TheNewsGuru

Tag: FX

  • US Dollar fights back as Naira falls to N1, 000/$ at official market

    US Dollar fights back as Naira falls to N1, 000/$ at official market

    After few days of the Naira strengthening against the Dollar, at both official and the official and parallel markets, findings show that Dollar is fighting back.

    The naira has weakened for three day running after efforts by the Nigerian central bank to clear a backlog of matured foreign-exchange forward contracts left a number outstanding.

    The naira closed trading on the Investor & Exporter forex window on Thursday at N996.75/$.

    This is a 13.95 per cent decline from the N874.71/$ it closed trading on Wednesday. So far, the naira has lost 27.75 per cent of its value since opening the week at N780.23/$ according to details on FMDQ OTC Securities Exchange.

    So far, the naira has lost about 40 per cent of its value in 2023, earning the tag of one of the worst performing African currencies from the World Bank.

    Recall that the Special Adviser to the President on Economic Matters, Dr Tope Fasua, boasted  that the measure recently being introduced by the Central Bank of Nigeria  will help the Naira achieve N500-N600/$1 in the future.

  • CBN releases operating guidelines for its R200 policy

    CBN releases operating guidelines for its R200 policy

    The Central Bank of Nigeria (CBN), has released guidelines for the operationalisation of its R200 policy.

    Recall that the apex bank recently initiated the R200 policy in an effort to reduce exposure to volatile sources of foreign exchange and to earn more stable and sustainable inflows.

    The policy is aimed at raising 200 billion dollars in Foreign Exchange (FX) earnings from non-oil proceeds over the next five years.

    Ozoemena Nnaji, Director of Trade and Exchange Department of the CBN, in a circular on Monday, said that a major anchor of the programme was the Non-Oil Export proceeds repatriation Rebate Scheme.

    Nnaji said that the rebate scheme was designed to incentivise exporters in the non-oil export sector to encourage repatriation and sale of export proceeds into the FX Market.

    She said that only exporters of finished and semi-finished goods were eligible for the incentive.

    “It is borne out of the need to develop new strategies aimed at earning more stable and sustainable inflows of FX, in order to insulate the Nigerian economy from shocks and FX shortages.

    “Exporters shall qualify for the rebates only where repatriated export proceeds are sold at the Investors’ and Exporters’ (I&E) Window.

    “Eligible transactions that qualify for incentives under the Scheme shall be Export of finished and semi-finished goods wholly or partly processed or manufactured in Nigeria,” she said.

    The director listed registration with Corporate Affairs Commission (CAC) and Nigeria Export Promotion Council (NEPC), and sale of repatriated export proceeds at the I & E window as part of the guidelines.

    She said that the guidelines would be subject to review from time to time as may be deemed necessary by the CBN.

  • Fidelity Bank Reaffirms Support For CBN’s New FX Policy Push, Targets Improved Diaspora Remittance Inflows

    Fidelity Bank Reaffirms Support For CBN’s New FX Policy Push, Targets Improved Diaspora Remittance Inflows

    Fidelity Bank Plc, a leading Nigerian bank has restated its readiness to continually support the Central Bank of Nigeria’s (CBN) efforts to engender sustainable economic development by significantly improving diaspora remittances and foreign exchange (FX) inflows into the country.

    Fidelity Bank CEO, Mrs. Nneka Onyeali-Ikpe who made this known on Saturday at the inaugural edition of the Fidelity Diaspora Webinar Series in Lagos stated that the bank would leverage its robust digital infrastructure, bespoke product offerings and extensive partnership with International Money Transfer Operators (IMTOs) to strengthen remittances inflows.

    While applauding the regulator of the financial services industry for its well-timed interventions in the FX market, Mrs. Onyeali-Ikpe stated the virtual event was part of concerted efforts to deepen engagement with Nigerian citizens’ resident abroad, providing them greater clarity on recent policy measures by the CBN and its attendant implications for diaspora investments.

    “We are here today to discuss modalities of Diaspora Remittance as well as awareness of investment opportunities in Nigeria. We believe when people are armed with adequate knowledge, they will be able to make informed decisions”, she explained.

    Shedding light on the investment opportunities available in the country such as fixed income securities, private equity prospects in companies, modernized agriculture, urban and infrastructure renewal projects, amongst others, she pointed out that many Nigerians in the Diaspora are taking advantage of the bank’s Diaspora Mortgage product to acquire homes in Nigeria.

    “As an innovative bank, our digital link on several IMTO sites ensures that Nigerians in diaspora can open both Naira and domiciliary accounts in 10 minutes and remit funds to Nigeria. Our Private Banking team can handhold interested persons for mortgage to avoid scams,” she explained.

    Themed ‘The New CBN FX Policy and Positive Impact to Diaspora Investments in Nigeria’, the session had in attendance notable professionals including Nigeria’s Vice President, Prof. Yemi Osinbajo; Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, who delivered a keynote address; and the Chairman/CEO, Nigerians in Diaspora Commission (NIDCOM), Honorable Abike Dabiri-Erewa.

