Exchange rate: Naira appreciates

As at today, March 23, 2017, Naira is being sold at N410 to a dollar.

Naira depreciates as central bank moves to intervene again

The naira on Wednesday depreciated sharply to N465 per dollar in the parallel market due to upsurge in demand for dollars importers travelling to China.

Investigations revealed that the parallel market exchange rate rose from N448 per dollar on Tuesday to close at N465 per dollar at the close of business on Wednesday, indicating N17 depreciation.

CBN Takes Battle to Speculators, Pumps Additional $350m to Energise Naira

As part of its resolve to sustain the positive momentum in the foreign exchange (FX) market, the Central Bank of Nigeria (CBN) again pumped additional $350 million into the market this weekend.
This will take the total amount supplied to the market by the central bank this week alone to a total to $570 million and may further crash the value of the dollar. The Naira traded between N450 and N460 to a dollar at some parallel market points in Lagos.
The move, which is part of the central bank’s strategy, is expected to further strengthen the value of the Naira.

CBN sells $180 million forex to boost liquidity

The Central Bank of Nigeria (CBN) yesterday released additional $180 million to the forex market to further ease business transactions in the country.

The intervention was done in two phases – an $80 million offer for Personal Travel Allowance (PTA), school fees and medicals at the inter-bank market and $100 million Wholesale Forwards Market sell, which by the new policy, is reduced to maximum of 60-day tenor.

Dollar falls to N470 at parallel market

The naira has been gaining steadily against the U.S dollar in three days of trading at the parallel market. 
The dollar sold for N510 on Tuesday, dropping to N505 Wednesday and fell to about N470 at the end of trading yesterday as more people trooped to the market to sell their foreign currency.

Low demand for dollar forces naira up at parallel market

The low demand for dollar at the parallel market on Wednesday forced naira to appreciate further against dollar, the News Agency of Nigeria reports.

NAN reports that the Nigerian currency gained N5 in Lagos to exchange at N460 to a dollar from N465 recorded on Tuesday.

Also, the Pound Sterling and Euro closed at N560 and N500 respectively.

At the Bureau De Change window, the dollar was sold at N385, being the Central Bank of Nigeria controlled rate.

Also, the Pound Sterling and Euro traded at N560 and N503 respectively.

However, the naira weakened against the dollar at the interbank market, losing N2.49 to close at N307.26 against N305.27 recorded on Tuesday.

Traders at the market said that the demand for the green back was low due to the political situation in the US.

Harrison Owoh, a BDC operator, said that stakeholders in the market were painstakingly watching the political situation in the US and its effect on the country’s economy.

Owoh said that in the coming days, the demand for the dollar was likely to remain low until the successful transition from a Democratic to a Republican Government in US.

NAN

Naira crashes to all-time low of N375 to dollar

Nigeria’s foreign exchange market may have taken a new turn as a rare movement in exchange rate happened between Monday and yesterday with massive swing in the value of Naira in the interbank official market against relative stability in the parallel market.

At the interbank market yesterday, Vanguard learnt banks were forced to reverse their high bid rates to rescue the Naira from a massive depreciation of almost 23 per cent to all time low of N375/USD against the average N308/USD it had traded consistently for over two months.

Reuters had reported that the official trading platform, FMDQ Plc, confirmed a single trade worth USD10,000 had been made at a rate of N376.63/ USD early on Tuesday.

However, by the close of trading, it was forced back to N305 with dealers claiming the rate was false. The currency had traded within a band of N304 and N308 to one US Dollar for some months now before dropping to N310 last weekend.

But surprisingly, parallel market has remained stable with the local currency appreciating marginally against the US Dollar, closing at N465/USD against N470 last weekend. The local currency had recovered from a low of N490/USD in the parallel market in September this year.

Usually depreciation in the official interbank window is followed by a corresponding depreciation in the parallel market windows, while in many instances the parallel market depreciates even when there is stability in the interbank window. This is the first time parallel market would be stable while interbank depreciates.

Vanguard investigations revealed that uneasy calm had been the climate in the interbank market in the past two months when banks began to feel CBN was not transparent in managing demand and supply as well as placing remote controls over exchange rates.

Consequently, according to one of the foreign exchange dealers in a bank, several violations of the rules have been happening at the background, with banks trading the officially sourced foreign currency at rates far above the official interbank rate.

He explained that the situation could only be supressed for a while, adding that what happened yesterday was an unveiling of the true market situation.

He also expressed concern that the rate may be forced back to the controlled region, if it continues to trend in the direction of depreciation, which may hit N400/USD.

