TheNewsGuru

Tag: Naira

  • CBN weakens naira to dollar for the first time, now exchanges for N307/$1

    CBN weakens naira to dollar for the first time, now exchanges for N307/$1

    The Central Bank of Nigeria (CBN) on Monday weakened the naira marginally, selling dollars at 307 for the first time on the official interbank market.

    Foreign exchange traders said the development signalled a gradual move to merge the regulator’s multiple exchange rates.

    According to a report by Reuters, the country’s convoluted exchange rate system has been used to manage what the CBN described as “frivolous” demand for dollars at the peak of a currency crisis which began two years ago.

    Nigeria currently has at least five exchange rates including the official rate which the CBN uses for masking pressure on the currency.

    In April the CBN allowed foreign investors to trade the naira at market-determined rate through the establishment of the Investors and Exporters FX window, which has weakened the naira to around 360/dollar.

    The CBN has sold $500,000 almost on daily basis on the official spot market since creating several exchange rates to alleviate dollar shortages.

    However, it had sold the United States currency at rates of between 305 and 306 for months before Monday’s move. ”It’s possible the central bank is working towards a gradual convergence of rates, one trader told Reuters.

    Earlier this month the central bank sold dollars at 306 for the second time after maintaining a level of around 305 on the spot market for two months.

    Dollar shortages gripped the economy as crude sales, Nigeria’s mainstay, plunged at the start of an oil price rout in 2014. That triggered a recession last year and frustrated businesses, which had to find dollars on the black market as a result.

     

  • Naira appreciated by 30 percent against dollar in 10 months

    Naira appreciated by 30 percent against dollar in 10 months

    The naira has appreciated by 30.3 percent since February when the Central Bank of Nigeria began its aggressive interventions at the foreign exchange market, the News Agency of Nigeria reports.

    The Nigerian currency had exchanged at N520 to the dollar at the peak of onslaughts by currency speculators before the CBN started intervening by injecting foreign exchange in the market.

    The CBN injection of over 3.6 billion dollars to meet the demand for foreign exchange which resulted in the convergence of rates at the parallel market and the Bureau De Change segments.

    The apex bank’s intervention led to the current flattening of the rate at 362.5 to the dollar at the parallel market.

    Prof Sheriffdeen Tella, a Senior Economist at the Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said that the CBN interventions were made possible by the increase in the price of oil at the international market.

    Tella said that the crude oil production output of two million barrels per day also meant more money for the nation.

    He, however, said that the recent production cut by the Organisation of Petroleum Exporting Countries to 1.8 million barrels per day might affect the nation’s crude oil earnings.

    He urged the CBN to continue to intervene at the official foreign exchange market to sustain the appreciation of the naira across board.

  • Naira: Scarcity hits Interbank Market as overnight lending rises to 120%

    Naira: Scarcity hits Interbank Market as overnight lending rises to 120%

    There was naira scarcity on the interbank market Tuesday, leading the overnight tenor of the Nigerian Interbank Offered Rate (NIBOR) to close at 120.08 percent.

    The overnight lending had hit 148 per cent on Monday as news of a Federal High Court ex parte order instructing all Nigerian banks to forfeit all monies held in accounts without bank verification numbers (BVNs) to the federal government in 14 days from the date the order was given, filtered into the market.

    Justice Nnamdi Dimgba Igwe had granted the order on October 18, 2017, following an application by the Attorney-General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami (SAN), on behalf of the federal government.

    The banks were asked to show cause why the monies belonging to companies and individuals should not be forfeited to the federal government 14 days from the date the order was given.

    The chief executive of Financial Derivatives Company Limited, Mr. Bismarck Rewane, had warned that the decision by the court would lead to a liquidity squeeze in the market.

    But an analyst at Ecobank Nigeria, Mr. Kunle Ezun, who spoke with THISDAY, attributed the development to the Central Bank of Nigeria’s (CBN) open market operations as well as its sustained Wholesale Secondary Market Intervention Sales (SMIS) auction that requires firms to deposit naira cash before they can purchase dollars.

