The Nation Newspaper

Tag: Naira

  • Naira overvalued by 20% – IMF

    Naira overvalued by 20% – IMF

    The International Monetary Fund (IMF) on Wednesday said the naira is overvalued by 10 to 20 per cent.

    The IMF mission chief for Nigeria, Gene Leon, said the overvaluation of the naira is “somewhere to the tune of 10 to 20 per cent” and the country’s 2017 projections for non-oil revenues are more optimistic than the Fund’s.

    He also urged Nigerian authorities to increase tax levels to diversify its income.

    Leon said Nigerian authorities were concerned about the IMF’s earlier staff report’s view.

    The Fund warned that Nigeria economy needs urgent reform and the dangers of a volatile foreign exchange market.

    It outlined several failings in the government’s handling of the economy and could affect talks over at least $1.4 billion in international loans.

    But President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the IMF officials should explain the yardstick for their advice.

    He said what the IMF is technically saying was that the official rate of N306 to dollar should move to N360 to dollar.

    “The IMF and other agencies look at the bureau de change rate. That is why we are saying there should be special window for both entry and exit to encourage more capital inflows to supplement the foreign reserves and diversify dollar sources,” he said.

     

  • Naira weakens against dollar at parallel market

    Naira weakens against dollar at parallel market

    The Naira on Wednesday weakened against the Dollar at the parallel market.

    The Nigerian currency lost 8 points to exchange at N398, weaker than N390 recorded on Tuesday, while the Pound Sterling and the Euro closed at N485 and N415.

    At the Bureau de Change (BDC) window, the Dollar was sold at N362 to the dollar, while the Pound Sterling and the Euro closed at N483 and N430.

    Trading at the interbank window saw the Naira closed at N306.2 to the Dollar.

    Traders at the market said that they expected the Naira to appreciate by Thursday as BDCs gets additional dollar allocation from CBN.

    Meanwhile, Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), said that the additional injection of $10,000 by the CBN to BDCs would help to checkmate speculation.

    Gwadabe said that CBN’s action justified its determination to continue to strengthen the Naira and get it out of the grips of speculators and hoarders.

    NAN reports that CBN, last week, stated that it had increased the volume of Dollar sold to BDCs from 8,000 to 10,000 dollars bi-weekly.

    The apex bank hoped to stabilise the Naira exchange rate through its interventions at the foreign exchange market.

     

  • Naira bounces back after one-week depreciation

    Naira bounces back after one-week depreciation

    The Naira on Tuesday appreciated against the dollar at the parallel market after a sustained one-week depreciation, the News Agency of Nigeria (NAN) reports.

    The Nigerian currency traded between N380 (buying rate), and N390 (selling rate) stronger than N395 recorded on Monday, while the Pound Sterling and the Euro closed at N480 and N415 respectively.

    At the Bureau De Change (BDC) window, the naira was sold at N362 to the dollar, while the Pound Sterling and the Euro closed at N483 and N430 respectively.

    Trading at the interbank market saw the naira closed at N306.25.

    Traders at the market said that the intervention by the Central Bank of Nigeria (CBN) at the different segments of the foreign exchange market was driving the strengthening of the naira against the dollar.

    Meanwhile, Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON) had predicted the appreciation of the naira as BDCs set to receive more Diaspora remittances.

    Gwadabe said that the improved inflows of Diaspora remittances into the economy in spite of falling oil prices would fast-track rates convergence and unification.

    NAN reports that the CBN remained resolute in its efforts to boost liquidity at the interbank market and the BDC sector of the foreign exchange market.

  • Economy: Don predicts further drop in inflation rate

    Prof. Uche Uwaleke, a financial expert, has predicted a further decrease in the rate of inflation for March 2017 as it was the case in February.

    Uwaleke , the Head of Banking and Finance, Nasarawa State University, Lafia, made the prediction in an interview with the News Agency of Nigeria (NAN ) on Tuesday in Abuja.

    He hinged the decline on the continued appreciation of the Naira due to the interventions of the Central Bank of Nigeria (CBN).

    He said Nigeria’s currency would continue to appreciate if the interventions were sustained and urged the apex bank to ensure proper monitoring of the situation.

    “The headline inflation figure for March is likely to witness further drop year- on -year as we saw in the month of February.

    “The pass through effect of the naira appreciation will gradually manifest as time goes on especially if the interventions are sustained.

    ” The CBN should continue to monitor the situation, to ensure that the current effort of the apex bank at converging exchange rates was not undermined

    “Some banks are alleged to be making it difficult for importers with confirmed Letters of Credit to access Forex.

