The Naira continued to regain strength and appreciate in value in the parallel market on Tuesday as it was sold for N425 to a dollar.
A survey by the News Agency of Nigeria (NAN) on Tuesday in Abuja revealed that Bureau De Change (BDC) operators bought at the rate of N415 and sold at N425.
For the inter-bank rate, the dollar exchanged for N331.6, Euro 335.75, while the pound exchanged for N394.25.
Source: NAN
The Nigerian naira on Thursday recovered to N490 per dollar, as the fresh policy action from the Central Bank of Nigeria finds its foothold.
A bureau de change operator, who spoke to TheCable in Lagos, said the naira recovered drastically from 515 per dollar on Wednesday, to 490 on Thursday morning.
Ibrahim Baba, a trader in Abuja, the nation’s capital, said the local currency is trading 498 to the greenback at the Federal Capital Territory (FCT).
On Monday, the CBN introduced a new policy action, which mandates banks to open sales point at major airports across the country, in a bid to halt forex scarcity for travellers.
“In order to further ease the burden of travellers and ensure that transactions are settled at much more competitive exchange rates, the CBN hereby directs all banks to open FX retail outlets at major airports as soon as logistics permit,” CBN said.
The CBN, in its guidelines for the new policy, revealed that every Nigerian, 18 years or older, can access $16,000 per year for personal travels, and $15,000 per term for school fees.
About 24 hours after the CBN unveiled the policy, the bank went on to inject $370.9 million into the interbank foreign exchange market.
The policy action has also seen the pound sterling and euro, fall at the parallel market to N615 and N505 respectively.
Worried by the continued widening gap between the inter-bank foreign exchange and parallel market rates, the National Economic Council, NEC, on Thursday demanded the immediate review of the current foreign exchange policy by the Central Bank of Nigeria.
Nasarawa State Governor, Tanko Al Makura, who briefed journalists at the end of the meeting in Abuja said the Council, presided by acting President Yemi Osinbajo, expressed serious concern over the current situation of the exchange rate, especially the gap between inter-bank and the parallel market rates.
The council therefore called on the CBN Governor, Godwin Emefiele, to do something immediately.
The National Economic Council has as members governors of the 36 states, as well as CBN governor. It is headed by the vice president.
Prior to the introduction the flexible foreign exchange policy June last year, the exchange rate for Naira stood within a band of N197 and N199 to the dollar.
But, the removal of the exchange band, which was expected to increase supply of the dollar and help the nation’s weak economy, lessened government controls on the exchange rate.
While the government retained partial control at interbank and BDC rates, while the parallel market rate spiraled over the past months.
Since then the gap between the interbank (the official rate) and parallel market rates has been widening, raising concerns.
While the interbank rate stood at N280 to the dollar on the first day of the unveiling of the policy by the CBN, the parallel market rate was as high as N310 to the dollar.
Since then, the rate has been on the upswing, with interbank rate standing at about N305.50 to the dollar on Thursday, against the parallel rate of N510 to the dollar.
However, the CBN Governor at the meeting pleaded for patience and understanding, assuring that the situation was being closely managed.
During the Monetary Policy Committee meeting in January, Mr. Emefiele had said despite claims that there were almost seven different exchange rates in the country, the only rate recognised by CBN was the official inter-bank rate.
No query
Meanwhile, following reports that the bank was queried by the Attorney General of the Federation and Minister of Justice over issues relating to the sale of foreign exchange, its spokesperson, Isaac Okorafor, denied that neither the CBN governor nor the Director, Legal Services Department had received any communication to that effect.
Mr. Okorafor said as a responsible and responsive arm of government, the CBN would “always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned.”
He said CBN had no direct dealings with any bank customer on foreign exchange transactions, pointing out that such transactions were always consummated strictly between the customers and their respective deposit money banks.
The figures of foreign exchange sold, he explained, had always been published in national dailies or on its arguing that transactions referred to in the publication were those between the banks and their customers.
Consequently, the CBN directed banks to ensure that henceforth returns on foreign exchange allocations in third currencies, such as Japanese Yen and South African Rand, Euros, Dollars should be reported in a new format approved by the CBN.
“The CBN has directed ALL Deposit Money Banks to render their returns in a uniform format converting all forex sales and purchases to NGN/USD. All third currency transactions are also to be converted to NGN/USD,” Mr. Okorafor said.
The naira took a fall again on Monday, as it slid to 485 against the dollar and 600 against the British pound at the parallel market.
At the official side of the market, the naira depreciated from 305 to 315 per dollar, while the pound went for N401.
This is coming at a time when the Central Bank of Nigeria (CBN) is making special forex auction for oil exporters in the country.
With the oil prices on the rise at the global market, and Nigeria’s oil template at N285/$1, the interbank market is seen as incapable of meeting the needs of oil exporters who need forex at N285/$1 not the market’s N315/$1.
This has necessitated the CBN auction, which is expected to trade dollars below N300.
Vice-President Yemi Osinbajo, in an interview with Reuters, said “his office was working with the central bank to make the foreign exchange market more flexible and more reflective of actual demand and supply”.
This year has seen the local currency depreciated the most in its 43-year history, opening at 197 in January at the official market and 265 at the parallel market.
Oil prices rose on Tuesday, helped by a weaker U.S. dollar and as several analysts said that global markets might not be as oversupplied as flagged by others ahead of a November meeting of OPEC producers that could decide to cut crude production.
The proposal by the Organization of the Petroleum Exporting Countries made at the end of last month to cut or cap production has helped to lift crude prices above $50, but not much more because of market participants’ doubts over the cartel’s ability to strike and implement a concrete deal.
But several analysts have now said that a two-year global supply glut could be receding when oil inventories are taken into account. They say that stocks are not as high as usual ahead of the winter fuels season.
Brent crude LCOc1 rose 43 cents, or 0.8 percent, to $51.95 a barrel by 0830 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 was up 49 cents, close to 1 percent, at $50.43.
Traders said a drop in the dollar away from seven-month highs the previous day .DXY supported crude. A lower dollar makes fuel purchases cheaper for countries using other currencies domestically.
Analysts at Bernstein Energy said that beyond estimating production and consumption, one way to gauge the supply and demand balance is to analyze fuel inventory changes.
“Global oil inventories (industry and government) increased by 17 million barrels to 5.618 billion barrels in 3Q16. This is the smallest build since 4Q14, confirming that inventory builds are slowing as the market comes back into balance,” it said.
Read More: reuters
The Naira plummeted further on Tuesday as demand outweigh supply.
The local currency which traded at N445 to the US dollar on Monday slid to N452 at the parallel market on Tuesday.
While on the interbank market, the Naira depreciated to N312 against the dollar from the N308 it was traded on Monday.
Experts have said the current rate is not a true reflection of the Naira value, and attributed the development to the activities of speculators.
Some traders have expressed optimism that once Travelex finalize its arrangement to sell directly to Bureau de Change Operators (BDCs), the Naira will rebound.
While others have said the continuous ban of the importers of 41 items contributed to the current situation as they are also sourcing for the dollar to import for the normal end of year sales.
The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe said it will take Travelex few days to process biometric registration and funding of BDCs accounts.
Harrison Owoh, a bureau de change operator expressed his delight at the Travelex move by the central bank and called on other bureau de change operators to key into the new Travelex arrangement by registering on Travel biometrics.
A foreign exchange research analyst at Investors King Ltd., Samed Olukoya said “Normally, the announcement of Travelex arrival to the Bureau de Change segment would have halted further decline of the Naira, but with the present situation the central bank would have to do more.”
The naira fell to an all-time low of N436 to the dollar on the parallel market yesterday, as against N428 to the dollar from the previous day, as the perennial scarcity of the greenback in the market took a turn for the worse.
The effect of the dollar shortage was also felt on the interbank FX market where the spot rate of the naira also depreciated to N313.07 to the dollar Thursday, from N310.08 to a dollar the previous day.
