TheNewsGuru

Tag: Naira

  • Gov Obaseki’s aide under fire for N500

    Gov Obaseki’s aide under fire for N500

    Godwin Obinyan, a senior special assistant on social media to Governor Godwin Obaseki has come under fire over a tweet he made about being able to feed with just N500.

    Nigerians on Twitter dragged the Governor’s social media aide, describing him as insensitive and distanced from the plight of the ordinary Nigerian.

    Obinyan said with N500 he would be able to eat N200 rice, N100 beans and N200 assorted meat but that with $1 he can never do it in America.

    “How is he comparing what N500 does in Nigeria to what $1 does in America? Why can’t he compare N1 with $1? Like how do they become SA to Governor?” one Twitter user queried.

    Following criticism of the social media aide, he tried to expatiate his claim, saying, “purchasing power is what you evaluate and not the exchange rate”.

    https://twitter.com/Ody_johnson/status/1334260425546985472?s=19

  • I almost cried today when I changed Naira to Dollars – Davido

    I almost cried today when I changed Naira to Dollars – Davido

    Nigerian superstar singer, David Adeleke, popularly called Davido, has expressed his frustration with the rising dollar rate in Nigeria.

    The Fem singer took to his Twitter account to lament, saying that he almost cried when he changed dollars to naira.

    Davido, who is known for wealth and influence on social media, once said he had made a lot of money and he was tired of making money in a video.

    However, in his tweet today, the singer stated that he almost cried when he changed his dollars to naira at the rate of N500 to a dollar.

    The foreign exchange crisis in the country has generated concerns in recent weeks, with the pressure on the naira at the parallel market, despite the assurances by the Central Bank of Nigeria.

    The parallel market had responded to the fresh devaluation of the naira amidst growing foreign exchange illiquidity. The local currency weakened to N500/$ at the black market over the weekend.

    The Central Bank of Nigeria had adjusted the value of the naira by N6 against the dollar on Friday. That was the third time the naira would be officially devalued this year.

    In a weekly exchange rate for disbursement of proceeds of International Money Transfer Service Operators issued on Friday, market dealers, including bureau de change players and service providers, were advised to add N6 to existing rates.

  • Naira continues to decline against dollar across markets

    Naira continues to decline against dollar across markets

    THE naira depreciated against the dollar across the official and parallel markets yesterday with many pundits predicting further decline of the national currency.

    At the official Investors and Exporters (I & E) Window, naira declined by 2.0 per cent to N393.25 per dollar, dropping from previous position of N385.50 per dollar. Most participants at the I & E window maintained bids between N382.00 and N394.83 per dollar.

    At the parallel market, naira depreciated by 0.8 per cent to N487.00 per dollar.

    Senior Research Analyst, FXTM, Lukman Otunuga said the naira was poised to decline further as the Central Bank of Nigeria (CBN) has limited capacity to sustain its restrictive foreign exchange (forex) management.

    “Although the Central Bank of Nigeria has devalued the Naira by 20 per cent in 2020 in an effort to unify its exchange rates, the naira could be poised to decline further as falling reserves complicate the Central Bank of Nigeria’s (CBN) efforts in defending the local currency,” Otunuga said.

    He said Nigeria’s economic picture remains clouded by external and domestic risks noting that while dollar shortages continue to punish the private sector, rising inflationary pressures amid border closures and COVID-19 related disruptions have hit consumers.

    He explained the negative impact of the decline in crude oil price and production on the Nigerian economy, pointing out that while crude oil contributes less than 10 per cent of the Gross Domestic Product (GDP), it accounts for some 90 per cent of foreign exchange earnings and half of government revenues.

    According to him, Nigerian economic situation was compounded by its dependence on oil revenue. As oil production fell to 1.67 million barrels a day amid OPEC supply cuts and prices struggled to break away from the sticky $40 level, export earnings evaporated.

    “Essentially, the collapse in oil prices in the wake of the pandemic has drained government coffers,” Otunuga said.

    He noted that the current rate at the parallel markets was the weakest level in more than six weeks as CBN’s intervention in the official window failed to meet demand.

  • Nigeria’s Naira declines to lowest level in weeks

    Nigeria’s Naira declines to lowest level in weeks

    Nigeria’s currency, the Naira closed the week, falling to its weakest level in six weeks as Central Bank of Nigeria interventions failed to save it against battering by US Dollar.

    On Friday, the Naira exchanged for between N460 and N470 per dollar, at the parallel market, the lowest since September 29, ngnrates.com and abokifx.com, reported.

    Rates at the BDC were only slightly better: the exchange rate was N455/N468.

    However, the Central Bank offered the dollar at 382.10 per dollar on the spot market, where it sells limited amounts of the greenback bank to importers.

    In early October, the Naira strengthened to N440 to a dollar in the unofficial market.

