and want to leave the country.
Banks affected by the CBN action are as follows:
Access Bank Plc: N5 billion
Citibank: N11 billion
Coronation Merchant Bank: N2 billion
Ecobank: N9 billion
FBN Merchant Bank: N2.5 billion
Fidelity Bank Plc: N5 billion
First Bank of Nigeria Ltd: N15 billion
FCMB: N15.5 billion
FSDH: N251.2 million
Globus Bank: N1 billion
GTBank: N25 billion
Heritage Bank Plc: N1.5 billion
Keystone Bank Limited: N1.4 billion
Nova Merchant Bank Ltd: N6 billion
Providus Bank: N1.2 billion
Rand Merchant Bank: N335.5 million
Polaris Bank Ltd: N6 billion
Stanbic IBTC: N30 billion
Standard Chartered Bank: N10 billion
Sterling Bank Plc: N3.3 billion
SunTrust Bank: N683.9 million
Titan Trust Bank: N500 million
Union Bank of Nigeria Plc: N8 billion
Unity Bank Plc: N9 billion
Unity Bank Plc: N567.7 million
Zenith Bank Plc: N46.3 billion
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