    NAN reports that Nigeria’s consumer prices increased by 17.78 per cent year-on-year in February  2017, following 18.72 per cent gain in the previous year.

    The inflation rate slowed for the first time in 15 months.

  • CBN continues forex liquidity boost with additional $240m

    CBN continues forex liquidity boost with additional $240m

    The Central Bank of Nigeria (CBN) on Monday continued boosting the country’s foreign exchange liquidity with 240 million dollars, part of which 150 million dollars will go to dealers in the interbank wholesale window.

    Those who stand to gain from the sales through the interbank wholesale auction window include manufacturers, importers of aggro-machineries, plants and critical raw materials.

    The Bank’s Acting Director, Corporate Communications, Mr Isaac Okorafor in a statement, said that the bank also released 90 million dollars to meet requests for invisibles such as travel allowances, medical and school fees.

    He said that henceforth, the apex Bank would sell 10,000 dollars only to low-end Forex dealers once a week rather than the bi-weekly sales it announced earlier.

    He said that the CBN had adjusted BDC sale days to Tuesdays only, to reduce logistic difficulties.

    According to Okorafor, the CBN has also directed all banks to pay cash over the counter to desiring foreign exchange customers to further ease the access of customers.

    He further urged customers to report any un-cooperating bank to the CBN through available platforms.

    The CBN, in the recent months, has made offers and releases of over 2 billion dollars to the inter-bank foreign exchange market in its bid to sustain Forex supply to different categories of users.

    Last week, the Naira began to weaken against the dollar, which was attributed to alleged hoarding of the dollars by commercial banks, in spite of receiving over 200 million dollars.

    The Naira on Friday closed at N394 to a dollar.

    It, however, later showed signs of recovery, when it sold at N388 to a dollar on Monday in Abuja. (NAN)

  • ‘Why Naira falls despite CBN’s intervention’

    ‘Why Naira falls despite CBN’s intervention’

    President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, has blamed the recent depreciation of naira on speculators’ onslaught and resistance by the banking industry.
    Gwadabe told the News Agency of Nigeria (NAN) yesterday in Lagos that the refusal of some banks to sell the invisibles such as personal and business travel allowances frustrated naira recovery.
    The ABCON chief said that the CBN had recently accused the banks of frustrating its policies.
    He said it was ironical that the naira started losing strength in spite of the CBN’s review of the rates from N375 to N360 to a dollar.
    According to him, the naira started trading on Monday with a promising outlook for sustained strength against the dollar and other currencies, but it began to somersault at the middle of the week.
    “The naira ended deeper northward to close at N394 to a dollar on Friday, translating to 10 per cent depreciation of what was recorded during the week,’’ Gwadabe said.
    The association president said that the removal of disparity in applicable exchange rates among the BDCs, Travelex and the banks should have strengthened the nation’s currency.
    The financial expert said: “CBN’s knack for last minute solution as recent development has shown, accounted for the misfortune of the naira at the foreign exchange market.’’
    Gwadabe said that the battle for the soul of the naira would be won if the CBN could boost liquidity to the BDCs for effective unification of rates.
    “It is evident that the injection of liquidity to the interbank market rather than the BDC sub-sector is not effective and transparent for sustained FOREX rate convergence and unification.
    “Statistics from the CBN shows that about 20 banks get 80 million dollars weekly for invisible transaction as against the 20 million dollars weekly for over 3000 CBN licensed BDCs nationwide.
    “The CBN should enhance public awareness to guide end users on FOREX availability and applicable exchange rates.
    “The CBN should diversify the buffers from oil proceeds to foreign investors inflows and Diaspora remittances,’’ Gwadabe said.

  • Why Naira value keeps falling in spite of CBN’s intervention

    Why Naira value keeps falling in spite of CBN’s intervention

    Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON), has blamed the recent depreciation of naira on the speculators’ onslaught and resistance by the banking industry.

    Gwadabe told the News Agency of Nigeria (NAN) on Saturday in Lagos that the refusal of some banks to sell the invisibles such as personal and business travel allowances frustrated naira recovery.

    The ABCON chief said that the CBN had recently accused the banks of frustrating its policies.

    He said it was ironical that the naira started losing strength in spite of the CBN’s review of the rates from N375 to N360 to a dollar.

    According to him, the naira started trading on Monday with a promising outlook for sustained strength against the dollar and other currencies, but it began to somersault at the middle of the week.

