The Nation Newspaper

Tag: Naira

  • Naira stabilises at N490/$

    Naira stabilises at N490/$

    The Naira on Tuesday stabilised at N490 to a dollar at the parallel market in spite of speculations that it would depreciate to N500 to a dollar by the end of 2016, the News Agency of Nigeria (NAN) reports.

    The Pound Sterling and the Euro also closed at N585 and N505 respectively.

    At the Bureau De Change (BDC) window, the dollar exchanged at N399, CBN controlled rate, while the Pound Sterling and the Euro traded at N598 and N510, respectively.

    Trading at the interbank market saw the dollar closed at N305.

    Traders at the market said that Forex scarcity was still having its toll on the market.

    NAN reports that in spite of the one billion dollars backlog of Forex cleared by the CBN, the Naira has remained within N490 to a dollar.

    Meanwhile, Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON) said that the figure was a far cry from the monthly Forex demand in the country.

    “The $1b inflow is far less than what the economy consumes. The entire FX market is over 20 billion dollars monthly.

    “The cleared backlog of the CBN are funds that came through the FMDQ OTC foreign investment that came into the economy over time and the CBN has no option than to redeem it, to close the increasing gap of investors’ confidence,’’ Gwadabe said.

  • MINT fails to print small naira denominations

    The the Nigeria Security Printing and Minting plc (NSPM) has not printed the small naira denominations for about a year, causing the scarcity of the notes in the economy, the News Agency of Nigeria, said.

    The Central Bank of Nigeria (CBN) said that for a year now, it did not award contract for the printing of the notes, such as N5, N10, N20 and N50, which are usually done abroad, adding that the recently printed notes in circulation -N200, N500 and N1,000 , were produced by the NSPM.

    The NSPM produces currency notes and coins for the CBN and a wide range of security documents for the federal, state and local government establishments, commercial banks and blue chip companies.

    According to the NSPM website, the company has the ability to print over 40 million notes weekly.

    However, the sources said the high cost of printing banknotes was the reason the apex bank did not give contracts for their production.

    “The cost of printing N50 is almost the same as N1,000. Printing small denominations costs more than the value and with the present economic situation, it makes sense to print higher notes which can be done locally by NSPM.

    A worker at the First Bank Plc, disclosed that throughout the 2016 festive seasons, there were hardly smaller currency notes to give to customers. “We usually request for cash from the CBN through our Cash Management Centre, but recently, we have not been able to get mints of N100 and below. “We had N50 at one point but it wasn’t in the quantity we are used to getting. We have been telling our customers who call to request for mints that the smallest currencies they can get is N200,” the worker said.

    A Political Economist, Jude Ndukwe, a said the implication of the situation was that prices of goods were likely to increase since there were no smaller currencies in circulation. “A bread seller is likely to increase the cost of bread from N350 to N400 simply because he does not want to deal with the difficult task of getting change.

    But the CBN Acting Director, Corporate Communications, Isaac Okorafor, denied the allegation that the apex bank had not contracted the printing of smaller denomination currencies since 2015.

  • Naira stabilises at N485 per dollar at parallel market

    Naira stabilises at N485 per dollar at parallel market

    The Naira on Friday remained stable at the parallel market, exchanging at N485 to a dollar.
    The Pound Sterling and the Euro closed at N602 and N515, respectively.
    At the interbank market, the Naira also remained stable at N305.50 to a dollar.
    Trading at the Bureau De Change (BDC) window saw the Naira sold at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro exchanged at N606 and N515, respectively.
    Traders at the market said that the scarcity of dollar persisted, leading to slow activities. (NAN)

  • Naira’s depreciation threatens adoption of ECOWAS single currency

    The adoption of a single currency among members of Economic Community of West African States (ECOWAS)  by 2020  is under threat, it was  learnt Thursday.

    The region noted that the depreciation of Naira has posed serious threat to the realization of the agenda.

    This was disclosed Thursday by members of the ECOWAS Macroeconomic Policy Committee on Multilateral Surveillance, during a two day technical meeting in Abuja.

    They noted that even when various policies have been introduced and at various stages of implementation in member states countries, the current economic situation in Nigeria has impacted negatively on the economy of member states.

    First to throw the bombshell was the Out-going Chairman of the ECOWAS Macroeconomic Policy Committee on Multilateral Surveillance, Ommy Sar Ndaiye, who noted that the depreciation of the value of the naira and other economic challenges facing member states, especially Nigeria are affecting the economy of the entire region and also the plans for the adoption of a single currency in the region.

    “The depreciation in value of the naira and other economic factors in Nigeria are affecting ECOWAS. We all know that whatever happens in Nigeria weighs heavily on our economies. If there are challenges there it would reflect on the region”, she said.

    While noting that the commission has made remarkable progress in its macroeconomic policies, Ndaiye also urged the committee to chat the way forward for the economy of member states.
    She therefore urged the committee members to look inward and find better ways to strengthen economic ties within the region.

