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Tag: exchange rate

  • CBN assures of stability in exchange rate

    CBN assures of stability in exchange rate

    The Central Bank of Nigeria (CBN), has assured of stability in naira/ dollar exchange rate.

    The CBN Governor Mr Olayemi Cardoso, said this at an interface with the Senate Joint Committee on Banking and Insurance in Abuja on Friday.

    “In terms of volatility of the exchange rate, we are using various tools to ensure stability of exchange rate sooner than later.
    “I really can’t tell other than to say that I do believe that once all the measures kick in, there will be price discovery that will indeed make sense for everybody.

    “We all have a responsibility in ensuring demand and supply. We are working on supply, but on the demand side, we all have to moderate our various interests on that.

    “This is to ensure that demand begins to come to a level that is sustainable,” he said.

    Cardoso said that the apex bank don’t have a magic word to stabilise the foreign exchange, saying that Nigerians also must reduce frequent demand for dollars for personal use.

    He said that the country must begin to look inward on how to improve its education and health institutions, to reduce demand for dollars.

    “Our argument is that Nigerians must work together, to moderate demand for dollar. Where there are opportunities to substitute locally, we should do so.

    “I believe that if we are able to up our game in the areas of education, then the demand for people to go abroad to spend money will not arise.

    “We should put together a committe, to moderate these things, everyone has a responsibility,” he said.

    Cardoso said that the CBN had worked hard to ensure that crisis of confidence on the bank had been diluted.

    “International investors are happier to come and invest in our economy.

    “We have seen an increase in appetite for Nigeria, as a result of which, the volume of trading in the foreign exchange market in the pass few days.

    “It has exceeded what we have seen in years, that is a solid sign of return to confidence in our economy,” he said.

    On his part, the Minister of Finance, Mr Wale Edun, said that the ministry plans to introduce major tax reforms to increase non-oil revenue.

    “We are looking at ensuring that government expenditure is carefully spent, even the President has reduced his own expenditure.

    “For the medium term, be assured that the monetary and the fiscal policies being implemented, are going to increase production and funding, for the government will play its own role,” he said.

    The Chairman of the Committee, Sen. Yahaya Abdullahi, called on the economic team, to work together to provide solutions to the hardship being faced by Nigerians.

    “I’m 74 years old and I have never seen something like this. We need solutions.

    “We have to sit down and seize all opportunities that we have, we need to not only think out of the box but bring innovative and creative thinking,” he said.

  • Naira appreciates slightly against US Dollar

    Naira appreciates slightly against US Dollar

    Nigerian currency, Naira has again appreciated  against the US dollar at the foreign exchange market.

    FMDQ’s official data showed that the country’s currency appreciated to N791.25 against the dollar at the close of work on Friday, compared to N841.14/$1 on Thursday.

    The figure represents a 5.87 per cent or N49.39 gain compared to the exchange rate on the previous day.

    Meanwhile, at the parallel market, naira maintained a level of stability.

    A Bureau De Change operator in Wuse Zone 4 Abuja, Dayyabu Mistila, confirmed that he sold dollar at N1140 and bought at N1125 on Friday.

    Recall that the naira recorded a N31.23 gain on Wednesday despite an October inflation hike in Nigeria.

    Naira has been experiencing turbulent times in recent months.

  • Again, Naira depreciates, banks hit by dollar shortage

    Again, Naira depreciates, banks hit by dollar shortage

    The Naira has continued to depreciate against the dollar on the Investors and Exporters (I&E) and parallel markets.

    The data and information gathered from both segments showed.

    Findings show that the currency has lost  N100 after sliding from 860/$ to 960/$ at the parallel market as of Friday.

    Recall that the Central Bank of Nigeria (CBN) enabled the free float of the naira against other global currencies in June, the naira had traded at 471/$ at the Investor & Exporter window.

    However, on June 13, a day after the regulator floated the local currency, the naira rose to 664/$ the next day.

    Checks show that the currency has now slided to an all time low of 925/dollar in Lagos.

    On Friday, the naira reached a high of 799/$ before closing at 740.60/$ at the I&E forex window. However, at the parallel market, the naira closed at 930/dollar in Lagos and 960/$ in Abuja at the parallel market.

    The development came as dollar shortage hits banks with several lenders complaining of not having enough greenback to meet customers’ demand.

    At the parallel market, currency dealers also complained of dollar shortage.

    Bank officials said the CBN removal of cash deposit limits on domiciliary accounts in June had led to the repatriation of funds through the banks.

    As a result, he said the demand for the dollar had outweighed the supply significantly.

    “Some of the dollars are being repatriated through the banks but the demand is still higher than supply because everyone is still sourcing for dollar for imports, PTA, BTA, others,” an official of a lender, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, said,

    “Nigerians are still hoarding dollar, customers are still hoarding FX because they don’t trust the policy. Banks are not getting forex supply from the CBN regularly like before,” he added.