    Ezun, however, expressed optimism that there will be some easing once the monthly funds from the Federation Accounts Allocation Committee (FAAC) hits the banking system.

    The central bank has kept the benchmark policy rate high in its bid to fight inflation and attract foreign investors. It has also been selling treasury securities almost four times a week to soak up naira liquidity and reduce pressure in the foreign exchange market.

    The Chief Executive of Afrinvest West Africa Limited, Mr. Ike Chioke, noted that while last year the economy witnessed illiquidity in the forex market, this year it has experinced illiquidity position in the naira market.

    “There are now dollars in the market, the exchange rate has stabilised, but people are looking for naira with which to purchase dollars.

    “Some of the central bank’s measures which ensure you put your cash down before you can buy the dollars, were designed to prevent speculators from coming into the forex market to drive the exchange rate to the high heavens.

    “It also frustrates normal businesses where for instance, if this building was a hotel and you feel like expanding to the next compound, traditionally you will take a bank loan to finance the imported equipment to build that extension.

    “But now the banks would not give you the loan until you bring your naira cash upfront. So it frustrates your capacity to grow and that is what we are seeing across many parts of the economy,” he added.

    Traders said the liquidity deficit in the banking system was widening, after hitting N300 billion Tuesday.

  • Naira exchanges for N364/1$ as MPC retains lending rate

    Naira exchanges for N364/1$ as MPC retains lending rate

    The Naira on Tuesday exchanged at N364 to the dollar at the parallel market as the Monetary Policy Committee (MPC) meeting of the CBN holds benchmark interest rate at 14 per cent.

    TheNewsGuru.com reports that the MPC left the benchmark interest rate unchanged at 14 per cent, alongside other monetary policy parameters.

    The CBN Governor, Mr Godwin Emefiele, said reducing interest rates may reverse the gains achieved in exchange rate stability and inflation rate reduction.

    The Pound Sterling and the Euro traded at N492 and N436.

    At the Bureau De Change (BDC) window, the Naira was sold at N362 to the dollar, while the Pound Sterling and the Euro traded at N492 and N436.

    Trading at the investor’s window saw the Naira closed at N306.05 and sold at N305.8 at the CBN official window.

    Traders said the consolidation of the gains recorded in the economy would lead to more stable Naira.

    CBN resolved to consolidate on the gains made in the post-recession economy.

     

     

    NAN

  • Naira depreciates marginally against dollar, exchanges for N365/$1

    Naira depreciates marginally against dollar, exchanges for N365/$1

    The Naira on Thursday depreciated marginally against the dollar at the parallel market, exchanging at N365.5 to the dollar.

    TheNewsGuru.com reports that the Nigerian currency lost 50 kobo from N365 posted on Wednesday, while the Pound Sterling and the Euro closed at N487 and N436.

    At the Bureau De Change (BDC) window, the Naira traded at N362 to the dollar, while the Pound Sterling and the Euro closed at N487 and N436.

    Trading at the investors’ window saw the Nigerian currency closing at N360.33 to the dollar.

    Traders said high demand for the Naira led to its slight depreciation at the market.

    The Naira remained stable for more than five months, exchanging at N365 to the dollar.

    The rise in the nation’s external reserve made the CBN comfortable in its aggressive interventions at the foreign exchange market.

  • Naira remains stable at parallel market, exchanges for N367/1$

    Naira remains stable at parallel market, exchanges for N367/1$

    The Naira on Wednesday remained stable at the parallel market, exchanging between N365 and N367 to the dollar.

    The Pound Sterling and the Euro traded at N476 and N436, respectively.

    At the Bureau De Change (BDC) window, the Naira was sold at N363 to the dollar, while the Pound Sterling and the Euro closed at N476 and N436, respectively.

    Trading at the investors’ window saw the Naira closed at N360.22, while the CBN rate closed at N306 to the dollar.

    Traders at the market said the scarcity of the dollar still remained a challenge.