    “The naira ended deeper northward to close at N394 to a dollar on Friday, translating to 10 per cent depreciation of what was recorded during the week,’’ Gwadabe said.

    The association president said that the removal of disparity in applicable exchange rates among the BDCs, Travelex and the banks should have strengthened the nation’s currency.

    The financial expert said, “CBN’s knack for last minute solution as recent development has shown, accounted for the misfortune of the naira at the foreign exchange market.’’

    Gwadabe said that the battle for the soul of the naira would be won if the CBN could boost liquidity to the BDCs for effective unification of rates.

    “It is evident that the injection of liquidity to the interbank market rather than the BDC sub-sector is not effective and transparent for sustained FOREX rate convergence and unification.

    “Statistics from the CBN shows that about 20 banks get 80 million dollars weekly for invisible transaction as against the 20 million dollars weekly for over 3000 CBN licensed BDCs nationwide.

    “The CBN should enhance public awareness to guide end users on FOREX availability and applicable exchange rates.

    “The CBN should diversify the buffers from oil proceeds to foreign investors inflows and Diaspora remittances,’’ Gwadabe said.

    He urged the CBN to sponsor a bill for an act of the National Assembly for naira convertibility in West Africa, as part of the solutions to full recovery of the naira.

    Gwadabe said that naira was currently a means of exchange in about 15 countries in Africa.

    He urged the Federal Government to increase security surveillance at the nation’s airports and land borders to checkmate illegal foreign cash evacuation.

    NAN reports that the naira ended the week on a negative note, eroding the 12.36 appreciation it recorded in its trading last week.

    The Nigerian currency appears to be on trial again, as experts argue that winning the battle for the soul of the naira requires more than pulling the monetary policy lever.

    They called for a blend of fiscal and monetary policy and indeed patriotism from all Nigerians to save the naira from further sliding. (NAN)

  • Dollars: High demand raises rate to N380

    Dollars: High demand raises rate to N380

    Increasing demand for the dollar at the parallel market on Thursday resulted in the rise of the greenback currency to N380 from N370 on Wednesday in Abuja.

    The News Agency of Nigeria (NAN) reports that the Naira also depreciated against the Euro, exchanging at N400, from N390 on Wednesday.

    The Naira, however, appreciated against the Pound Sterling, trading at N465 from N470 on Wednesday.

    A Bureau de Change (BDC) operator, who preferred anonymity, attributed the rise in the dollar exchange rate to the present high demand for the currency.

    He said high profile customers had begun going to the parallel segment to deposit in advance for available foreign exchange.

    “The demand at the black market is still high. You will think that it will reduce since the banks are now giving BTA to customers, but the reverse has been the case in the last two days.

    “This is a problem because price of commodities will not go down if the BDCs and parallel market cannot meet the demand.”

    Another operator, located at the popular Zone 4 area of Abuja metropolis, on anonymity, said that the market might not stabilise if the CBN did not increase Forex supply to BDC segment.

    “We got dollars from the CBN today at N360 as promised. However, 8,000 dollars per BDC in a week is too small. This amount needs to be upped to at least 50,000 dollars per week,” he said.

    With the losses recorded by the local currency in the last 24 hours, analysts say that the CBN needs to review its present strategy if it is to achieve its objectives of an exchange rate convergence.

    The CBN on Tuesday slashed the rate at which it sold forex to BDCs in Nigeria to N360 and directed the BDCs to sell to end users at not more than N362 to a dollar.

    This came barely 24 hours after the CBN’s directive to Deposit Money Banks (DMBs) in the country.

    The apex bank directed all DMBs to sell dollars obtained from it to retail end-users at not more than N360 to a dollar for invisibles such as school fees and medicals. (NAN)

  • CBN to sell dollar to banks at N357, directs banks to sell at N360

    CBN to sell dollar to banks at N357, directs banks to sell at N360

    The Central Bank of Nigeria (CBN), on Monday said it would sell dollars to banks at N357 and direct them to sell to their customers at N360 with immediate effect.

    The apex bank, however, said the new rate would be for only customers’ basic travel allowance, school fees and medical treatment.

    In a statement issued in Abuja, the bank’s acting Director, Corporate Communications, Mr Isaac Okorafor, said 100 million dollars had been offered to authorised FOREX dealers to meet the requests of genuine customers.

    He further said all banks had also been directed to immediately post the new rate on electronic display boards in the banking halls of their branches.