    The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, said that liquidity squeeze in the FX market had continued to put the naira under heavy attack from speculators.

    He said, “The dwindling supplies in the I&E window shifted the demand to the parallel market where volatility and spikes is most pervasive. The entire forex market is plagued by liquidity shortages.

    “The banks, as a result of the supply shortages, are limiting their available position for the financing of visible letters of credit and abandoning the invisible request like PTA, school fees, medicals of their clients and inadvertently adding more pressure in the parallel market.”

    He added, “As it is, most licensed BDCs due to their demand for KYC requirement have lost their clients to the parallel and undocumented space with no regulation and standardisation. It is indeed a difficult time for most of our members as we are excluded from the harmonised market.”

    Proffering solutions, Gwadabe said Nigerians should aspire to have a stable exchange rate devoid of illegal economic behaviour like arbitrages, hoarding and panic buying.

    “ABCON is desirous to partner the apex bank and the Federal Government for an elaborate dialogue and engagement to champion paths to naira recovery,” he said.

     

  • Unification of exchange rate will attract investors, boost capital market growth – ICAN

    Unification of exchange rate will attract investors, boost capital market growth – ICAN

    The Institute of Chartered Accountants of Nigeria (ICAN) has noted that the unification of the exchange rate in the country will aid the growth of the securities market and attract foreign investments to Nigeria.

    According to INEC, the previously adopted model, known as the double-window exchange contributed negatively and fueled high inflationary pressure, corruption, high debt burden and reduced investments into the country.

    ICAN has now expressed optimism that the newly introduced unification of the exchange rate would increase the government’s revenue in naira terms, which would result in a higher tax/revenue to GDP ratio.

    The statement read partly, “The inflow of capital from foreign portfolio investors into the Nigerian capital market will help grow the market and allow companies to raise capital efficiently to finance their growth ambitions.

    “It is expected that the unified exchange rate will serve as a catalyst for investment flows into the country, which will boost our foreign exchange reserve, grow the economy, create employment, and improve the quality of life. Foreign portfolio investors are expected in the near term whilst foreign direct investors that require more investment appraisal time will come in subsequently.”

    However, OPEC noted that corporate tax collection may decline as many businesses would experience foreign exchange losses due to the higher exchange rate.

    Continuing, the statement stated that,  the service cost of the government’s external debt which is denominated in foreign currency, would go up, adding that Nigeria’s current public debt, which currently stands at over $40bn would increase by N12tn.

    The total debt to Gross Domestic Product ratio, ICAN said would also increase by five per cent due to the total debt rising to N90tn.

    It read further, “This new policy is applauded by the Institute of Chartered Accountants Nigeria. It is expected that this action will generally lead to short-term pains that will yield long-term gains. We, however, provide the following recommendations to ensure that the desired objective of this policy is achieved and there is growth in the Nigerian economy.

    “Timely appointment of a new CBN governor, who will provide a credible long-term direction for this policy: This will provide certainty and stability, and boost investor confidence to inflow capital into the country. Effective and consistent implementation of the policy: This will ensure that no uncertainty is created by the mode of implementation and there is constant communication with key stakeholders such as businesses and investors amongst others.”

  • Naira continues to depreciate

    Naira continues to depreciate

    The Naira on Wednesday depreciated against the dollar at the investors and exporters window, exchanging at N763.17.

    The Naira depreciated by 0.87 per cent when compared with N756.61 for which it exchanged for the dollar on Tuesday.

    The open indicative rate closed at N741.21 to the dollar on Wednesday.

    An exchange rate of N815 to the dollar was the highest rate recorded within the day’s trading, before it settled at N763.17.

    The Naira sold for as low as 476 to the dollar within the day’s trading.

    A total of 96.44 million dollars was traded at the official investors and exporters window on Wednesday.

  • Unified Exchange Rate: International airfares rise

    Unified Exchange Rate: International airfares rise

    Following the increase in the exchange rate in the country, the prices of air tickets from Nigerian routes to destinations outside the country have also increased significantly.

    The increase in airfares arose as a result of currency floating recently embarked upon by the country’s apex bank, the Central Bank of Nigeria (CBN).

    Recall that CBN last week introduced new forex guidelines aimed at unifying the nation’s exchange rate, a move aimed at ending multiple exchange rates in the country.

    About 24 hours after the decision, the naira traded at 664.04/dollar at the I&E window. Two days later, the local currency closed at 702.19/dollar at the close of business on Thursday.

    In previous months, the exchange rate adopted by international airlines for ticket pricing had risen consecutively from about N445/dollar to about N660/dollar about two weeks ago.

    However, the latest move by the CBN has made IATA to adopt the exchange rate on the I&E Window.

    Prior to the latest development, IATA used to adopt NAFEX rate published on the FMDQ Exchange.