    The Central Bank of Nigeria (CBN) has earlier given an assurance that its robust foreign exchange policy and its series of interventions at the FOREX market would engender exchange rate stability.

    The apex bank express confidence that with improved economic fundamentals, it believes its policies will support a fledging industrial climate for local production.

    TheNewsGuru.com reports that the CBN had injected over 3.6 billion dollars in series of interventions at the FOREX market.

     

     

     

    NAN

  • CBN injects fresh $250m to lift naira

    CBN injects fresh $250m to lift naira

    The Central Bank of Nigeria on Tuesday injected $250m into the various segments of the inter-bank foreign exchange market, in order to lift the naira against other major currencies.

    Figures obtained from the CBN indicated that the Retail Secondary Market Intervention Sales segment of the market received the highest intervention with a total of $100m, the Small and Medium Enterprises window received a boost of $80m while the invisibles segment, comprising Business/Personal Travel Allowances, school tuition, medicals, among others was allocated the sum of $70m to meet the demands of customers.

    The bank’s spokesman, Isaac Okorafor, noted that the second quarter report by the National Bureau of Statistics indicated that Nigeria had gotten out of recession.

    While hinging part of the success to the regular intervention of the CBN in the forex market to boost liquidity in the market, Okorafor said the timely execution and settlement for eligible transactions as well as the forex available to the real sector and industrial capacities were factors that boosted the economy.

    He recalled that the CBN Governor, Mr. Godwin Emefiele, had a few months ago predicted that the Nigerian economy would be out of recession at the end of the third quarter.

    The CBN reportedly injected $297m into the Retail Secondary Market Intervention Sales segment, raising the total intervention for the week to the sum of $547m.

  • Naira appreciates against dollar, exchanges for N364/$1

    Naira appreciates against dollar, exchanges for N364/$1

    The Naira on Tuesday appreciated against the dollar at the parallel market.

    The Nigerian currency gained N1 to exchange at N364 to the dollar, stronger than N365 posted on Friday, while the Pound Sterling and the Euro closed at N470 and N430.

    Trading at the Bureau De change (BDC) window saw the Naira closing at N362 to the dollar, while the Pound Sterling and the Euro traded at N470 and N430.

    At the investors’ window, the Naira was sold at N360.39 to the dollar, while it exchanged at N305.8 to the dollar at the interbank market.

    Traders said that activities at the market was yet to resume fully as most traders were yet to come back from the Sallah break.

     

    NAN

     

  • Naira gains slightly against dollar, exchanges for N365/$1

    Naira gains slightly against dollar, exchanges for N365/$1

    The Naira on Tuesday, appreciated against the dollar at the parallel market.

    The Nigerian currency gained N2 to exchange at N365 to the dollar, stronger than N367 posted on Monday while the Pound Sterling and the Euro closed at N475 and N433.

    Trading at the Bureau De change (BDC) window saw the Naira closing at N362 to the dollar, while the Pound Sterling and the Euro traded at N473 and N433, respectively.

    At the investors’ window, the Naira was sold at N359.67 to the dollar, while it exchanged at N305.8 to the dollar at the interbank market.

    Traders said patronage was low at the parallel market.

    The News Agency of Nigeria (NAN) reports BDCs got the weekly foreign exchange auction from the CBN.

     

     

    NAN

  • Naira depreciates further against dollar, exchanges for N368/$1

    Naira depreciates further against dollar, exchanges for N368/$1

    The Nigerian currency, naira on Thursday continued to crash against the dollar at the parallel market.

    The currency lost one point to exchange at N368, weaker than N367 posted on Wednesday, while the Pound Sterling and the Euro closed at N478 and N432.

    At the Bureau De Change (BDC) window, the naira was sold at N363 to the dollar, while the Pound Sterling and the Euro closed at N478 and N432.

    However, the naira moved up at the investors’ window, exchanging at N361.17 stronger than N362.39.

    Traders at the market told newsmen that in spite of the weekly auction of foreign exchange by the Central Bank of Nigeria (CBN) to BDC, the naira continued to fall drastically.