This is just as Nigeria’s external reserves fell further to $24.759 billion as of September 21, 2016.
The situation on the parallel market was attributed to the refusal by banks to sell dollars to Bureau de Change (BDC) operators.
The President, Association of Bureau de Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, said none of his members were able to access dollars from banks as directed by the Central Bank of Nigeria (CBN).
“As I speak to you, no BDC has been able to access FX since Monday. It is very unfortunate that the liquidity in the market has dried up. That is too bad for the market,” the ABCON boss said in a phone chat.
Read More: thisdaylive
Banks accused of not remitting the $2.3 billion belonging to the Federal Government into the Treasury Single Account (TSA) have alleged a cover-up by the Central Bank of Nigeria (CBN).
They alleged that the apex bank is shielding some of their peers, which they claim are equally guilty of the same offence.
The affected banks, which have been banned from further foreign exchange transactions, include United Bank for Africa (UBA), $530million; First Bank of Nigeria (FBN), $469million; Diamond Bank Plc, $287million; Sterling Bank Plc, $269million; Skye Bank Plc, $221million; Fidelity Bank, $209million; Keystone Bank, $139million; First City Monument Bank, (FCMB) $125million; and Heritage Bank, $85million.
According to a source from one of the indicted banks, there are at least six others that the authorities are shielding. According to him, those banks were also present when the parties first negotiated the terms of repayment last year and earlier this year.
The source says there is no way banks can have possession of such an amount, no matter who owns the money, and not spend it. “The problem is that the foreign exchange (forex) challenges caught up with it and that is why it is open now.”
The source said that almost all the banks’ chiefs were on their way for an emergency meeting with officials of the CBN.
In its reaction to the ban, UBA stated that it had “completely remitted all NNPC, NLNG dollar deposits.” The bank claimed yesterday that it had been readmitted into the forex market by the CBN following remittance of all NNPC, NLNG dollar deposits.
Diamond Bank Plc, in a message to stakeholders, rationalised the punishment for refusal to remit the government’s fund as industry-wide, while it is currently engaging the regulator to resolve it.
A source from Fidelity Bank said the status of the funds in its possession was well reported to CBN, including the agreed timeline for its remittance to the TSA.
The source also affirmed that the repayment plans had always been complied with, even before the takeoff of the TSA and remained ongoing before CBN placed the ban on the bank.
It noted that if there was any change in remittance plans, it was because NNPC had invited banks earlier this year, where they were asked to submit a revised repayment plan for the balance of the funds.
First Bank also said that the now controversial dollar accounts belonging to the NNPC were fully disclosed to the CBN, and were being operated in line with the regulatory requirements.
It said that a tripartite documented discussion had been ongoing among the CBN, NNPC and the bank, on the need for domestic retention of those balances as part of measures to ameliorate challenges posed by the lack of foreign exchange, and customer’s inability to source it for their trade finance obligations to the bank.
Reiterating that the non-remittance of funds to the TSA “is actually a widespread industry issue,” FCMB, in a statement yesterday, clarified that the ban on future forex transactions was based on its “non-transfer of the remaining $125million of NNPC fund with us to TSA.”
Meanwhile, the CBN’s action is already taking its toll on the banking stocks, as shares of the affected banks have plunged significantly.
At the close of transactions yesterday, the demand for banking stocks reduced significantly with a free fall in the share prices. For instance, shares in Diamond Bank fell the most, shedding 8.94 percent to close at N1.12 per share from N1.23.00 at which it opened for the day’s transactions. FCMB followed, shedding five per cent to close at N1.14 per share.
Sterling Bank dropped 2.91 per cent to close at N1.00 per share. Access Bank depreciated by 2.59 per cent to close at N5.65 per share. United Bank for Africa lost 1.55 per cent to close at N4.46 per share, just ass Skye Bank shed 1.54 per cent to close at N0.64 per share from initial N0.65.00.
Also, Zenith Bank lost 1.08 per cent to close at N15.59 per share while Fidelity Bank dropped 0.99 per cent to close at N1.00 per share. FBN Holdings also lost 0.32 per cent to close at N3.16 per share.
The dollar dropped Thursday as records from the Federal Reserve’s last meeting dampened hopes of an imminent US interest rate hike.
Minutes from the US central bank’s July gathering said policymakers were keeping their “options open” but remained divided on the threat of inflation.
A hike in US borrowing costs would tend to lift the dollar by stirring demand for dollar-denominated assets, so Wednesday’s minutes weighed on the unit.
The news comes after William Dudley, the influential head of the Federal Reserve’s New York branch, unexpectedly hinted this week that a rate hike was possible as early as September.
“The message appears to be that as much as a September hike is a possibility, the Fed is unlikely to move until there is a consensus on the outlook for growth, hiring and inflation,” Rodrigo Catril, a currency strategist at National Australia Bank, said in a commentary.
“Recent data would therefore suggest a hike is not imminent.”
The dollar fell as low as 99.65 yen from 100.28 yen Wednesday in New York, before creeping back above the 100 yen level in afternoon trading.
Read More:
http://guardian.ng/business-services/dollar-drops-after-federal-reserve-meeting/
The Naira on Monday, traded at N322 to a dollar at the parallel market in Lagos. The currency was stable in the previous week, maintaining value of between N315 and N320 to a dollar.
However, the naira traded at N450 and N360 for Pound Sterling and the Euro respectively, at the day’s transaction.
The naira also maintained N197 at the official Central Bank of Nigeria (CBN) rate. Traders at the parallel market said that the proposed currency swap deal between Nigeria and China would shore up the value of the naira when implemented.
Credit: vanguardngr
During the week I had the opportunity of meeting a top player in one of Nigeria’s foremost financial institutions. Of course before now I had always met several people with whom I’ll discuss several things some bothering on politics, others on religion, business, international affairs, security and so on. However I considered my meeting with this fellow a remarkable one; although it didn’t appear so while we were chatting until much later in the day when laid down to reflect on all that had happened throughout that day, including this meeting. As expected we started on a casual note of exchanging pleasantries and asking after the well-being of each other’s family, then to the everyday issues which make the rounds and touch on the areas I had earlier mentioned above. We talked about all these before getting on the issue which concerns him most, our currency. Yes! The naira. At this point his countenance changed to a mixture of mild aggression and sympathy. I could create an excuse for his mild aggression as with some Nigerians who talk about the current state of the naira, but was left somewhat bewildered wondering the place of sympathy in what he was saying. It was much later when I flashed back on all that had happened while with him that it dawned on me that indeed “there’s fire on the mountain”.
While we were having the chat during the day he said to me “Kingsley hold it a minute, what do you really think is the cause of this emaciating state of the naira?” Of course I tried to give a possible reason, while still adding other factors as supporting points when he held my hand as though demanding of me to pause and hear him out and then said to me ”my brother the demand for these foreign currencies is just too much and naturally when demand of a thing is higher than supply the cost of such commodity goes up, that’s exactly what I’m saying”. In line with my knowledge of the economics of demand and supply I immediately understood what he was talking about. It is in line with this statement and what I gave to him as a response that this whole essay will be based. It is to say the least phenomenal that in about a year the value over the naira of a major currency for Nigeria’s foreign exchange which is the dollar has risen about twice what it used to be. Within the last three months however the spate at which the same currency has risen may best be described as outrageous. While some have resorted to calling the governor of the Central bank, Minister of Finance, Minister of budget and national planning and even the President all sorts of names, it is ideal that before these aspersions are made or while people continue with them it will be logical to examine the underlying and general cause of the continued decline of the naira.