    Also, Commissioner of the ECOWAS Macroeconomic Policy and Economic Research, Mamadou Traore lamented the vulnerability of the economy of member states.

    The meeting Traore said was aimed at reviewing the 2015 report, as well as monitor,  evaluate and make appropriate recommendations that would help revive the economy of member states.

    He stressed that “Despite efforts by the commission to strengthen the economy of ECOWAS, the economy is still vulnerable to external shocks”.

    The commissioner also urged member states to update their database on a regular basis on measures that drives economic growth and also furnish same to the commission for proper information.

    He said the 2015 report on the Macroeconomic convergence for the region showed a slowdown in growth of the economy when compared to 2014.

    Traore, identified factors such as lack of raw material, poor state of infrastructural development in member states countries and the depreciation in value of the naira as being responsible.

    The commissioner said since the deadline for the adoption of single currency is fast approaching, the committee should set agenda to look into the progress made so far as well as identify challenges that may hinder its smooth operation.

  • Power operators grapple with N809b shortfall

    Power operators grapple with N809b shortfall

    …Urges FG to review N20b CAPEX cap
    The Electricity Distribution Companies under the auspices of Association of Nigerian Electricity Distributors (ANED) Thursday complained that the N809 billion current shortfall of the operators does not encourage liquidity.

    Addressing journalists in Abuja, the association’s Executive Director, Mr. Sunday Oduntan, said that “the figure of the shortfall now is N809.8 billion in the whole industry.”

    He described it “as the revenue that is accruable to the industry that is not there, stressing that the regulators in the sector are very inconsistent and perhaps inexperienced.

    He recalled that the Nigerian Electricity Regulatory Commission (NERC) fixed its tariff late December 2015, but scheduled that the tariff should be effective on February 4 this year.

    This delay, according to him, caused a loss of N12.8 billion across the power sector value chain.

    He urged Nigerians to ask the government to state how to tackle the liquidity issue that the sector is now grappling with by giving assurance on gas supply, and seeing to the possibility of selling to local consumers of gas in Naira.

    Continuing, Oduntan said: “When you sell to me in dollar and I receive my money in Naira, it cannot work. You should look how best to factor these things such that at the end of the day, this thing will work. Not only selling in dollar, they are not selling at the rate recognized by the tariff. N197 is the allowed Naira /dollar exchange in MYTO 2015. That means I am not allow to sell my electricity based on the tariff computed on the bases of N197/$. So any increase in dollar is nobody’s business but my burden to carry.”

    The Executive Director submitted that there is need for help for the sector for if the DisCos die, transmission would die and generation would also die.

    He added that “now the problem we have is that there is a lot of outstanding liabilities to be paid. We are owing NBET, we are owing market operators. We have been unable to pay… Shortfall does not encourage liquidity.”

    According to him, the operators cannot continue to run a system that does not allow the re-engineering of their balance sheet.

    He urged the government to make way for the recognition of shortfall in the electricity market.

    Oduntan called on the NERC to do the needful by making provision for a tariff that reflects the current reality in the market.

    According to him, since handover of the entities to private sectors several regulatory setbacks have hindered the DisCos from meeting their targets in the performance agreements.

    He called for an upward review of the N20 billion Capital Expenditure (CAPEX) limit that the Federal Government has allowed the companies, stressing that it has tied the hands of the investors and hindered them from expanding their businesses.

    The implication of that cap in the CAPEX, said Oduntun, “they (government) needs to cap it at some point as they want to avoid tariff shock. If it is very high tariff will be very high, if it is very low, tariff will be very low. But if you are looking at the reality in the market, while we are taking decisions on these things. Under the MYTO, I am only allowed to spend a certain amount; N20 billion and that money is not enough.”

    He also called on government that: “We must do everything that will make the DisCos balance sheets bankable. If it is not bankable no banks will lend you money.”

  • Naira remains stable at interbank market

    Naira remains stable at interbank market

    The Naira on Monday remained stable at the interbank market, closing at N305.25 to a dollar.

    The News Agency of Nigeria (NAN) reports that the naira maintained its Friday rate against the greenback.

    At the Bureau De Change (BDC) window, the naira traded at N400 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro closed at N585 and N506, respectively.

    The naira also maintained its Friday rate of N473 to a dollar at the parallel market, while the Pound Sterling and the Euro sold at N585 and N505 respectively.

    Traders at the market blamed dollar scarcity for the woes of the naira.

    Since the launch of the flexible exchange rate policy, the naira has continued to struggle for survival, leading experts to interrogate the philosophy guiding the policy.

    However, stakeholders have not lost hope in the capacity of Diaspora remittances to change the fortunes of the naira as the Yuletide approaches.

  • Naira bounces back against dollar at interbank market

    Naira bounces back against dollar at interbank market

    The Naira on Wednesday appreciated against the dollar at the interbank market, the News Agency of Nigeria (NAN) reports.

    The Nigerian currency gained 50k to close at N304.50 compared to N305 it traded on Tuesday.

