Tag Archives: naira

Breaking: Naira plunges again, falls to N412 per dollar.


The dollar exchanged for N412 on Monday at the Bureau De Change segment of the market.

This followed a temporary suspension of sale of forex to the Bureau De Change operators in the industry by the Central Bank of Nigeria.


The Association of Bureaux De Change Operators of Nigeria had made a request to the CBN to grant it market holidays, given the ongoing challenges faced in the local and global economies due to the impact of the coronavirus pandemic.

The CBN granted the BDCs two weeks market holiday as requested.

According to the BDCs, there had been drastic decline in demand for forex due to the impact of the COVID-19 on the economy, as businesses were down and many people were not travelling.

The naira had also suffered setbacks as a result of crude oil price that fell drastically in the international market, which raised speculations among the BDC operators and Nigerians in general


#Newsworthy…

N380 forex rate per dollar not devaluation of Naira – CBN.


Governor of the Central Bank of Nigeria, Mr Godwin Emefiele on Saturday clarified that the recent jump in foreign exchange rate to N380 to a dollar is not a devaluation but an adjustment.

According to Mr Emefiele, the apex bank has the responsibility to see to the adjustment in the Naira, insisting that the bank has no hand in what happens in the Investors, Exporters and End- users window.

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CBN technically devalue Nigeria Naira.

The CBN had issued a circular to all banks and Bureau De Change on Friday, advising that the BDC should not sell the Dollar more than N380/1USD to end-users.

The Central Bank of Nigeria has the responsibility to see to the adjustment in the currency; what you have seen is an adjustment in currency and we have been accused that we have a hand, we don’t have a hand, Emefiele said.


We allow the I&E window, which is the dominant market to dictate the exchange rate in the market.

At this time the CBN provides FX in that market at 380, anyone who has higher than the 380 can go ahead, but it should be available in the market to fund the domestic market.

He added that the new rate is only an adjustment, but in economics and foreign exchange management language, it is not a devaluation, he maintained.


#Newsworthy…

Nigeria’s refusal to devalue naira to fail again.


Four years after Nigeria tried and failed to stop its currency from collapsing, Africa’s biggest crude producer is again reacting to this oil crisis the same way it did in the recent past.

It worked out badly then as oil revenues, which account for 90% of foreign-exchange earnings, failed to rebound in time — leading to a depletion in the central bank’s fire power to defend the naira. It will likely fail again, if the West Africa nation sticks to the same template.


A surge in supply after OPEC failure to agree on production cuts with Russia has combined with reduced demand as the coronavirus pandemic disrupts economies globally. This means crude prices will remain low far longer than the central bank’s dwindling reserves can support the currency, which has weakened the least among major oil producing countries in 2020.

The naira weakened slightly last week after crude prices crashed, but since has remained largely stable. Nigeria’s President Muhammadu Buhari considers a stable naira as a keystone in his plan to bolster and wean the economy off oil. In a rare public acknowledgment he indicated that the pandemic could trigger a foreign exchange re-alignment after he met with his new economic advisory council, according to a statement emailed on Thursday.


Buhari agreed with the council, led by orthodox economist, Doyin Salami, that “tough economic decisions” may be needed to face the crisis,the presidency said . But the central bank, which has kept the currency in a quasi-peg to the dollar since mid-2017, has said it has no plans for a devaluation and threatened to investigate any local currency dealers suggesting otherwise.

“The administration will fight tooth and nail to avoid a devaluation in the short-term,” said Malte Liewerscheidt, vice president at Teneo Intelligence in London.


The reason — Nigeria’s import dependent economy has seen inflation accelerate to a 22-month high in February and could rise even faster if the currency weakens. Despite being oil rich, the West African nation imports almost 100% of its gasoline due to mismanagement of its domestic refineries. The fuel is then sold at subsidized prices to Nigerians. A weaker naira would raise the cost of those subsidies, which already consumes a chunk of government revenues at almost $2 billion a year.

The central bank has blamed speculators for any weakness in the currency and the Economic and Financial Crimes Commission said its agents are raiding hotels and bureau de change outlets to arrest offenders hoarding foreign currency, a tactic used after crude prices crashed in 2014.


The regulator “is poised to apply the toolbox developed during the 2014-16 oil price crisis,” said Liewerscheidt. “Providing high yields and preferential foreign-exchange access to portfolio investors while curbing demand by other market players through measures such as import bans and rationing.”

The local currency traded at 368 per dollar as at 4.30 p.m local time on Wednesday, about 1.9% weaker since the oil price crash. Prices for 12-month forward contracts have risen to 479 per dollar, suggesting investors see the naira falling 25% in that period.


The majority of investors and analysts surveyed by Bloomberg believe the naira will eventually be devalued by as much as 15% in the third quarter.

Reverting to past measures, Central bank Governor Godwin Emefiele plans to tighten capital controls by banning forex for hand sanitizers needed to curb the spread of the coronavirus, adding it to dozens of items already barred from accessing foreign exchange.


“Active management of foreign-exchange allocation could create scarcity and delays in allocation which will inevitably push importers to seek dollars at the unofficial segment,” Lagos-based Nova Merchant Bank said in a note to clients on Tuesday.

However, foreign-currency reserves have decreased by 20% in the past two years to the lowest since November 2017, giving little room for the nation to support the naira.


Goldman Sachs Group Inc. said last week it would take an exchange rate of 600 naira per dollar for Nigeria to generate a healthy current-account surplus at today’s oil prices.