    Okorafor said that examiners from CBN would visit banks to ensure the new rates were implemented, with immediate effect.

    The CBN spokesmen reiterated the bank’s directive to all banks to process and meet the demand for Travel Allowances (TA) by end-users within 24 hours of such application.

    He also said that applications for school fees and medical bills were to be approved by banks, within 48 hours of such application.

    Okorafor stressed that the new move was aimed at further easing access of genuine end-users of FOREX and prohibiting banks from selling foreign exchange funds meant for invisibles to Bureau De Change (BDC).

    According to him, all banks will receive amounts commensurate with their demands per week, which will be sold to customers who meet the basic documentary requirements-visa and flight ticket.

    He, therefore, urged customers to report any erring bank to CBN for investigation and appropriate sanction.

    Meanwhile, the naira continues to appreciate against the dollar at the black market, selling at N375 to a dollar, N420 to a Pound Sterling and N405 to one Euro.

    A FOREX operator in Abuja, who did not want his name mentioned, urged CBN to lower the price it was selling to BDCs as well before the next bid on Thursday.
    According to him, this is necessary to ensure level playing field for all foreign exchange dealers.

    NAN reports that CBN sold to BDCs at N390, expecting them to sell to end-users at N400.
    However, analysts said that with the current crash in prices, this might no longer be visible. (NAN)

  • Bureaux de Change at risk as naira gains more muscle

    Bureaux de Change at risk as naira gains more muscle

    Business seems bad for Bureaux De Change (BDCs) — no thanks to the naira’s new strength that has hit them with heavy losses.

    The naira has strengthened below N381 to the dollar, the rate at which BDCs buy International Money Transfer Operators (IMTOS) cash from the Central Bank of Nigeria (CBN).

    The naira exchanged at N375 to the dollar in the parallel market at the weekend.

    It is tipped to gain more  within the week as the CBN sustains dollar interventions in the interbank market.

    About $1.5 billion has been injected into the interbank market since February when the interventions started.

    Association of Bureaux De Change Operators of Nigeria (ABCON) President Aminu Gwadabe, who hinted of some  BDCs likely closure  after losing N130 million within the week, said the losses came from the disparity in applicable exchange rates among players in the market. He, therefore, called for rates harmonisation to give all players a level playing field.

    According to him, the public has refused to buy foreign exchange from BDCs for invisibles, such as medicals, school fees, and personal and business travel allowances, at a rate above N375 to the dollar.

    Commercial banks are selling the dollar for invisibles at N375. The parallel market rate closed at N380 last week. The BDCs, Gwadabe said, were at the receiving end of the market because they bought dollars at N381 and sold at N399, which is far higher than even the parallel market rate.

    “All the banks’ selling rates are higher than even the purchasing rates of BDCs, let alone our selling rates. No one is presently buying from the BDCs. I managed to sell only $4,000 last week at N385, how are we going to survive?”, he asked.

    “The development has been communicated to the CBN and relevant agencies for intervention and the CBN is giving it its attention. If the scenario is not reversed immediately, the CBN licensed BDCs of over 3,000 with 30,000 workers  will be technically edged out of the market,” he said.

    Continuing, Gwadabe urged the CBN to provide a level-playing field for all operators, because they are all operating within same market, and selling the same product.

    Gwadabe said once the BDCs are no longer in the foreign exchange business, currency speculators will take over the market and that will not be good for the naira.

    Stakeholders hope that the sustenance of the CBN’s efforts at the interbank market will further drive down the value of the dollar.

    The naira has appreciated by 13 per cent in the parallel market in the last one week. The currency traded at N440 last Monday. It closed at N380 to the dollar at the weekend.

    Experts have praised the CBN for its intervention at the foreign exchange market. They urged the apex bank to eliminate the multiple rates in the market.

    As the naira continues to appreciate, experts say it is necessary for the CBN to adjust applicable rates in various segments of the market in the overall interest of the economy.

    The CBN said yesterday that the dollar would be weakening further this week as it plans yet another round of interventions in the interbank market. It plans to pump in more dollars into the interbank market to meet the demands of wholesale and retail customers as well as strengthen the value of the naira against other international currencies.

    The planned move by the CBN, sources say, will further firm up the naira against other currencies as the exchange rates of the greenback and the United Kingdom Pound Sterling continue to move southwards.

    The Euro and the Pound exchanged at the parallel market at the weekend at N405 and N475. The figures will further nosedive this week, according to experts.

    The Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, confirmed the plan to inject more foreign exchange into the market.