    This coincided with when the CBN began weekly interventions in late September, after Nigeria opened up international travel following the lifting of Covid-19 restrictions.

    But all the gains have vanished, as pent up demands for dollar chased the little available.

    The money available in the official window is insufficient to meet demand, Julius Tayo-Olufemi, chief executive officer of Cephas Grace International Ltd., which imports home appliances, told Bloomberg by phone.

    “On a monthly basis, I need about $100,000 to $150,000 and the maximum I can get at the controlled price is $20,000. So I have to sort out the remaining balance myself,” Tayo-Olufemi said.

    The regulator has always increased intervention sales to money changers, but “they are a bit hampered this time around,” said Omotola Abimbola, analyst at Chapel Hill Denham.

  • Naira exchanges N460 to dollar on parallel market

    Naira exchanges N460 to dollar on parallel market

    THE naira on Monday fell by 1.09 per cent to N460 on the parallel market. The naira decline followed President Muhammadu‘s directive to the Central Bank of Nigeria (CBN) to stop dollar sales for food and fertiliser imports.

    On the official market supported by the CBN, the naira traded at N381 to the dollar, while it was quoted at N385.83 naira on the spot market yesterday.

    Buhari last Thursday directed the CBN to stop selling foreign exchange for those imports, similar to an order issued last year.

    Nigeria faces its worst economic crisis in four decades triggered by an oil price crash induced by the novel coronavirus pandemic. The crisis has slashed government revenue, weakened the currency and created large financing gap for the economy.

    Read Also: Naira loses against dollar at the parallel market
    A trader attributed the high dollar demand in the parallel market to importers who have to make payments to bring in goods for end-of-year sales.

    The naira had firmed sharply two weeks ago on the parallel market after the CBN resumed dollar sales to individuals and investors to clear their demand.

    But sales have not being enough, traders say, with pressure piling up on the currency. Nigeria has spent 16.6 per cent of its dollar reserve from last year to $35.77 billion.

    Dollar liquidity dried up on the spot market after foreign investors dumped Nigerian assets following the oil price crash. However, CBN’s forex sales has also been inadequate.

  • Naira crashes, exchanges for N440/$

    Naira crashes, exchanges for N440/$

    The naira exchanged to the dollars for N440 in the parallel market on Thursday, despite the resumption of forex sales to the Bureau de Change Operators on Monday.

    The naira had last week dropped from N480/$ to N420/$, following the Central Bank of Nigeria’s announcement to resume forex sales to the BDCs.

    In a circular by the CBN, it stated that, “As part of efforts to enhance accessibility to foreign exchange particularly to travellers following the announcement of limited resumption of international flights by the Honourable Minister of Aviation, commencing with Abuja and Lagos, the Central Bank of Nigeria hereby wishes to inform the general public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from September 07, 2020.

    “Consequently, purchase of foreign exchange by BDCs shall be on Mondays and Wednesdays in the first instance.

    “The BDCs are to ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays accordingly.”

    The Director, Corporate Communications Department at the CBN, Isaac Okorafor, had earlier, assured that those requiring foreign exchange for purposes of travel, educational fees and other invisibles could obtain such over the counter from their respective banks.

    On Monday’s forex sales resumption, about 5,180 BDCs got $10,000 each, making a total of $51.8m.

  • Naira further strengthens againsts dollar amid CBN’s intervention

    Naira further strengthens againsts dollar amid CBN’s intervention

    The naira strengthened to N435 to a dollar at the parallel market yesterday as against about N480 to a dollar it had been trading in the past days.

    This showed a gain of N45, representing about 9.3 per cent rise.

    Currency dealers attributed the development to the planned resumption of forex sales by the Central Bank of Nigeria (CBN) to operators of Bureau De Change (BDC), which according to them is expected to bolster dollar liquidity in the market.

    The apex bank is expected to resume forex sales to BDCs on Monday

    It had announced its intention to resume forex sales to the retail segment of the market, but was forced to postpone it because of the extension of the date for resumption of international flights to September 5.

    Speaking yesterday with journalists, the President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said the announcement of the plan to resume forex sales to the currency dealers was the major factor that led to the gain recorded by the nation’s currency against the greenback.

    He said: “The plan to resume forex sales to BDCs was what broke the camel’s back. Dollar supply to BDCs is a potent weapon to fight against speculation. For those still speculating in the market, they are already burning their fingers and taking losses.
    “So, my advice is that when you don’t have a genuine and effective need to use dollars, stop stockpiling the currency. From what we are seeing, this trajectory is going to continue and I advise members of the public to always buy when you have a purpose for it and not buying to keep.

    “What we saw in the market in the past few weeks was not a true reflection of the value of the naira against the dollar. We saw, even during the lockdown when flights were not flying, everybody literally became a forex dealer. It is unfortunate. That cannot happen in other countries. When you don’t need to make payments abroad, what are you hoarding dollars for? It’s unfortunate.”
    He expressed optimism that once his members re-commence business by Monday, the naira exchange rate at the parallel market would improve further.

