Manufacturing gets boost on 90-day Forward FX deals

The manufacturing sector of the Nigerian economy received a boost yesterday, following the intervention of the Central Bank of Nigeria (CBN) in the settlement of the balance of the valid applications of 60-day forwards funding deals in favour of agricultural, machinery and raw materials sectors.

Sources at the CBN disclosed that the forwards deals totaling $330.09 million represent requests from the various sectors in the secondary inter-bank market, thereby providing a boost to the manufacturing sector.

According to the sources, the forwards deals comprised of $177.32 million under the 60-day forward sales and $152.77 under the 90-day category. It will be recalled that the CBN on October 17, 2016, had also intervened in the inter-bank FOREX market to specifically meet the forex payment of matured obligations for the importation of agricultural and industrial raw materials, machinery and equipment as well as spare parts and ticket sales remittances for airlines.

Consequently, to ensure that the sectors continue to enjoy the support of the banking sector in sourcing raw materials and machinery, Chief Executive Officers of Deposit Money Banks have signed undertakings to open equivalents of Letters of Credit to the amount of forwards received for each sector.