The average Nigerian is a lover of imported “stuff”. So it is usually not perceived as being out of place when people prefer things from the US, Japan, Dubai, UK, China and even South Africa to those from Nigeria. Come to think of it from the services rendered by multinationals to the most infinitesimal things we buy for ourselves, they must all be imported, “sent” or shipped in. I was on my way home a couple of weeks ago when I saw a Sports Utility Vehicle (SUV) whole manufactured by a Nigerian company, I told my friend about the vehicle and as you’d expect he rebuked the vehicle saying in pidgin English “you sure say person fit drive dat moto sef”! I stood in utter consternation because I expected at least the smallest word of encouragement to the indigenous company that manufactured the vehicle but then I understood his position as being a microcosmic part of that which can be gotten from the Nigerian society. Very often companies and individuals request replacements for their fleet but not for once have I seen a vehicle from this Nigerian Vehicle company in their fleet because we either want to drive a Toyota, Honda, Nissan or ………
Till this day we are yet to develop an indigenous electronics manufacturing company for home appliances and other heavy duty machines. So that means owning a LED television made by Sony, Samsung or LG makes you a “big boy” and buying a Yamaha, Suzuki, Mikano or Tiger generator set makes you a “Chairman”. In fact these days we know how rich you are from the size of generator in your house. That means owning a generator set is a way of life; what is different is the type you own. Can you imagine that! Some even justify this menace of generator ownership by going for “Super Silent Cabins” or a sound proof one from either of these companies. How funny! You’ll be virtually ridiculed by your friend if your shirt, face cap, t-shirt or shoe is not T.M Lewin, Nike, Polo Ralph Lauren or Clarks. Infact our effort at making our own clothing here in Nigeria has been degradingly categorized as “Aba made”. So don’t even bother putting on a shirt or shoe made in Nigeria especially when going for a glamorous social function.
Malaysia is said to currently have one of the highest export capacities of palm oil in the world. Reports have it that the boom currently being experienced in this area of the country’s agricultural growth has its root in Nigeria and all began when agriculturists, researchers and scientists explored the rich palm fruits from Nigeria. How interesting! Whether this account in the area of Malaysia’s rise in palm oil production is true or not, the bottom point is that several years ago the position was vice versa with Nigeria even exporting rubber and other cash crops in very large quantities. Today our local palm oil circulation is grossly inadequate. I have heard of people forming “swag” because they drank American coffee before coming to work. Nawa o! American coffee! Is it not the same cocoa that was a major export commodity before its replacement by oil that this American coffee is made from? So what has happened to our cocoa? Infact where did the Nigerian coffee go to? I remember seeing some Michelin and Dunlop stores round town some years back. Do you also recall? But now they’re no more. Infact I hear one of these tyre companies have moved to a neighbouring country due to lack of power supply needed for production. Imagine the number of people now jobless because of that!
The most basic things that matter in our academic institutions are even imported. Can you imagine that pencils used by toddlers and children to put down their first letters of the alphabet are imported from ….. Do you doubt it? Just pick up a pencil beside you and you’ll see the country. I guess this was why our Minister of Science and Technology said Nigeria will soon start producing pencils. What an invention by an aspiring great nation in a 21st century world! The man is “really thinking”. But why haven’t we had “made in Nigeria” pencils all along? Most of our pens are imported leaving our indigenous manufacturers such as Eleganza to beg for a share of the market. The trend has moved to books and other paper materials. Imagine attending a meeting with a notepad or diary made by the Onward Paper Mill when you can patronize one of the big stores in town and get an imported and “very sophisticated” diary or notepad to take for that very special board meeting ……………………………………………………..
to be continued
Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates
Time has brought us to the moment when the economy isn’t debated by economists alone. We are freely “poke-nosing” into matters that are primarily not ours to debate. Nonetheless, given that this is democracy and the economy cannot be separated from politics, we are all good to stand before the podium.
As I have maintained here and elsewhere in discussions, there is no basis to devalue the Naira given that we hardly export any good or service. The essence of devaluing the currency was to create an enabling environment for foreign investors to come invest thereby creating employment opportunities and thus helping the economy grow. And from the look of things President Buhari is also on the same with yours sincerely.
Now, recently the ABCON has decided to cut the Dollar price buying at about N205 and selling at about N240. This has start yet another debate with our patriot compatriots expressing dismay over what appears to be a welcome development.
Patriotically, Abdullahi A Abdullahi and several others have expressed dissatisfaction over the drop of the Dollar price lamenting that it will not help the economy. They prefer a situation whereby the Dollar will remain high thereby forcing us to look inwards.
While I concur with their stance, I still feel because of the hardship we will continue to suffer, it is good the Dollar comes down as there are several other ways or better still measures through which government can compel us to look inwards.
Either liberally through raising custom duties of imports or forcefully through ban of imports of certain goods and services. In Malaysia for instance, foreign cars are quite expensive that they are hardly afforded because of high custom duty.
As a matter of importance meanwhile, government must begin public enlightenment campaigns in order to reorient our minds and thoughts towards using made in Nigeria goods and services. It also has to show example by for instance making it a policy that henceforth official cars of government should be Innoson automobiles.
Jarmajo is on Twitter: @mukhtarjarmajo
Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates
Following yesterday’s rebound of the Naira against the Dollar, Chairman of Capital Oil and Gas, Dr. Ifeanyi Ubah on Thursday warned that there is a time limit within which he can prevent speculators from causing further damage to the Naira.
The businessman, who warned that the saboteurs responsible for the decline in the value of the Naira.
“might still go back to their old business and the dollar will go up” if the Federal Government does not quickly act in line with his advice, stating that he has been receiving threat messages since he volunteered to help revamp the Naira.
It would be recalled that Ubah had on Sunday at a Channels Television programme stated that he had what it takes to restore the Naira, which was by then trading at close to 400, to 200 against the dollar in one month, if consulted by President Muhammadu Buhari.
He had said, “Look at the economy, look at the position of the naira today; some of us have ideas on how we can restore this.”
“It won’t take me one month, if Buhari gives me part of that consultancy, and naira would come back to 200.
“I can bet my life with it, naira would come back to N200. If you call me for that consultancy, I would put naira back to 200.”
Three days after he made this claim, the Nigerian currency firmed up against the Dollar in about 100 per cent, to the extent of trading at 250 against the American greenback as at yesterday.
But reacting to this in RayPower 100.5 FM programme: Political Platform, the Capital Oil boss said:
“I’ve been getting threats from certain individuals using unknown numbers.
The issue is this: I sincerely believe that one with God is majority. If government is sincere with the masses, let them look into what we are saying. Let them look into what Nigerians are saying. We cannot keep this thing for long. They might still go back to their old business and the dollar will go up.
“I’ve volunteered to help. I am not a jobless person. If they don’t do what they are supposed to do, I will go back to my business. I have something I’m doing. What I wanted to do is to get involved and at the same time advise the people saddled with the responsibility. I’m not only saying the president should call me. I said even the managers of forex, even the CBN can invite to say can you give us a lecture, can you help us with the market square information.
Let me give them the advice on what they need to do because we understand this thing. You cannot come into any strong position in government without being a practical person. You must practicalize the way things happen in this country and then you add academic concept into it and then you bring a good result.”
Speaking on what he would do if invited to manage the Naira, he said:
“I will tell them look gentlemen, we are here for business. This business is not for us to enrich ourselves. This business is not for us to monopolize things for ourselves or to corner something to ourselves or to our cronies. We are here to serve Nigerians, let us make this thing available to Nigerians so that Nigerians can be happy and God will be happy with us.”
Ubah, who told the anchors of the programme that he does not want to take credit for the substantial firming up of the Naira against the Dollar, gave an insight into how he went about achieving the feat thus:
“What I am telling you is that since Sunday that we took that position, people within my structure disseminate close to 70,000 text messages at every time we disseminate information and if you understand the multiplier effect of that 70,000 contacts which spreads to so many millions. This is what we need.
“You need to build into the consciousness of people that this is where we are going. This is what is happening. If you don’t have a means of disseminating information, people will not understand what is happening.