    At the Bureau De Change (BDC) window, the Naira was sold at N400 CBN controlled rate, while the Pound Sterling and the Euro traded at N565 and N500, respectively.

    Skeletal, but clandestine trading at the parallel market saw the Naira closed at N470 to a dollar, while the Pound Sterling and the Euro closed at N565 and N500, respectively.

    Traders said that dollar scarcity persisted in the market as dealers seek more unconventional ways of meeting the needs of their customers.

    NAN reports that the parallel market had been in the eyes of the storm as security agents were on the lookout for currency traders.

    The apex bank gave a nod to the ongoing crackdown on currency traders at its Monetary Policy Committee (MPC) meeting on Tuesday.

    Since the battle line had been drawn between the security agents and traders, dollar scarcity was expected to persist along the frontiers of the parallel market. (NAN)

  • Falling naira value takes toll on shopping

    The continued free fall in the value of Nigeria’s local currency, the naira, has taken a big toll on the purchasing power of the ordinary man on the street, Director, Professional Programmes, Pan Atlantic University, Isaac-Ogugua Ezechukwu has said.

    He said he recently stumbled upon a shopping list he made in the ‘80s within the pages of a book, adding that after reviewing the list, he became saddened at how deep the national currency, the naira, has eroded in value ever since.

    According to him, the list contained:

    • 1 tin of Garri N9.00
    • 1 olodo of Beans N5.00
    • 1 bottle of oil N2.20k
    • 1 packet of Sugar N0.50k
    • Measure of Salt N0.50k
    • Maggi N0.50k
    • Ogili N0.50k
    • Potatoes N2.00
    • Drinking cup N0.40k
    • Fish N3.00
    • Pepper N1.00
    • Two loaves of bread N1.40k
    • Transportation N0.20k

    Total            =                N26.20k

    He said: “This was typically a weekend shopping that would last me for a whole week till the following Saturday. Though I was a bachelor then, I was living with two cousins. The year was 1984; I was living at MazaMaza, a Lagos suburb and my shopping was usually at AlabaSuru.  Transportation was 10 kobo to and fro.

    “The question is: “How did the managers of our economy get to this level of devaluation in the purchasing power of our currency”? While it was easy to survive with just N30.00 in the 80s, it is difficult to survive with N10,000 a week this year for a family man.

    “The erosion in the value of naira has deepened the poverty level in the country. In 1984, minimum wage was just N125.00 but one could live with less than N30.00 a week as my shopping list has shown. This year, minimum wage is N18,000 a month but very difficult for a family man to live with just N10,000 a week. And whereas some of our politicians currently earn millions of naira every month, the servants earn N18,000 every month. In a country where up to 70 per cent of the population lives below poverty line, the concern of the politicians ought to be how to address the imbalance. Instead, our politicians are obsessed with how to amass wealth, including the new trend of owning private jets.”

    Ezechukwu argued that the purchasing power of any currency is indicative of the strength of the economy, stressing that no economy can be strong with the plundering of its resources by those who should protect such resources as is the case in Nigeria.

    “The erosion of the purchasing power of the naira testifies to how poorly our economy has been managed over the decades. Real growth must have positive impact on the purchasing power of the national currency while taking the majority of the citizens out of poverty line,” he said.

  • Naira appreciates against dollar

    Naira appreciates against dollar

    The Naira on Tuesday appreciated against the dollar in all the segments of the forex market, the News Agency of Nigeria (NAN) reports.

    The currency gained N44.95 to exchange at N305.27 to the dollar at the interbank market after its Monday’s record of N350. 22.

    At the parallel market, the naira gained N5 to exchange at N465 from N470 it traded on Monday, while it went for N565 and N510 against the Pound Sterling and the Euro, respectively.

    Trading at the Bureau De Change (BDC) Segment saw the currency exchange at N385, the control rated of the Central Bank of Nigeria (CBN) and at N564 against the Pound Sterling and N510 for Euro.

    Assessing the market, Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), said that the naira had prospects of further appreciation in the days ahead.

    He told NAN that the CBN was working with Nigerians in Diaspora to woo more remittances back home.

    According to Gwadabe, the CBN had a robust meeting with stakeholders and Nigerians in Diaspora at the weekend in London on way to boost liquidity in the foreign exchange market.

    He said that more International Money Transfer Operators (IMTOs) had indicated interest in facilitating the repatriation of remittances from abroad. 

  • Naira falls to N350/$ at interbank market

    Naira falls to N350/$ at interbank market

    The Naira on Monday fell freely at the official interbank market, the News Agency of Nigeria (NAN) reports.
    The naira exchanged at N350 to a dollar from N328 it traded last Friday.
    At the Bureau De Change (BDC) segment, the naira closed at N385 against the dollar, CBN rate, while the Pound Sterling and the Euro closed at N564 and N510 respectively.
    Trading at the parallel market saw the naira exchanged at N470 to the dollar, while the Pound Sterling and the Euro traded at N560 and N510 respectively.
    Traders at the market express hope that the naira would see better days as Diaspora remittances was expected to boost liquidity at the yuletide season.