    “With just a pronouncement, you can see the impact. So, once we are back, we expect the naira to appreciate further,” he added.
    The currency dealer foresees the naira strengthening further to “between N415 to N420 to a dollar next week,” saying “the trajectory is expected to continue towards the unified rate of the BDC and Investors and Exporters window, which is about N386 to a dollar.”

    Gwadabe added: “That is the target that all the operators in the forex market, that is the BDCs, the banks, the I & E window, are targeting. So, speculators like I told you would continue to count their losses. This is not the time to hoard, to speculate or even to undermine the dexterity of CBN management.”
    He also urged security agents to check the illegal movement of dollar cash with the resumption of international flights on September 5.

    CBN had in a circular dated August 27, 2020, addressed to all authorised dealers, BDC operators and members of the public, said the resumption of forex sales was part of efforts to enhance accessibility of the greenback, particularly to travellers following the announcement of the limited resumption of international flights.

    Purchase of forex by BDCs shall be on Monday, and Wednesdays in the first instance, it had stated.
    According to the apex bank, BDCs are expected to “ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays accordingly.”

  • Naira depreciated by N24 to N385/$

    Naira depreciated by N24 to N385/$

    Naira depreciated by N24 to close at N385 per dollar on Thursday at the official market. It had exchanged at N361 to a dollar on Wednesday as demand pressure intensified.

    The pressure on the Naira was heightened after news of the Federal Government’s plan to adopt a flexible exchange rate broke.

    The International Monetary Fund (IMF), had consistently advised the Central Bank of Nigeria (CBN) to adopt a flexible exchange rate regime to stop inflation rise.

    The inflation rate, which rose to 12.4 per cent year-on-year in May continued to rise in recent months as the impact of the Covid-19 pandemic reflected on the economy.

    The May inflation rate was 0.06 percent points higher than the rate recorded in April 2020 at 12.34 percent. On a month-on-month basis, the Headline index increased by 1.17 per cent in May 2020, this is 0.15 percent rate higher than the rate recorded in April 2020 at 1.02 percent.

    This was despite the sustained upward pressure on consumer prices as headline inflation rose 1.2 per cent month-on-month from one percent, the highest since June 2018. Notably, core inflation rose faster by 14 basis points to 10.1 percent year-on-year from 10 percent in April 2020, the highest since July 2018.

    However, core inflation increased five basis points, slower at 0.9 per cent on a month-on-month basis, the first moderation since February 2020. Meanwhile, food inflation was little changed at 15.04 per cent year-on-year from 15.03 per cent in the previous month.

  • CBN clears air on alleged Naira devaluation

    The Central Bank of Nigeria has reacted to news it has devalued the Naira by as much as 15 percent, moving it from the official price of N307 to N360 and also adjusting the import and export window price from N360 to N380.

    In a tweet on Saturday night, the bank deployed semantic obfuscation to describe its action, quoting Governor Godwin Emefiele as saying the devaluation “is an adjustment of price”.

    The bank had taken commercial banks by surprise on Friday when it sold dollars at N360, instead of N307.

    Later same day, the bank reflected its ‘new adjusted price’ on its website.

    Recall that the apex bank had on Friday made the adjustment cum devaluation to harmonise its multiple exchange rates and also because of the reality of the oil market, which gives Nigeria 90 per cent of its FX earnings.

    As at Friday, oil sold for $27.50 per barrel as against the budget benchmark of $57.

    Forex Reserve has also gone southwards to $35.9 billion.

  • CBN bows to pressure, technically devalues Naira by 15%

    The Central Bank of Nigeria (CBN) may have finally bowed to immense pressure from various quarters to devalue the Naira.

    Few days ago, there were speculations that the central bank would devalue the local currency, following crash in the prices of crude oil at the global market and steep decline in the foreign reserves.

    This created panic at the currency market and caused the Naira/Dollar exchange rate to shoot as high as N400/$1 at the black market. The value only retreated to N375/$1 at the parallel market on Thursday after the CBN had maintained that it was not going to carry out exchange rate realignment.

    Yesterday, the Presidential Economic Advisory Council held a meeting with President Muhammadu Buhari and he was bluntly told that the current economic situation in the global could force Nigeria to devalue the local currency.

    However, the CBN confirming the development in a memo on Friday evening directed that bureaux de change (BDC) operators in the country must not sell dollars higher than N380 to end users.

    This memo was signed by O.S. Nnaji, director of the apex bank’s trade and exchange department.

    The memo was issued to banks and bureau de change operators.

    TheNewsGuru.com, TNG reports that this is the second time in four years that the apex bank will be adjusting naira to N380/$