The development may be connected to the speculation that the latest spike in interbank rate was triggered by the purchase of USD60 million last week at N390/USD by a major bank, which in turn sold the foreign currency at parallel market rate of over N450/USD.

Though other banks have been involved in various unwholesome trades in foreign currencies at rates close to parallel market, the said transaction last week appeared too glaring, according to dealers.

However, no bank has been sanctioned by CBN for such transactions so far, a development which may have piled more pressure on the Naira, while encouraging more underground dealings.

The illicit trading in foreign currency is said to be boosting the earnings of banks who are engaged in it as spread between purchase and selling prices (profit margin) widened to over 20 per cent as against 2.5 to 3.0 per cent.

Naira appreciates against dollar

The Naira on Tuesday appreciated against the dollar in all the segments of the Forex market.

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 Segment saw the currency exchange at N385, the control rated of the Central Bank of Nigeria and at N564 against the Pound Sterling and N510 for Euro.

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

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

Gwadabe said that 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 had indicated interest in facilitating the repatriation of remittances from abroad.

(NAN)

Naira may not fall below 475

Economic and financial experts say the naira may not fall below 475 against the United States dollar between now and end of December.

They based the prediction on declining dollar demand and efforts being made by the Central Bank of Nigeria to boost supply of foreign exchange.

The experts spoke in separate interviews on the outlook of the naira.

“It appears the exchange rate has got to the peak, which is something around 470/dollar. I think  the naira may not go beyond 475/dollar between now and end of December,” a currency strategist at Ecobank Nigeria, Mr. Kunle Ezun, said.

He added that holidaymakers returning to Nigeria for Christmas would also make dollar supply to increase.

According to Ezun, this will reduce the currency volatility created by dollar scarcity.

The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said due to declining economic activities, demand for forex was gradually reducing.

This, coupled with efforts being made by the regulator to boost forex supply, will make the naira-dollar exchange rate to remain around the 470 mark in the coming weeks, according to him.

The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said efforts being made by the CBN to boost supply would make the naira to appreciate in coming months.

He said, “The CBN Governor, Mr. Godwin Emefiele, met with the International Money Transfer Organisations in London on Saturday. The government is trying to woo these operators to enable them to bring more forex into the country. This will boost supply. Already, the exchange rate which the IMTOs can sell dollars to the banks has been increased from 336 to 375.”

He added, “At the association level, we have created committees that will check sharp practices in the market. All these will yield result.”

Naira weakens to 470 on fresh dollar shortage

The naira tumbled to 470 against the United States dollar on Wednesday, down from 455 on Tuesday as fresh dollar shortage hit the official and parallel foreign exchange markets.

The local currency has been relatively stable, hovering around 455 against the greenback in the last one week.

This came after Travelex and First Bank of Nigeria Limited commenced sale of foreign exchange to Bureau De Change operators following the Central Bank of Nigeria’s approval.

Forex traders, however, said on Wednesdays that the scheme had failed to ease the biting dollar shortage in the country.

“What we get from Travelex is not sufficient,” one trader told Reuters, referring to the demand in the market.

At the official market, the naira closed at 305.50 per dollar, a level it had maintained for more than two months, supported by the CBN interventions.

Earlier, the CBN asked international money transfer operators to sell dollars directly to the BDC operators to boost liquidity and narrow the gulf between the parallel market and the official market rates.

Travelex sells around $15,000 to 1,000 retail currency outlets weekly, but the amount is a fraction of what is required to cover the demand from individuals and small businesses.

Dollar shortages have caused many firms to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global oil price, which accounts for 70 per cent of Nigeria’s budget revenue.

The CBN has struggled to support the naira as the nation’s external reserves continue to fall. Traders said the naira had been testing new lows as they tried to find thresholds where liquidity could begin to return.

Naira sustains recovery at forex market

The Naira on Monday sustained its recovery trajectory in all the major segments of the forex market, the News Agency of Nigeria reports.

The Naira gained five points to exchange at N455 to the dollar at the parallel market, from N460 it traded on Friday, while the Pound Sterling and the Euro closed at N545 and N490 respectively.

Trading at the Bureau De Change window saw the Naira exchanged at N380 to the dollar, while the Pound Sterling and the Euro exchanged at N558 and N507 respectively.

The Nigerian currency firmed against the dollar at the official interbank market as it closed at N305 to the dollar, from N307 recorded on Friday.

Abubakar Adamu, a currency trader, said that the impact of the sale of forex to BDCs by Travelex had forced the Naira to sustain its recovery trajectory.

