As I&E turnover dips 39% to $30.eight bn By Babjide Komolafe & Elizabeth Adegbesan However the sharp depreciation of the Naira and th
As I&E turnover dips 39% to $30.eight bn
By Babjide Komolafe & Elizabeth Adegbesan
However the sharp depreciation of the Naira and the acute greenback scarcity within the financial system, earnings from overseas alternate buying and selling by Nigeria’s prime banks rose sharply by 110 p.c, year-on-year, to N145 billion within the 9 months ending September 2020.
Throughout the 9 months interval, the Naira suffered 5.9 p.c and 28 p.c depreciations within the Buyers and Exporters (I&E) window and within the parallel market respectively.
Additionally through the interval the exit of International Portfolio Buyers, FPIs, and sharp decline within the nation’s foreign exchange earnings triggered by the COVID-19 pandemic, led to acute greenback shortage within the financial system.
Amidst these hostile improvement, among the main banks recorded big will increase in foreign exchange earnings whereas one in every of them recorded over 1,000 p.c rise in foreign currency trading earnings through the 9 months interval.
Monetary Vanguard evaluation of the monetary statements of 12 banks confirmed that the foreign currency trading earnings had been dominated by six banks. These are Entry Financial institution, GTBank, UBA, Union Financial institution, FCMB and Stanbic IBTC.
Three different banks, nevertheless, recorded decline of their foreign currency trading earnings specifically, First Financial institution, Sterling Financial institution and Wema Financial institution.
Main the chart is Entry Financial institution, which recorded foreign currency trading earnings of N63.98 billion in 9 months ending September 2020. This represented enhance of 542 p.c when put next with N9.96 billion recorded within the corresponding interval of 2019.
Stanbic IBTC Financial institution adopted with foreign currency trading earnings of N44.37 billion in 2020, up by 63 p.c, from N27.19 billion within the corresponding interval of 2019.
UBA’s measurement of foreign exchange earnings got here third however development fee was marginal rising by simply 1.6 p.c to N19.88 billion in 2020, from N19.572 billion recorded within the corresponding interval of 2019.
GTB Financial institution, on its half recorded N12.11 billion as foreign currency trading earnings in 2020, up by 203 p.c from N3.99 billion in 2019.
Union Financial institution additionally elevated its foreign currency trading earnings by 156 p.c to N2.28 billion in 2020, from N889 billion within the corresponding 2019.
FCMB’s foreign exchange earnings, although comparatively small in measurement, represented essentially the most astonishing development fee of 1,024 p.c enhance hitting N2.26 billion in 2020, from N201 million within the corresponding interval of 2019.
Decliners
First Financial institution suffered the most important decline in foreign currency trading within the 9 months ending September 2020. The statements of the financial institution’s holding firm present it recorded 89 p.c decline in its foreign currency trading earnings to N624 million in 2020, from N5.695 billion within the corresponding interval of 2019.
Sterling on its half recorded 65 p.c decline in its foreign currency trading earnings which fell to N128 million in 2020 from N364 million within the corresponding interval of 2019.
Wema Financial institution additionally recorded 4.5 p.c decline in its foreign currency trading earnings which dropped to N142 million in 2020 from N149 million in 2019.
Turnover in I&E dips 39%
In the meantime, quantity of {dollars} traded (turnover) within the I&E window of the Nigerian overseas alternate market fell by 39 p.c to $30.eight billion in 11 months ending November 2020, from $57.07 billion within the corresponding interval of 2019.
The sharp decline displays the dearth of foreign exchange provide into the window, particularly from FPIs which fled Nigeria and different rising markets to flee the foreign money depreciations anticipated within the international locations.
Monetary Vanguard evaluation of month-to-month turnover within the I&E window confirmed that turnover dropped by six p.c in January 2020 to $5.6 billion from $5.Three billion in December 2019.
However in February 2020, turnover rose by 31 p.c to $7.34 billion and up once more by 3.Zero p.c to $7.55 billion in March.
Nevertheless, turnover fell sharply by 88 p.c in April to $873.96 million and down once more by 30 p.c in Could to $612.45 million.
The fluctuation intensified by way of the remaining months of the yr as turnover rose sharply by 62 p.c in June to $992.12 million however went down by six p.c to $937 million in July.
The downward pattern continued in August as turnover dipped by 10 p.c to $843.97 million solely to rise by 129 p.c in September to $1.98 billion.
In October, turnover fell by 14 p.c to $1.7 billion however rose by 37 p.c to $2.32 billion in November.
Monetary Vanguard evaluation of weekly turnover in November confirmed that $641.7 million was traded within the first week of November. Turnover rose by 9.Zero p.c to $701.5 million within the second week however down by 0.5 p.c to $366.5 million within the third week.
The turnover elevated in the fourth week by 56 p.c to $572.6 million and stood at $35.15 million on the final day of November.
The naira depreciated by N4.62 kobo in November because the indicative alternate fee of the window rose to N390.25 per greenback on 30th November from N385.63 per greenback on November 2nd, 2020.