“I’ve not taken contract from government and I don’t need anybody to pay me anything. All I want is for Nigerians to be happy,” he added, even as he maintained that the Central Bank of Nigeria, CBN, lacked the right approach and the political will to secure the Naira: “Some of the policies CBN has are academic policies. It’s not a market-square policy. It’s not a policy that touches people. They have academic policy and there is no enforcement. Have you ever heard that CBN prosecuted one single individual in the last two years for violating foreign policy?” he asked.
Credit : Daily Post
The naira on Friday exchanged at N335 to the dollar as the scarcity of the greenback worsened at the parallel market.
The naira lost N10 to exchange at N335 to the dollar, a depreciation of three per cent. It previously traded at N225 to the dollar.
Meanwhile, the official Central Bank of Nigeria (CBN) exchange rate remained at N197 to the dollar.
Traders at the market expressed worry at the increasing shortage of the greenback and urged the government to take immediate steps to stem the tide.
The naira on Wednesday continued its fall against the Dollar on the parallel market, closing at 318 against the United States dollar.
It was the third time in three days the naira would experience a drop. The currency, which was traded at 310 for a dollar on Monday and 313 on Tuesday, crashed again on Wednesday against the dollar, amid dwindling liquidity and now sells for N318.
Nigerian economy is experiencing some downturns.. More than anything, it appears that high oil price, the major driver of the supposed growth of the last 16 years, will remain a pipe dream for a longtime. The Chinese economy has continued to experience a slowdown and financial instability while the shale oil technology has come to stay even when the continued low price makes it expensive to produce. the revenues from Nigeria’s oil sales has witnessed a sharp decline of more than 70percent from September 2014, when the receipt was at its peak, to now with dire consequences to the federation. The crude oil sales account for over 70 percent of the total country’s revenue and more than 90 percent of Nigeria’s foreign exchange earnings.
Monday’s stoppage of foreign exchange sales to Bureau De Change operators by the Central Bank of Nigeria failed to lift the naira on Tuesday as the currency exchanged for 300 against the United States dollar in Kano, 290 in Lagos and 292 in Abuja.
Financial experts said the naira would decline further, while private sector operators described the move as a welcome development.
The ban was announced on Monday, when naira trading at 285 against the dollar at the parallel market from 278 on Friday.
The Acting President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told one
of correspondents in a telephone interview that the currency traded against the greenback at 300, 290 and 292 in Kano, Lagos and Abuja a day after the CBN announcement.
“There is cut of (dollar) supply to the market. The BDC sub-sector has been murdered. We are not coping. The naira is going to head northwards. There is no solution in sight,” Gwadabe lamented.
The Head of Investment Research, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said the stoppage of forex sale to the BDCs meant that the CBN wanted everybody to apply to the banks for dollars.
He stated, “But we feel the pressure now will move from the BDCs to the parallel market. We will see significant spike in the value of the naira at the parallel market because the little supply to the BDCs have also helped to cushion the demand at the parallel market.
“It will further compound or increase the spread between the parallel market and the interbank market. So, it will also increase round-tripping and unethical practices within the financial system.”
On the lifting of the ban on cash deposits into domiciliary accounts, Ebo said, “I am still sceptical about how this will work except they are also assuring us that if you deposit it, you can consummate business with it.”
A professor of financial economics at the University of Uyo, Akwa Ibom State, Leo Ukpong, said, “I don’t think the stoppage of dollar sale to the BDCs will solve the problem. The currency will depreciate some more.
“This move will make the naira to weaken more as demand for dollar will skyrocket because of the short supply.”
Members of the organised private sector, however, applauded the CBN for the stopping the sale of dollars to the BDCs and lifting the ban on cash deposits into domiciliary accounts.
The President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, said industrialists had earlier kicked against the funding of the BDCs by the central bank, adding that with the development, the forex could be channelled towards funding the real sector in terms of importation of raw materials.
On the removal of the restriction of cash deposits into domiciliary accounts, Jacobs said manufacturers were still waiting for more clarification as to how the money deposited could be utilised by the customers.
The Director-General, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Mr. Emmanuel Cobham, said the forex sale ban was a welcome development.
According to him, although the BDCs are necessary in the economy, they are licensed entities and should, therefore, source for their own funds.
Also speaking on the matter, the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, lauded the forex policy review, noting that it had addressed the concerns of economic operators.
According to him, it is a source of worry that the CBN continues to maintain its official exchange rate at N199 to the dollar at a time of dwindling forex inflow.
“The pressure on the official window will persist. The risk of round-tripping and distortions in the foreign exchange market will consequently remain high,” he said.
The Lagos Chamber of Commerce and Industry said private operators have lost about N1.46tn as a result of the foreign exchange constraints being experienced in the country over the last six months.
This is coming just as the Federal Inland Revenue Service has hinted the citizens will pay higher taxes from next year as a means of shoring up the nation’s revenue.
The LCCI, in its 2015 economic review, said its third quarter 2015 business environment survey showed that a forex restriction by the Central Bank of Nigeria was one of the costliest policies in Nigeria in recent years.
The Director-General, LCCI, Mr. Muda Yusuf, in a statement on Sunday, said, “The private operators
across several sectors (fast-moving consumer goods, steel, furniture, pharmaceuticals and manufacturing) lost about N1.46tn in stalled business activities resulting from paucity of forex over the last six months.”
Citing data from the National Bureau of Statistics, he noted that the country’s real Gross Domestic Product fell to 2.84 per cent in the third quarter of 2015, compared to 6.23 per cent in the same period in 2014.
Sectors such as manufacturing and the services slipped into recession after recording successive declines over the last three quarters in 2015, the LCCI said.
The group noted that the CBN had, in response to dwindling receipts from oil export, adopted several measures such as the closure of Retail Dutch Auction System window, restriction of cash payment into domiciliary accounts and prohibition of 41 items from accessing the interbank foreign exchange market.
It expressed concern about the state of the economy and the effects of the CBN’s policies on the operations of manufacturing firms and other private businesses.
It said, “The CBN’s administrative allocation of foreign exchange signposted much deeper challenges for investors and the economy. As of December 18, 2015, premium at the parallel market reached a record level of 35 per cent against the official exchange rate as the naira crashed further to 270/$ in the parallel market.
“The LCCI and the business community are very concerned about the current state of the economy and the consequences of the CBN’s approach to the management of foreign exchange market over the last few months. We have previously engaged the CBN and other authorities through several forums to draw attention to the implications of forex policies on businesses and the economy.”
In its macroeconomic outlook for 2016, the LCCI said it expected the GDP growth to rebound slowly to about 3.5 per cent, which would be driven by the increase in government expenditure.
The group also stressed “the right mix of fiscal and monetary policies to stimulate the economy and attract domestic and foreign investments.”
It also expected the exchange rate volatility to persist, fuelling high inflation of about 10-11 per cent.
“However, correction towards real effective exchange rate in the form of exchange rate adjustment is likely in Q1 2016. This will reduce the pressure on external reserves,” it stated.
The LCCI said with the declining trend of global oil price and its attendant impact on government revenue and foreign reserves, general business outlook would remain tense.
It said, “Implications on cost of and access to credit will be undesirable. Businesses, especially those with high forex exposure, will continue to face challenges of meeting foreign obligations to suppliers and partners. This will also impact contractual trust and integrity.
“Risk of default in financial obligations in both public and private sectors will be high as macro-economic conditions and cash flow remain tight.”
The group noted that the CBN through its Monetary Policy Committee on November 24, 2015 resolved to reduce the monetary policy rate from 13 per cent to 11 per cent (the lowest since 2009) and the cash requirement ratio from 25 per cent to 20 per cent, in a bid to stimulate the economy.