Adamu noted that currency hoarders were also selling the forex at their disposal and that was easing the liquidity challenges at the market.

NAN recalls that Alhaja Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria on Friday, advised currency hoarders and speculators against continued hoarding of forex.

Gwadabe said that the resumption in the sale of forex to BDCs and the transparency in the sale would lead to drastic reduction in gap between the official rate and the parallel market rate.

The ABCON boss advised Nigerians to avail themselves of the services of BDCs as they were sure to buy forex at controlled CBN rate.

Naira now N420 against dollar at interbank market

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

The local currency closed at N316.24 to the dollar at the segment from N338.96 traded on Tuesday.

At the Bureau De Change (BDC), the naira exchanged at N413, N530, and N460 against the dollar, pound sterling and the Euro, respectively.

The naira, however, extended its losses at the parallel market, trading at N420, N535 and N461 against the dollar, Pound Sterling and the Euro, respectively.

The naira was traded at N418, N531 and N461 to the dollar, pound sterling and Euro, respectively at the parallel market on Tuesday.

Traders said that scarcity of foreign exchange was still taking toll on the market.

Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON), said the dollar rate at the parallel market was unacceptable.

“Evil forces at the market under the mask of speculators are profiting from the hike in the dollar rate.”

Naira to plunge further on high dollar demand

The naira is expected to plunge further against the United States dollar next week as dollar shortage intensifies; following the banning of nine Deposit Money Banks from the foreign exchange market by the Central Bank of Nigeria.

The CBN had, on Tuesday, banned nine banks from the forex market over their failure to remit the Nigerian National Petroleum Corporation’s $2.334bn to the Federal Government’s Treasury Single Account.

On Friday, the naira plunged to 412 against the dollar at the parallel market, down from 409 on Thursday.

Traders said even though the CBN continued to sell dollars daily on the interbank market, its efforts were considered weak and inadequate, Reuters reported.

At the interbank market, the local currency closed at 316.84 to the dollar on Thursday, slightly lower than the level it closed last Thursday.

Kenya’s and Uganda’s shillings are also seen easing next week due to importer dollar demand from energy companies, while the Zambian kwacha is seen firming, according to traders.

At 1010 GMT, commercial banks quoted the shilling at 101.30/50 to the dollar, compared with last Thursday’s close of 101.45/55.

“Because this is going to be the end-of-month week, I still believe there will be a good amount of (dollar) demand in the market. I have a lot of oil clients, a lot of general retail importers,” a trader at one commercial bank said.

Traders said they were also on the lookout for the central bank selling dollars. It did so on Thursday after the shilling weakened in reaction to an amended law that caps commercial lending rates.

The Ugandan shilling is seen shedding value as corporates in the energy sector and other import businesses display their typical end of month demand for hard currency.

At 0941 GMT, commercial banks quoted the shilling at 3,370/3,380, weaker than last Thursday’s close of 3,365/3,375.

“Typically we see a jump in (dollar) demand from fuel importers and some manufacturers … this will play out in the coming days,” said a trader at a leading commercial bank.

The kwacha is next week likely to remain firm supported by a government bond auction settlement on Monday and an anticipated inflow of hard currency to pay salaries and other month- end obligations.

At 1020 GMT on Thursday, the currency of Africa’s second-biggest copper producer was quoted at 10.0000 per dollar from 9.9121 a week ago, Reuters reported.

“Government bond settlement takes place on Monday and we could see dollar conversions from last-minute foreign investors. This together with corporate conversions as we draw closer to month end, could see the local unit hold ground,” the Zambian branch of South Africa’s First National Bank said.

The Tanzanian shilling is expected to trade in a tight band as dollar demand from importers is offset by central bank support.

Commercial banks quoted the shilling at 2,182/2,192 to the dollar on Thursday, barely moved from 2,181/2,191 a week ago.

“The shilling has been stable over the past two weeks. We expect stability in the market to continue, with demand and supply being fairly matched,” a trader at CRDB Bank, Moses Kawiche, said.

Ghana’s cedi is seen firm next week on improving forex inflows as offshore investors sell dollars to mobilise funds to buy domestic bonds.

The local unit was quoted at 3.9535 to the greenback at 1030 GMT on Thursday, down 3 per cent since January, according to Reuters data.

“The government has reopened a five-year (domestic) bond that is maturing on July 2021 and it is likely to lead to some forex inflows… I expect the cedi to regroup to the 3.9400-3.9550 range,” a Barclays Bank Ghana currency dealer, Jacob Brobbey, said.

(punch)

Naira hits all-time low at parallel market

The Naira reached at an all-time low of 412 per dollar on the parallel market on Friday.

