Naira falls at interbank market as Manufacturers, CBN differ on $650m disbursement

The Naira on Monday fell freely at the official interbank market to exchange at N350 to a dollar from N328 it traded last Friday.

At the Bureau De Change segment, the naira closed at N385 against the dollar, CBN rate, while the Pound Sterling and the Euro closed at N564 and N510 respectively.

Trading at the parallel market saw the naira exchanged at N470 to the dollar, while the Pound Sterling and the Euro traded at N560 and N510 respectively.

Traders at the market express hope that the naira would see better days as Diaspora remittances was expected to boost liquidity at the yuletide season.

Meanwhile, the directive by the Central Bank of Nigeria (CBN) to banks to give 60 per cent of their foreign exchange allocation to the real sector of the economy has been mired in controversy, as manufacturers and lender are at logger heads over how the initial $650 million was disbursed under the policy.

While the apex bank quoted reports indicating that over $650 million of the funds had been disbursed to local manufacturers through the banks in the last one month, the manufacturers alleged that the lender had been frustrating efforts by its members to secure the 60 per cent allocation, which is meant for local manufacturers to build capacity in the industry.

Besides, the local manufacturers also noted that reports from the banks showed that it was only $300 million that the CBN pumped into the special forex window.

The controversy is coming just as the Lagos Chamber of Commerce and Industry (LCCI) is demanding that the banking watchdog reviews the current Monetary Policy Rate (MPR).

President, Manufacturers Association of Nigeria (MAN), Dr. Chief Frank Udemba Jacob said that it had been difficult for members and other local manufacturers to access the funds because of banks’ lackadaisical attitude to the policy. Specifically, he said many of the banks are complaining that they cannot grant forex to local manufacturers at 60 per cent, as the apex bank is yet to honour the policy.

But Deputy Director, Communications, CBN, Isaac Okoroafor, debunked the MAN’s allegations. He said that many local manufacturers had benefitted from the funds with ease, which has impacted positively on their operations. He said that commercial banks in the country had disbursed over $650 million to local manufacturers, who needed forex to import goods such as machinery/ technology into the country.

Many indigenous manufacturing companies have been groaning over scarcity of forex in circulation, forcing them to shut down operations. Already, local tomato manufacturer, Erisco Foods Limited, has shut down its business amidst harsh operating environment.