The LCCI said the cost and access to fund remained a major challenge for businesses, especially Micro, Small and Medium Enterprises, adding that through the year, lending rate of commercial banks, including fees and charges, ranged between 22 per cent and 34 per cent, depending on the customer profile, tenor and collateral quality.
Meanwhile, the FIRS has urged Nigerians and others doing business in the country to be prepared to pay higher taxes next year.
The service spoke in Ibadan through one of its accountants, Anuoluwapo Ijaduola, at a lecture on the dwindling crude oil prices and its effect on taxation organised by Excel Assembly Foundation as part of its annual general meeting.
He said, “We’ve all been talking about diversifying our economy; yes, it is good, but it is not the only way out. It will not happen overnight. Corporate organisations, other companies and individuals should be ready to pay more in terms of taxes. If we want the country to move forward, we must be ready to pay our taxes, even more than what we have been doing before. Borrowing money can only be a short-term remedy.”
Source: Punch
Officers of the Nigeria Police Force that constitute the Lagos State Government crime combat team known as Rapid Response Squad (RRS) yesterday arrested five members of a 15-man syndicate which specialised in dollar counterfeiting and defrauding of members of the public.
Our correspondent learnt that the suspects identified as, Ade Oladele (32), Friday Philip (33), Israel Ibeh (35), Oyewole Thompson (30) and Onyegbuchi Godwin (31) were arrested in Oko Baba Sule and Wilma Bridge around Olodi – Apapa.
The syndicate, led by their gang leader, simply identified as Toronto, were alleged to have defrauded one Chioma Anozie of N210, 000.00 under the pretext of supplying her phones and laptops.
One of the notorious gang members, Oyewole Thompson, was said to have met Anozie in Mile 2 pretending to be a foreigner looking for a marketer to help sell off a huge consignment of mobile phones and laptops.
Before Anozie knew it, she was directed by the syndicate to bring money to get the consignment.
She said, “They told me to bring money. I paid them N210, 000.00 and thereafter I was asked to bring three live chickens in place of a newly born child’s head, a roll of white handkerchiefs and traditional soap for money making rituals.”
Confessing to the crime, Oyewole Thompson, one of the leaders of the gang said,” I was a clearing and forwarding agent before I joined this gang. I was introduced to this business by Sunny T. We wash money. We lie to people that we are foreigners.
“Our Chairman is Toronto, while other members of the gang are Emeka, Ifeanyi, Bobo, Onyinbo, they are still at large.”
Found with the suspects were several denominations of fake US dollars and four mobile phones.
Credit: Leadership
During the last campaign, the then APC Presidential aspirant, Muhammadu Buhari was alleged to have made a remark that he would make the naira at par with the dollar. It was clear that this was the handiwork of mischief makers as the General never stood by that statement. Since his assumption in office, the naira has fallen three times and this calls for concern as this was a currency that was once stronger than the dollar and on the same page with the Pounds sterling.
The Naira sadly has been destroyed by speculators, rent-seekers, rogue importers and highly corrupt government officials. The Central Bank shares greatly in the blame as the confidence level in it has been badly obliterated. It now pays phony obeisance to the dollar as the latter is now the currency of choice even within the domicile of the ‘Giant of Africa’. The dollar is now being used to purchase choice real estate, luxury goods and services. Corrupt businessmen and government officials have the nauseating practice of giving black market operators massive Ghana-must-go bags in exchange for dollars which they stow away in financial havens like the Cayman Islands and Dubai. The CBN turns a blind eye to these atrocities. The black market has now emerged as the major headache in the financial sector. The key players in this racket are the Bureau De Change Operators, Itinerant Street Traders, Unlicensed Forex Traders who buy and sell cash and currency transfers and the round tripping activities of banks. The irony of the whole charade is that the Central Bank is the major source of their dollar or foreign exchange supply.
The origin of the black market funding is the practice of the CBN doling out thousands of BDC licenses under the ruse of bringing sanity into the market. The licenses kept increasing by the subsequent regimes. $30,000 is sold to 300 BDC’s on a weekly basis which is a whopping $90 million. That is $360 million a month and billions a year. Globally, it is not the best practice for the central bank to directly fund BDC’s but the International Monetary Fund Prescription is responsible for this as it was one of the conditions for the debt exit in 2005/6. The market has been further abused by corruption infested politicians who use it as a market of choice to convert pilfered funds into it to be parceled abroad to the detriment of the naira as the transaction is done in dollars.
The wild swing in the naira exchange rate has baffled Nigerians. The CBN Boss, Godwin Emefiele has devalued the naira from 155 naira to $1 and 197 naira to $1 in his first year in office. The denial of access to official foreign exchange of 41 imported items made the exchange rate balloon to 240 to $1 in the parallel market. The pricing model of the black market has greatly undermined the naira and exposed it to an imminent collapse.
Is it valid constitutionally for the CBN to deliberately sustain the practice that is inimical to economic growth which has worsened the already terrible state of massive unemployment? This practice is contrary to Sections 14(2B)
and 16(1 and 2) of the 1999 constitution which define the primary role of government to be the provision of security and improve the social and economic welfare of the people.
The Buhari government needs to stem this tide if we want to avoid an ugly trend of hyperinflation similar to what Zimbabwe is passing through where a loaf of bread is of more value than millions of their local currency.
It should destroy totally the black market. The street traders should be made to bite the bullet and the use of force should apply where necessary.
The CBN should desist from funding the BDC’s every week. The operators should make their bids to the CBN proving why they need funds for tourists and travellers.
The CBN should put in place fiscal policies to curb our forex supply, block leakages within the porous system and prudently manage the resources of the nation which has suffered from the locusts since independence.
No other currency should be openly traded in Nigeria. There should be massive public enlightenment campaigns through the National Orientation Agency, the Public Affairs Department of the CBN and the Federal Radio Corporation of Nigeria with heavy sanctions for violations. Pride should be restored to our naira powered by nationalistic sentiments.
Buhari must rise up to the challenge of flushing out these heartless economic saboteurs and providing uncommon leadership at this great time of anguish.
The duty of the protection of the Naira which is our collective jewel should be a matter of concern for all and sundry and should be imbued in our toddlers so as to save the forthcoming generation from the woes of the long-term concomitant effect of the activities of the buccaneers masquerading as leaders of economic thought.
TONY ADEMILUYI
Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates
During the last campaign, the then APC Presidential aspirant, Muhammadu Buhari was alleged to have made a remark that he would make the naira at par with the dollar. It was clear that this was the handiwork of mischief makers as the General never stood by that statement. Since his assumption in office, the naira has fallen three times and this calls for concern as this was a currency that was once stronger than the dollar and on the same page with the Pounds sterling.
The naira sadly has been destroyed by speculators, rent-seekers, rogue importers and highly corrupt government officials. The Central Bank shares greatly in the blame as the confidence level in it has been badly obliterated. It now pays phony obeisance to the dollar as the latter is now the currency of choice even within the domicile of the ‘Giant of Africa’. The dollar is now being used to purchase choice real estate, luxury goods and services. Corrupt businessmen and government officials have the nauseating practice of giving black market operators massive Ghana-must-go bags in exchange for dollars which they stow away in financial havens like the Cayman Islands and Dubai. The CBN turns a blind eye to these atrocities. The black market has now emerged as the major headache in the financial sector. The key players in this racket are the Bureau De Change Operators, Itinerant Street Traders, Unlicensed Forex Traders who buy and sell cash and currency transfers and the round tripping activities of banks. The irony of the whole charade is that the Central Bank is the major source of their dollar or foreign exchange supply.
The origin of the black market funding is the practice of the CBN doling out thousands of BDC licenses under the ruse of bringing sanity into the market. The licenses kept increasing by the subsequent regimes. $30,000 is sold to 300 BDC’s on a weekly basis which is a whopping $90 million. That is $360 million a month and billions a year. Globally, it is not the best practice for the central bank to directly fund BDC’s but the International Monetary Fund Prescription is responsible for this as it was one of the conditions for the debt exit in 2005/6. The market has been further abused by corruption infested politicians who use it as a market of choice to convert pilfered funds into it to be parceled abroad to the detriment of the naira as the transaction is done in dollars.
