- The CBN will today fund one-month forward contracts of $697 million on the interbank market, effectively improving dollar liquidity in the market, as the accounts of customers that hedged against the American dollar through their banks, last month will be credited. On the first day of trading under the revised rules for the interbank market on June 20, the CBN had cleared a $4.02 billion backlog by selling $532 million on the spot market and $3.487 billion in the forwards market. This measure is seen as the latest attempt to ease pressure on the naira which fell to its lowest level Thursday since the guidelines were revised last month for trading on the interbank market. The naira closed at ₦310.43 to a dollar, compared to ₦294.24 on Wednesday. While the appreciation in the official rate was significant, the naira did not budge at the parallel market, remaining unchanged at ₦375.
- Finance minister, Kemi Adeosun says the FG saves ₦6 billion monthly through wide-ranging cuts in the recurrent expenditure. While briefing senators on the state of the Nigerian economy, the minister said the Buhari government inherited salaries and wages of ₦169 billion, which it has reduced to ₦159 billion, and added that the government will direct and model economic policies away from oil and towards non-oil revenue flows as global demand for oil decreases and supply increases.
- A reversal in an electricity tariff hike will increase a ₦300 billion funding gap currently hammering Nigeria’s power sector, industry operators say. According to the Executive Director of the Association of National Electricity Distributors, Sunday Oduntan, if a court ruling on the reversal of tariff is implemented, the outcome on the sector and the overall economy would be more severe than people imagined. A Lagos Federal High Court recently reversed a 45 percent increase in electricity tariff by NERC in a landmark judgement, declaring it illegal. The Discos and NERC have filed separate appeals against the ruling.
- The CBN has provided a loan to Skye Bank to boost its liquidity after the lender breached requirements on capital and lending. The short-term lending facility will allow new management to “ensure that some withdrawals it suffered in the wake of the undue panic of last week do not adversely affect its operations,” said CBN spokesman, Isaac Okorafor. The regulator has also issued guarantees to the bank’s depositors and creditors as a demonstration of its health. CBN replaced Skye’s executive team earlier this month after it breached required thresholds for liquidity and non-performing loans, plunging its share price to record lows and leading declines among other Nigerian lenders despite assurances that the banks were healthy.