This may not be unconnected to suspension of some banks from forex trading by the Central Bank of Nigeria, CBN.

Traders said some bureau de change operators have been finding it difficult to access their forex account and get dollar supply.

On Thursday, the naira had closed at 409 per dollar on the parallel market. On the inter-bank market, it traded at 315 compared with 305 the previous day.

Shares in some of the banks dropped by up to 7.8 percent.

Bank executives have been meeting central bank officials to resolve the forex issue as investors continued to dump their shares second day.

On the inter-bank market, the currency gained 0.2 percent to close at 305 naira to the greenback with traders attributing the rise to central bank dollar sale to prop up the unit.

It would be recalled that also during the week, the CBN settled $152.48 million of naira futures contracts it sold in June at an exchange rate of 279 naira per dollar, further draining its reserves, which is at its lowest in more than 11 years.

On Thursday, Naira traded at 365 to the dollar

Thomson Reuters data showed that the naira traded at an all-time low of 365.25 to the dollar on Thursday in a single interbank market trade of $1m.

Interbank trading started two hours after the market opened and offered the currency sharply lower against the dollar. A total of $13m had been traded by 1235 GMT.

The naira plunged to a record low and forwards rose, suggesting traders expect further depreciation, as the economy struggles amid a dearth of dollars.

Three-month non-deliverable forward contracts climbed by 4.1 per cent to 364.5 against the greenback, Bloomberg reported.

Contracts maturing in a year rose by 3.5 per cent to 403, also a record.

The local currency has slumped by 38 per cent since the Central Bank of Nigeria ended a 16-month peg of 197-199 per dollar on June 20.

The capital controls needed to defend the fix sent foreign investors fleeing and took the economy to the brink of recession.

The International Monetary Fund forecasts a 1.8 per cent contraction of the economy this year.

“There’s still a lot of demand for dollars,” Craig Thompson of Nyon, Switzerland-based brokerage Continental Capital Partners SA, said in a telephone interview.

“The central bank has been supplying them. They sold some at 309 on Wednesday to keep the rate down. They’ve been selling dollars most days to keep it going above 320 and have done their best to try and keep it closing around 310. Managing the exchange rate is difficult because there’s pent-up demand,” he added.

Local banks are unable to meet much of the demand for dollars, forcing their customers to the black market.

The naira trades at 394 per dollar at the parallel market, around 11 per cent weaker than the official rate.

“There is no liquidity” in the interbank foreign-exchange market, an analyst at Ecobank Transnational Incorporated, Kunle Ezun, said.

He said the CBN sold dollars on August 15 and 16 and would continue intervening.

“They won’t want to see this jump,” Ezun said. “They will come in, maybe tomorrow, to bring it down to 320 or 330.”

Naira falls to 393 per dollar

Naira

The Naira on Monday depreciated against the dollar at the parallel market.

The currency lost N3 to exchange at N393, from N390 posted on Friday; while it traded at N505 and N435 against the Pound and the Euro respectively

The naira appreciated at the official interbank market to close at N317.34, from N320.25 posted on Friday.

Traders at the market said that the demand for the greenback was still on the high side.

The market was eagerly awaiting the sale of forex by banks to BDCs during the week.

NAN

Why The Naira has Crashed so badly- CBN Gov. Emefiele

Godwin Emefiele

The Governor of the Central Bank of Nigeria, Godwin Emefiele has given his take as to why the naira has been in such a freefall in recent months.

The CBN governor claimed that the fall against the Dollar is mostly because Nigeria has nothing to export besides oil.

Emefiele said this during a career talk organised for the teenagers of Redeemed Christian Church of God (RCCG) at TEAP school, Abuja.

He was of the opinion that Nigeria’s over-dependence on oil created this situation and is the reason why the Naira is in such a precarious state.

He believes the only way for Nigeria to dig herself out of this hole is to diversify the economy and look at other revenue streams a move which he says the Federal Government has embarked upon.

He said, “Our currency is naira but there are lots of things we buy but we cannot use the naira.

“We have to use dollars but do we earn dollar? We earn dollar when we have something to sell to people who have dollar so we can gain in Naira.

“In Nigeria, the only thing we have is oil. So when the prices of oil fall, everything falls.

“We then have less dollars and in that case, those who want the dollar will then need more naira to be able to meet the demand.

“Those who did economics will know that the price is determined between supply and demand.

“So if the supply for dollar is very low and the demand for dollar is high, the price of naira will be low.

“So as a country, we should have more goods to sell and export so that we can have enough dollars for supply and the naira can grow.”