The wild swing in the naira exchange rate has baffled Nigerians. The CBN Boss, Godwin Emefiele has devalued the naira from 155 naira to $1 and 197 naira to $1 in his first year in office. The denial of access to official foreign exchange of 41 imported items made the exchange rate balloon to 240 to $1 in the parallel market. The pricing model of the black market has greatly undermined the naira and exposed it to an imminent collapse.
Is it valid constitutionally for the CBN to deliberately sustain the practice that is inimical to economic growth which has worsened the already terrible state of massive unemployment? This practice is contrary to Sections 14(2B)
and 16(1 and 2) of the 1999 constitution which define the primary role of government to be the provision of security and improve the social and economic welfare of the people.
The Buhari government needs to stem this tide if we want to avoid an ugly trend of hyperinflation similar to what Zimbabwe is passing through where a loaf of bread is of more value than millions of their local currency.
It should destroy totally the black market. The street traders should be made to bite the bullet and the use of force should apply where necessary.
The CBN should desist from funding the BDC’s every week. The operators should make their bids to the CBN proving why they need funds for tourists and travellers.
The CBN should put in place fiscal policies to curb our forex supply, block leakages within the porous system and prudently manage the resources of the nation which has suffered from the locusts since independence.
No other currency should be openly traded in Nigeria. There should be massive public enlightenment campaigns through the National Orientation Agency, the Public Affairs Department of the CBN and the Federal Radio Corporation of Nigeria with heavy sanctions for violations. Pride should be restored to our naira powered by nationalistic sentiments.
Buhari must rise up to the challenge of flushing out these heartless economic saboteurs and providing uncommon leadership at this great time of anguish.
The duty of the protection of the naira which is our collective jewel should be a matter of concern for all and sundry and should be imbued in our toddlers so as to save the forthcoming generation from the woes of the long-term concomitant effect of the activities of the buccaneers masquerading as leaders of economic thought.
TONY ADEMILUYI
Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates
annual production output of “half of the nations in Africa.”
The battle for defence of the Naira value has widened, affecting existing withdrawal limits on Automatic Teller Machines (ATMs) and foreign transactions on all existing Naira debit cards (ATM cards).
In the new arrangement, all ATMs that were hitherto enabled for domestic and foreign transactions have been restructured to limit Naira cash withdrawal at ATMs to N60,000 per day while foreign currency is $300 per day. Hitherto, the domestic withdrawal limit was N150,000 per day.
The new arrangement has separated traditional ATM from MasterCard credit card where the former has now been deactivated and can no longer be used for transactions abroad. Hitherto, a single ATM card serves for transactions for both domestic and abroad.
Also, the restructured cards now have spending limits on POS/eCommerce (online shopping) pegged at $300 (about N60,000) per day. Before this, the limit was N2 million per day.
In the new arrangement, a bank customer with multiple debit cards (ATM cards), only the one linked to the primary transactional account will be enabled for use abroad. Hitherto, such customers could transact with any of the cards that is funded.
However, banks are putting in place alternatives in these adjustments to address the concern of customers who are now being directed by their banks to reapply for a new card arrangement to suit their purposes.
For instance, Standard Chartered Bank has asked its customers to request a complementary ATM card for domestic use only so that the original N150,000 daily cash withdrawal limit can be restored and also reactivate POS/online purchase limit of N2 million per day.
The bank also required their customers to apply for a foreign currency denominated ATM linked to domiciliary account which would be enabled with no daily or annual international transaction limits.
Earlier, Guaranty Trust Bank Plc had informed its customers of its decision to reduce the daily international spending limit on their Naira MasterCard to $300 with effect from yesterday.
In a communication to the customers, the bank explained: “In view of the increased difficulty in sourcing foreign currency to settle international transactions on Naira MasterCards, we have reduced the daily international spending limit on your Naira MasterCard to $300.This means that you can only spend up to $300 daily when using your GTBank Naira MasterCard for international payments via POS and online.
“You will, however, continue to have the option of paying for medical bills, school fees, mortgages and credit cards using Form A, as these are eligible transactions for foreign currency. Simply visit any GTBank branch to complete a Form A along with the required documents to make these payments.”
These developments were coming on the heels of Central Bank of Nigeria’s (CBN) statement on Sunday that all legitimate requests for foreign currency for eligible transactions, normally referred to as “invisibles,” such as remittances for school fees, student maintenance allowances, BTA, PTA, medical and other eligible transactions, shall be fully met at the official/interbank exchange rate.
A statement from the CBN added that already all the legitimate demands for such transactions through recognised channels have so far been fully met by CBN.
The statement stated: “The CBN hereby directs all authorised dealers in foreign exchange in Nigeria to henceforth treat as top priority all legitimate demand for foreign exchange for eligible transactions.
“The CBN once again advises individuals that wish to source foreign currency for such eligible transactions to approach their banks with their legitimate demand as the CBN has made adequate provisions of foreign currency for all such legitimate and eligible purposes.
“Furthermore, holders of Naira denominated debit and credit cards shall continue to have access to the use of their cards at ATMs in any part of the world but subject to the annual limit of $50,000. ATM withdraws shall continue to be a maximum of $300 per day.”
– Source – www.vanguardngr.com
The naira appreciated against the US dollar in the parallel market, closing at N215 to a dollar. This represents an appreciation of N16 from Tuesday when a dollar exchanged for N231 in Lagos and Kano, and N230 to a dollar in Abuja.
It was gathered that the CBN issued a circular to sell additional $30,000 to all licensed bureaux de change (BDCs) in the country on Friday, apart from the weekly sale of $30,000 that the apex bank normally makes to each BDC.
Read More: vanguardngr
appreciate further this week at the parallel market.
The naira hit another record low of 241 against the dollar at the parallel market on Monday as the Central Bank of Nigeria’s restrictions on foreign exchange sale fuelled unofficial trade in dollars, Reuters reported.
The ban on importers from accessing the Nigerian foreign exchange markets for the importation of 41 items had led to the volatility of the naira-dollar exchange rate at the black market.
Since June 23 when the new forex rule became operational, the naira has fallen by 10.5 per cent from 218 to 241 against the greenback.
Foreign exchange dealers said the artificial scarcity of the United States currency still pervaded the market.
The new forex rule had led to huge demand at the parallel market, causing dealers to hoard the dollar in anticipation of further fall in the naira
Economic analysts had said the CBN needed to devalue the naira to allow the local currency achieve an equilibrium price against the dollar.
The central bank had however said it would not be focusing on the thinly-traded parallel market when determining the exchange rate, adding that people preferred to use the unofficial market for undocumented transactions.
Foreign investors had been on the sideline, waiting for the CBN to devalue the naira before investing in naira-denominated assets.
Local and foreign analysts had predicted that the naira might hit 250 against the dollar at the parallel market any time soon if the artificial scarcity trend continued.
The central bank appears to be in a fix as the spread between the official and parallel market continues to widen by the day.
Meanwhile, stocks fell to a more than three-month low and the naira on Monday, Reuters reported.
The local bourse, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, dropped for the ninth consecutive day as investors shed banking, consumer and oil shares.
The naira fell further to a new record low of 235 to the dollar at the parallel market on Thursday, as dollar shortages persisted, foreign exchange dealers said.
The President, Association of Bureau De Change Operators, Aminu Gwadabe, said people were holding dollars to protect themselves against further naira weakness.
The naira, however, ended at 196.95 on the official interbank market on Thursday.
The local currency had fallen to 233.5 earlier in the week.