A sustained period of low crude prices will weaken dollar liquidity and elevate banks asset risks, Moody’s Investors Service said.
Average yields on naira government bonds have surged 709 basis points to 12.6% since January, according to data compiled by Bloomberg, signaling outflows resulting from falling risk appetite of investors.

The bearish sentiment is expected to continue as coronavirus fears persist, Johannesburg-based Rand Merchant Bank said in a note on Wednesday.

“The market still grapples with limited dollar supply —as the oil price remains at abysmally low levels,” according to RMB.


#Newsworthy…

CBN technically devalue Naira to N366.7 per dollar.

between N366.7 to N380.20 per dollar


The COVID-19 pandemic, which led to a sharp slump in crude oil prices globally, has forced the Central Bank of Nigeria (CBN) to technically devalue the Naira exchange rate on the Investors and Exporters’ (I&E) window from the N366.7 to N380.20 to a dollar.

Currently, crude oil price has crashed to less $30 per barrel.


Sources at the apex bank made the disclosure.

More so, trading data from Bloomberg read: “Dear all, kindly be informed that the CBN has moved the rate of FX sales to FPIs from N366.70 to N380.20/$. We will advise as developments unfold.”

Bloomberg terminal further showed that there was a very low appetite for the CBN open market operations (OMO) instruments offered on Friday, suggesting that foreign portfolio investors are watching to see how things pan out.

As the coronavirus spreads, stock prices have been in free fall and oil prices are plummeting too.


#Newsworthy…

CBN denies to have devalue Naira, threatens sanction.


The Central Bank of Nigeria has denied rumours that it had devalued the naira, the country’s currency.

According to the apex bank, fraudulent speculators were behind the artificial scarcity of the United States dollars in parts of Nigeria, thereby jacking up the exchange rate and weakening the naira.


In some parts of the country earlier this week, the dollar sold for N375, a situation that caused a bit of rancour in the financial market across Nigeria.

However, reacting to the development, the CBN called on members of the public not to panic because the value of the naira to the US dollars had not depreciated.


In a statement by Director, Corporate Communications, Isaac Okorafor, the apex bank said, “The Central Bank of Nigeria wishes to note with displeasure the rumours and speculative activities of unscrupulous players in the foreign exchange market, borne out of the impression that the CBN is on the verge of devaluing the naira and triggering panic in the FX market.

“These rumours are false, unwarranted and calculated to serve their dubious and selfish ends.


“We therefore wish to state that we have begun a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit and related agencies to uncover the unscrupulous persons and FX dealers creating this panic, and the full weight of our rules and regulations will fall on them, including but not limited to being charged for economic sabotage.

“The size of Nigeria’s foreign exchange reserves remains robust and comfortable, given the current realities of Nigeria’s genuine and legitimate FX demand.


“As such, the CBN remains able and willing to meet all genuine demands for foreign exchange for legitimate transactions.

“In light of current circumstances and macroeconomic fundamentals, the CBN has not devalued the naira.

“Consequently, the CBN will invoke the full weight of applicable sanctions on any persons and authorised dealers found to be involved in such disruptive and speculative market behaviour.”


#Newsworthy…

Man allegedly deposited N17m with new N2000 & N5000 notes (See photo)


Even though the central bank of Nigeria is yet to release new naira notes, a video of man reportedly depositing the sum of N17million with new N5000 and N2000 naira notes in a bank has hit the internet.

In a corresponding video which has since surfaced on the internet, a woman who probably recoded the rare scenario revealed how the man came to the unnamed bank with the bundle of new 5000 and 2000 naira notes to deposit it, stating that he said the money is N18 million in total.

However, she said upon counting the money, it was discovered to be N17 million.

It is yet to be known how he came into possession of the said notes, the lady in the video who appears to be a staff of the bank, said the man identified himself as a madman.

Madman deposits ₦18m in the bank using the new 5000naira and 2000naira notes🙀 pic.twitter.com/qiulC71kvG


#Newsworthy…

Goodbye to ‘Naira Notes’ as Nigeria set to launch new Currency in 2020.


In 2020, Nigeria will be saying bye bye to the Naira as its official currency, as it adopts a new currency called the ‘Eco’.

The ‘Eco’ is a single currency that will be adopted by West African countries as from next year as part of the sub-region’s greater structural reforms.


Here are 7 things you should know about the ‘Eco’ before it is officially adopted by the Federal Republic of Nigeria;

17 West African countries will adopt the Eco currency when it will be released. These countries are Benin Burkina Faso, Cape Verde, Cote d’Ivoire (Ivory Coast), The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Saint Helena, Senegal, Sierra Leone and Togo.

The Eco is expected to be adopted on the first of July 2020, but since the concept arose in 2003, the target launch date for the currency has been postponed several times: in 2005, 2010 and 2014. Countries in the franc region and other West African nations such as Nigeria and Ghana, which have their own currencies, have for decades debated creating their own currency, the Eco.


With the adoption of the Eco next year,

French speaking West African countries will ditch the CFA Franc, known as “Colonies Francaises d’Afrique,” which was established in 1945 and pegged to the Euro since 1999.

The official symbol for the Eco will be ‘Ec’.


According to reports, the Eco notes will feature great African legends and showcase features of West Africa.

The official bank for the sub-region’s currency will be known as the Central Bank of West Africa (CBWA).

There is no official value for the Eco currency yet.

A specific launch date for the Eco has not yet been announced but it has been speculated that January 2020 is when the single currency will be launched.


#Newsworthy…