    The development came as summer travel season began a week ago with ticket prices rising by 25 per cent.

     

  • Naira plunges to new low by 16.19%

    Naira plunges to new low by 16.19%

    The Naira on Monday depreciated against the dollar at the Investors and Exporters window, exchanging N770.38 to the dollar.

    The local currency showed a 16.19 per cent decrease when compared with N663.04 it exchanged to the dollar at the close of business on June 16.

    The open indicative rate closed at N703.50 to the dollar on Monday.

    An exchange rate of N799 to the dollar was the highest rate recorded within the day’s trading before it settled at N770.38.

    The Naira sold for as low as N461 to the dollar within the day’s trading.

    A total of 78.03 million dollars was traded at the official Investors and Exporters window on Monday.

  • Currency floating: Dangote, Nigerian billionaires lose massively as Naira falls to 702/$

    Currency floating: Dangote, Nigerian billionaires lose massively as Naira falls to 702/$

    Following the Central Bank of Nigeria’s unification of exchange rate, Nigerian billionaires including Aliko Dangote and Abdulsamad Rabiu listed among the 500 richest men in the world, have lost more than a combined $5.85 billion, according to the Bloomberg Billionaire Index (BBI).

    This is even more so as the rate of the Naira plummeted to N702.19/dollar at the close of market operations on Thursday.

    The index revealed that Dangote, President of Dangote Group, lost about $3.12 billion in the latest update, while Rabiu, CEO of BUA Group, was said to have lost $2.73 billion from his wealth in the first 24 hours after the float.

    Nigeria has allowed for a free float of the national currency against the dollar and other global currencies.

    Nigeria has abandoned its years-long currency peg and allowed the naira to trade freely, traders and local bankers said, prompting the biggest single-day fall in its history.

    The naira has now lost about five percent of its value within 24 hours from the N664.04/dollar recorded at the close of business on Wednesday.

    Speculations are rife that the Central Bank of Nigeria might begin to supply foreign exchange to the market in the coming days.

    It was gathered that the CBN directed Deposit Money Banks to remove the rate cap on the naira at the official Investors’ and Exporters’ Windows of the foreign exchange market.

    This came barely two weeks after President Bola Tinubu promised to unify the nation’s multiple exchange rates and less than a week before the suspension and detention of CBN Governor Godwin Emefiele, whose unorthodox monetary policies had become a stumbling block to investors and the economy.

    The move has been hailed by some financial experts and economists who made it known that the move would unify the country’s multiple exchange rates and sanitize the FX market.

    The development means buyers and sellers of foreign currency in the official FX markets are now allowed to quote rates they find comfortable in the FX market, as against the previous practice where rates were dictated by the Central Bank of Nigeria.

    Following the development, the naira has been on a free fall, weakening to 702.19/dollar at the close of trading at the I&E Window on Thursday, according to data from the FMDQ Securities Exchange.

    According to the statement, the CBN has collapsed all foreign exchange segments into the I&E window.

    It read, “The Central Bank of Nigeria wishes to inform all authorised dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.

    “Re-introduction of the ‘Willing Buyer, Willing Seller’ model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DlR/ClR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window.

    Meanwhile, at the parallel market on Thursday, the naira closed flat at 757/dollar, according to currency dealers in Kano, Abuja and Lagos.

  • Naira appreciates slightly after Tinubu’s inauguration

    Naira appreciates slightly after Tinubu’s inauguration

    The Nigerian currency, naira appreciated slightly yesterday upon the assumption of Nigeria’s newly sworn-in president Bola Tinubu.

    The black market opened on Monday at N763 against the US dollar but dropped by N9 at the close of trade.

    Prices at Zone 4, a popular Bureau de Change hub in Abuja closed between N755 and N754 against the dollar.

    Recall that Tinubu said he will unify the exchange rate to help the naira gain value.

    The secondary market intervention sales retail window, the small and medium-size enterprises (SME) window, and the window for invisibles.

    The black market for the BDC dealers is another unofficial window with a huge margin.

    He said, “Monetary policy needs thorough house cleaning. The Central Bank must work towards a unified exchange rate.

    “This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.

    “We shall ensure that investors and foreign businesses repatriate their hard earned dividends and profits home.”

     

     

  • Naira begins new week on negative note

    Naira begins new week on negative note

    The Naira depreciated against the dollar on Monday, exchanging for N464 at the investors’ and exporters’ window.

    The rate represented a decrease of 0.36 per cent when compared to the N462.33 it exchanged at the close of business on May 12.

    The open indicative rate closed at N463 .50 to the dollar on Monday.

    A spot exchange rate of N467 was used for trading within the day before it settled at N464.

    The spot exchange rate was determined instantly.

    The Naira sold for as low as N460 to the dollar within the day’s trading.

    A total turnover of 55.10 million  dollars was traded at the official Investors’ and Exporters’ window.