The naira has been on the ropes on the parallel market since the Central Bank of Nigeria introduced new measures two weeks ago restricting importers from sourcing the greenback from the interbank market, shifting dollar demand to the black market.
The naira, which was selling at 218 before the new forex rule, had been dropping steadily against the dollar since then.
Analysts had predicted that the naira might fall to 250 against the dollar if the current demand pressure persisted.
The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, had on Wednesday said the central bank’s forex rules were yielding results as the external reserves had started to recover grafually.
Justice Ibrahim Buba of the Federal High Court, Lagos today convicted one Kutumisana Mbuta Blaise, from the Democratic Republic of Congo, for money laundering.
Blaise was arraigned by the Economic and Financial Crimes Commission, EFCC, on one court charge of money laundering sequel to his arrest at the Murtala Muhammed International Airport, Lagos for being in possession of Five Hundred and Eleven Thousand, Two Hundred and Twenty Five United States dollars ($511,225.00), cash which he failed to declare to the officers and men of the Nigerian Customs Service as required by the provisions of Section 2(3) of the Money Laundering (Prohibition) Act, 2011 (as amended by Act No. 1 of 2012).
He had pleaded not guilty upon arraignment but after diligent prosecution by the EFCC, Justice Buba found him guilty as charged.
“The court is satisfied that the prosecution proved his case beyond reasonable doubt and thereby finds you Kutumisana Mbuta Blaise guilty of the allegation contained in the one count charge before the court and hereby convict you of the offence of failure to declare the sum of Five Hundred and Eleven Thousand, Two Hundred and Twenty Five United States of America Dollars in contravention to section 2(3) Money Laundering Prohibition Act 2011 (as amended by Act No. 1 of 2012) and punishable under section 2(5) of the Money Laundering (Prohibition) Act, 2011 (as amended by Act No. 1 of 2012).”
The convict is to forfeit the entire sum to the Federal Government of Nigeria in line with provisions of the Money Laundering Act.
PM News
Media men had a piece of Aliko Dangote last weekend. And when they were done many appreciated why he is one of the richest in the world. In an interactive session with senior editors Dangote discussed state of the nation while explaining some details in his businesses that are geared towards a better life for Nigerians.
On oil subsidy he said,
The issue with subsidy is that government needs to block all loopholes. If there’s no subsidy, it will affect our foreign exchange, we’ll end up buying a dollar at N500, because there’s no VAT on petroleum products. That’s why the import of petroleum products is taking about 30% of our foreign reserve. We just need to make sure that there’s no siphoning of money. The refining business requires volume. If you don’t have a massive volume, there’s no way you’ll make money. Most of the refineries in Africa are running at a big loss. It’s not possible for government officials to successfully manage oil businesses. It’s good enough if they remove the subsidy, but you can check with neighbouring countries like Senegal. If a poor person in Senegal can afford to pay subsidy, why can’t a poor person in Nigeria afford to pay. I think there must be something for the masses, which should be in terms of power, social insurance, good education system, good roads etc.
Read More: vanguardngr
The naira, which rose to 180 against the dollar shortly after the inauguration of President Muhammadu Buhari about a month ago, has fallen to 222 at the parallel market due to a huge demand for dollars by importers and investors.
Increasing business activities have made importers and investors to move their foreign exchange demands to the parallel market, putting pressure on the naira at the segment, it was learnt on Tuesday.
The dollar was sold for between 220 and 222 on the streets of Lagos, Abuja and Kano on Tuesday, while the pounds and euro were sold for 350 and 249, respectively.
Analysts and foreign exchange dealers said the future of the naira looked bleak, at least at the parallel market.
The Central Bank of Nigeria has been depleting the external reserves in a bid to defend the local currency.
At the interbank forex market, where the central bank intervenes regularly to defend the currency, the naira closed at 199 against the dollar on Tuesday, data from the FMDQ OTC website showed.
The external reserves fell to $29.03bn on June 22, from $29.8bn on May 18, data from the CBN website showed.
Prior to the latest development, the foreign reserves had been stable for several weeks.
Economic and financial analysts said the latest movements in the external reserves meant that the naira was beginning to come under some fresh pressure.
Concerned about the depletion of the reserves, the CBN met with bank officials on Friday to discuss
how to mitigate the pressure on the external reserves.
The CBN has yet to make the outcome of the meeting official but sources said the central bank wanted the banks’ cooperation in order to reduce the pressure on the reserves.
The bank officials, it was learnt, told the CBN that it needed to relax its rules in the forex market and allow the naira to find its level.
The officials, however, promised to take the deliberations at the meeting to the CBN Governor, Mr. Godwin Emefiele.
It is unclear if the CBN will accede to the demand of the banks to relax the rules in the forex market, but the spokesperson for the central bank, Mr. Ibrahim Mu’azu, could not be reached immediately for comments. Calls made to his mobile telephone line were not answered.
Last November, the CBN devalued the naira after spending several billions of dollars to defend the local currency.
The Acting National President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told our correspondent on Tuesday that the naira’s outlook at the parallel market looked bleak, forecasting that the currency might fall to 230 against the dollar in the coming weeks if the central bank failed to deploy measures to curb the increasing dollar demand at the parallel market.
He said, “There is pressure on the naira again. Maturing import bills are making the demand for dollars to rise again. Most importers and investors are saying they could not access dollar at the official market.
“They are now turning to the parallel market, a situation that is now fuelling the demand for dollar and other foreign currencies at the parallel market.”
The Head, Research and Investment, Afrinvest West Africa Limited, a research and investment advisory firm, Mr. Ayodeji Ebo, said, “The CBN needs to do something urgently otherwise it (slide in the value of the naira) will continue.
“If the pressure continues, the CBN may devalue the naira. I think the CBN is also waiting to see the plan of the new government in order to align its monetary policies with it. Once the new government comes up with its plan, the CBN may devalue the naira. If that is done, foreign investors who have been waiting on the sidelines will come in.”
foreign exchange dealers said.
Dear Sir,
Please do not consider the homophone of this caption but the sincerity that is inherent in the message.
Sir, many Nigerians have written many notes to you but I know you got one in particular: OBJ’s.
I know some of your aides will read this message but will never show it to you. You have made us to understand that going by the composition of your cabinet, a high quantum of the advice your aides give to you are useless, and my conclusion that they will not allow you to read this piece is based on that premise.
I have taken some time off writing in public space( especially on my blog) for two weeks now, as I have concentrated my energies on a book I am writing presently. Don’t ask me what the book is all about because it is not a general read.
This is a critical time in our national history just as other times in the past and will be in the future; the more reason I am stepping out of my study.
Many Nigerians, including myself, daily hurl insults at your person but just last week, I sat myself down for a moment, to appraise the whole scenario around your ascendancy and occupation of the Office of The President. Truly and truly you deserve to be there because the system paved the way for someone like you. They call you drunk but who would not need a form of stimulant to preside over this heterogeneity with its attendant humongous qualms?
We all know the story behind your ascendancy and I would not want to repeat the tale here because of your time but allow me to recount some events of your reign.
You are so sincere; if I am not mistaken, the sincerest of all the rulers that ever walked this land. When asked to declare your assets publicly as required by law, you were blunt with all of us. Not that any President, apart from late Musa Yar’ adua, ever declared theirs, but none of them, including Baba Iyabo, had the guts that you have. You bluntly said you don’t give a damn and that you would not declare any asset of yours publicly and you never did. That is sincerity.
You went further to inform us that you have Boko Haram members in your cabinet, but you have “no balls”(let me use the word of FFK) to publish their names. It was also reported at one time that the efforts of the allied forces that came to work with your government to nip the menace of BH in the bud were scuttled by intelligence leakage to the sect by some people in the military. Still, you had no balls.
Recently, your over-simplicity made you divulge the mindset of your inner circle by telling us that you did not see anything bad in corruption in anyway as it is only mere pilfering. At this news, the populace went hysteric, myself inclusive, but much later I came to the realisation that you are our President and whatever you say is right. Haven’t we heard? “The President can never be wrong”.