    Other eminent personalities include the Chairman/President of African Export-Import Bank, Prof. Benedict Okey Oramah; Lead Faculty, Tekedia Institute, Prof. Ndubuisi Ekekwe; renowned Neurosurgeon and Chairman of RNZ Global, Prof. Olawale Sulaiman; founder, and chairman of BEN Television, Alistair Soyode, among others. Ekweke, Sulaiman and Soyode all participated in the panel session where they shared their wealth of knowledge and experience with attendees.

    On his part, Vice President Osinbajo commended the bank for the webinar session and reaffirmed his confidence in new CBN FX policy. According to him, the policy would aid more investment from Nigerians living abroad. The Vice President, who was represented by Executive Secretary/Chief Executive Officer, Nigerian Investment Promotion Commission (NIPC), Ms. Yewande Sadiku, said, “Nigerians in diaspora represent an indomitable force, they are flag bearers of Nigeria’s image, Nigeria entrepreneurial energy and Nigeria’s incredible can-do attitude.

    “For several years, the remittances from Nigerians in diaspora exceeded Nigeria’s oil revenues, which translated sometimes as high as six per cent of GDP. We are interested in understanding exactly how to translate this potential to investments,” he added.

    In his keynote address, Mr. Emefiele extended his appreciation to the bank for providing a platform to discuss broad issues affecting the CBN’s new FX policy. Emefiele highlighted the benefits of the newly introduced “CBN Naira 4 Dollar Scheme,” an initiative aimed at incentivising senders and recipients of international money transfers.

    The CBN governor explained that the new policy was expected to attract diaspora remittances through the official foreign exchange channels as well as support forex stability in Nigeria. Speaking at the webinar, Oramah commended the CBN governor for the reforms taking place regarding diaspora remittances. He suggested ways to boost diaspora participation in the Nigerian economy through specialised funds and accounts that would encourage them to save their long-term funds in Nigeria.

     

    Lauding Fidelity Bank for the webinar series, Oramah said, “Africans and Nigerians can consider allowing special diaspora foreign currency accounts with higher interest rates than the US or Europe and with an inbuilt guarantee against potential losses from bank failures and country risks.”

  • Telcos pressure NCC revisits suspended Data Floor Price

    Telcos pressure NCC revisits suspended Data Floor Price

    Telecommunications operators have urged Nigerian Communications Commission (NCC) to as a matter of urgency revisit the suspended data floor price in order to save them from distress.

    Data Floor Plan Price is a partial price control measure, which is the lower limit price to check unhealthy but foster healthy competition among players.

    The price floor is a means of controlling anti-competitive behaviours by operators considered to have attained the dominant status in the industry.

    Engr. Gbenga Adebayo, chairman Association of Licensed Telecommunications Operators of Nigeria (ALTON) stated this at breakfast meeting organized by the Nigeria Information Technology Reporters’ Association (NITRA), in Lagos, at the weekend

    He explained that floor price is a partial price control measure, which is the lower limit price to check unhealthy but foster healthy competition among players.

    “The price floor is a means of controlling anti-competitive behaviours by operators considered to have attained the dominant status in the industry. Earlier, there was a limit to how low ISPs could charge for data services, the regulator in October 2015, approved the removal of data floor price, giving internet service providers opportunity to drop their data prices as low as they can in order to survive.”

    He added: “before then, NCC had set the data floor price limit as a way of ensuring smaller ISPs and ‘upcoming’ telcos had the chance to compete with the bigger, already established ones. The ISPs could compete for customers with low prices. This has now come to hurt the industry very badly, as the smaller operators are finding difficult in a recessed economy to survive due to the ‘heavy weight of the bigger players who are able to cross-subsidize the array of services they offer.”

    According to him, ‘statistics available has shown that bigger players lost some market share when the floor price was set and smaller operators got some space in the market place.

    The Internet service providers have been badly hurt by none determination of a floor price as they are left to compete at prices below their costs.’

    He noted that demand for data have increased in recent times following a rapid growth of mobile phone subscribers in the country as there has been an influx of smartphones and other data consuming gadgets into the Nigerian market in recent years.

    “The social media Over the Top (OTT) like the Facebook, Whatapp, Instagram, etc have taken over the voice revenues. The activities of the social media operators have greatly eroded the revenue of the legacy operators. The industry is going through a lot of challenges; it is now inevitable for the NCC to review the Data Floor Price that was suspended. This is necessary to save the industry. Mobile data revenue is growing while the growth of mobile voice revenue is declining.”

    “More subscribers are dropping the voice call to embrace the OTT operations which are offered free of charge on data services. Since the OTT operators do not have any regulatory obligations, no taxes and no operational levy, there is the need to revisit the suspended Data Floor Price in order to save the telecom industry.”

    Adebayo also decried the challenge operators are facing in purchasing foreign exchange to fulfil their contractual obligations to equipment suppliers and foreign vendors.

    “This situation is adversely impacting our network operations and also some recent developments in the industry have alluded very clearly to the risks at hand. The prevailing scarcity of FX has occasioned a situation where the Banks are unable to obtain FX for an upward period of six months.”