You have made us to know that you are a man of civil posture by requesting of us not to refer to you as a Commander-in-Chief. That you reaffirmed by telling the world you were bypassed by your Service Chiefs when they went ahead to execute that coup on the rest of us that so gave you a six-week window to ‘tidy up’ your campaign and I must sincerely let you know that you have done a wonderful laundering in these past few weeks. The dollar is working.
Just few days ago you told the world that all the while Boko Haram was having a field day in the Northeast, you were busy sourcing for weapons to fight the insurgency. Some people even forgot that your most amiable wife had once informed us that herself and yourself hardly slept together from the day the news of the abducted girls got to you and that you demonstrated by taking your time( 10days) before your government could speak on the issue. So many people did not know you were waiting on the Lord, fasting that the girls be returned safely, after all, you are the father of the nation, in case they don’t know you are a man of action.
I will not want to mention the tart-fool-ness our mother, your wife has brought into the business of political campaigning. Truly, she is a paradigm of a solid woman behind a successful husband. More grease to her elbows.
Dear sir, some took your sincerity as tactlessness; I used to think that way too but now my mindset has changed, especially after watching you on the screen during that “once-in-a-lifetime-opportunity” to #MeetThePresident and the recent Creative Industry #ChatWithGEJ. I see that you are a lover of the youth by your engaging interaction with them and that you also cherish creativity by your promise of $5billion to the industry. You are such a bloke that some babes were ready to bare it all for you: one even came on stage declaring that she was ready to die for you and your party. You must have treated her to some dollar bills. I applaud her ‘dollared’ fondness for you.
You were sincere when you told us the election will hold only that you sincerely think the best way to go about getting people to vote you in for a second term is through harassing them by elevating felons to statesmen and unleashing such on the society. What a sincere campaign strategy.
But sir, I will like to vote for you just like many other Nigerians especially when these past weeks have revealed that you sincerely have plans for us, but which mirage could only be feasible if and only if you are re-elected (the 50% reduction in electricity tariff would only take effect from next month); but you know, I only have one vote and I have promised myself to always be an agent of change. Also, during my moment of appraisal, I found that it is better to tread the path that will lead to greater utopian. Sir, over-simplicity is not a virtue; just being simple is far better.
I did not voice this so that you may visit me for some endorsement or blessing as I don’t have morons amongst my family, friends, followers and community. The people that surround me are adults who are capable of making their own choices and bear whatever consequences that may follow.
Though you are sincere in your incompetence and ineptitude, but I must sincerely tell you that this is the end of the road. Start working on your relocation plan. Don’t wait till the last day.
The value of the naira has remained stable at the interbank market but many Nigerians have continued to groan over the dwindling value of the local currency as only a few have access to cheap foreign exchange.
Whilst the value of the naira at the interbank closed at N197 to the dollar on Friday last week, bureaux de change and black market sellers of the foreign currency are pricing the naira at around N250 to the dollar.
Some Nigerians who spoke with Leadership complained that they now have to pay more despite the fact that the economy has been almost at a standstill in recent months.
A professional, Seun Olukoya, whose wife is in the United States, said that he now has to pay more to get dollars to send abroad to his wife.
“It has become even more expensive for me to continue to send money to my wife and I just can’t wait for them to return home soonest. The high cost of foreign exchange is being made worse by the fact that business have been slow but I am hoping that business and the value of the naira will pick up after the election this month.”
The dwindling value of the local currency has also affected the price of imported goods as cost of importation had risen. Although, the Central Bank of Nigeria (CBN) has promised to meet genuine foreign exchange needs, many goods are still brought into the country at a high cost. Mrs Ola Sodiyan said she had to put a hold on completing her building. She explained that although she has finished the construction of the building, the high cost of furnishing and appliances for the new building was more than she could afford.
“When I go to price these appliances, the traders tell me that the price of everything has gone up because the dollar is now expensive. I cannot afford it, so I am hoping that probably after the election, everything will return back to normal,” she said.
Jubri Abdul, a black market foreign exchange (forex) dealer lamented that getting foreign currency has become more tedious as he can no longer buy from banks but have to rely on individual customers. He noted further that he barely makes profit from the sale of forex.
The CBN last month scrapped the retail Dutch Auction System (rDAS) where it sells dollars to banks, importers and BDCs as the gap between the CBN rate, interbank rate and parallel market rate widened. Consequently, the naira has hovered around N198 at the interbank where the apex bank intermittently intervenes but has continued to lose value at the parallel market. Data from the CBN show that official reserves decreased by $2.9 billion in February to $31.4 billion. The fall could be divided between $1.8 billion before the CBN announced the abandonment of the rDAS on February 18, and $1.1 billion afterwards, indicating a lower drawing on official reserves during its interventions at the forex market at its clearing rate.
The reserves have further declined within the first week of March to $30.85 billion as at March 4, 2015, according to latest data on the website of the CBN. Nigeria’s external reserves are sufficient to provide 7.3 months’ cover for merchandise imports and 5.1 months when services are included.
The Naira on Friday depreciated against the dollar as it traded at N208 from the N191.50 it sold for on Monday, Jan. 19. The rate has made the naira to lose N16.50 within five days. The CBN’s website, however, put the Naira against the dollar at N167.50, while the Pound sold for N253.20 and the Euro stood at N193.89S. The development has resulted into speculation in the market and caused ripple effects on other currencies.
A some Bureau De Change and Black Market operators in Lagos, said that they could not give rates to the Pound Sterling and the Euro. Dealers who preferred anonymity said that there was scarcity of dollars in circulation. They said that the Central Bank of Nigeria (CBN) had stopped selling forex to the Bureaux De Change, since last year. The dealers added that the recent review of trading positions for the forex trading positions of banks to 72 hours, also contributed to speculation in the system. The effect, they added, was that the naira could depreciate further by next week. The CBN in November 2014 devalued the Naira to N168 to the dollar.
Credit:
Russia and China just agreed to a second major gas deal, worth slightly less than the $400 billion agreement reached earlier this year, according to Bloomberg.
The details of the deal mean Russia will supply China with another 30 billion cubic metres of gas every year for the next three decades through the Altai pipeline, a proposed pipe transporting the gas from western Siberia to China.
Earlier in the fall, Keun-Wook Paik at the Oxford Institute for Energy Studies said this kind of deal would be “Putin’s revenge,” according to the Financial Times.
Many analysts see the move as evidence that Moscow is pivoting away from reliance on European customers and toward East Asia, where relatively rapid economic growth should prop up demand.
It’s also a political move, as relations with the rest of Europe have become increasingly cold after Russia’s invasion of Ukraine, and the tit-for-tat sanctions between the European Union, United States, and Russia.
The value of the Russian rouble has collapsed recently as the price of oil has declined. Russia’s economy is dependent on oil, so the currency fluctuates with the oil price. The price declines in turn threaten Russia’s ability to meet its budget obligations and pay debt. In sum, the country faces an economic crisis if it can’t find new demand for oil and currency .
But the rouble is rallying against the dollar today. Here’s the US currency dropping by about 3% against the rouble after the central bank announced it would stop trying to defend the currency’s collapse.
The China deal helps both Russia and China lessen their economic dependence on the West. It also helps Russia get around the economic sanctions imposed by the West because of the Ukraine situation.
Curtailing the dollar’s influence fits well with China’s ambitions to increase the influence of the yuan and eventually turn it into a global reserve currency. With 32 percent of its $4 trillion foreign exchange reserves invested in US government debt, China wants to curb investment risks in dollar.
The quest to limit the dollar’s dominance became more urgent for Moscow this year when US and European governments imposed sanctions on Russia over its support for separatist rebels in Ukraine.
Credit: Business Insider
