Nigerian currency, the naira recorded a positive outing against the US dollar at the official foreign exchange market on Tuesday.
Details from FMDQ securities where Investors and Exporters (I&E) buy and sell officially shows that at the end of trading naira appreciated by 0.14 percent or 67 Kobo to close at N461.50/$1 compared with Monday’s value of N462.17/$1.
This occurred as the value of FX transactions at the official market window depreciated by 39.1 percent or $47.85 million. At the close of trades, the turnover for the session stood at $74.58 million compared with the $122.43 million recorded at the previous session.
Also, in the parallel market wing of the FX market on Tuesday, the Naira regained strength against the American Dollar after it gained N3 to sell at N750/$1, in contrast to the preceding day’s N753/$1.
But in the Peer-2-Peer (P2P) forex segment, the Naira showed no movement against the United States Dollar, closing flat at N761/$1 yesterday.
This same scenario played out in the interbank window of the market, where the domestic currency was flat against the Pound Sterling and the Euro at N555.40/£1 and N496.32/€1, respectively
On the very last day of this month, January 31, 2023, old naira notes of N200, N500 and N1,000 shall cease to be legal tenders in Nigeria. The Central Bank of Nigeria (CBN) has warned that there will be no extension of the deadline for the use of the old notes.
Following up on this, the CBN commenced an aggressive nationwide sensitization to update the people on the need to pay in all old notes into their bank accounts to help them beat the deadline.
Meanwhile, the CBN has said that old notes which are not paid into the banks before January 31, 2023, will become invalid. It said that the bank has taken steps to ensure that everyone is able to meet the deadline, by ensuring that firstly, no charges are imposed on customers who want to pay any amount of money into the bank, and that banks will open even on Saturdays to ensure that no one missed the opportunity of paying their old notes into the bank.
Last week, officials of CBN took time to move round many markets in Anambra State to sensitise the people both on the deadline, the security features of the notes, the quality and the dangers of not accepting the notes as legal tenders.
Early in January, there have been incidents of people rejecting the notes, maybe as a result of the ignorance of the changes, while some said the rejection was about the inferior nature of the notes, which they said was susceptible to being counterfeited.
Some traders who had spoken to 𝕹𝖔𝖇𝖑𝖊 𝕽𝖊𝖕𝖔𝖗𝖙𝖊𝖗𝖘 𝕸𝖊𝖉𝖎𝖆’s known Media during an independent interview, including an Awka based commercial driver, Mr Edward Ezediuno said: “All the new notes look fake already, so we are afraid that if they give us the fake ones, we will not be able to differentiate it with the authentic ones.”
There were incidents of many consumers having problems with traders, but the recent sensitization tour of markets in Anambra, and the complaints received, showed that the issue is no longer about the authenticity of the notes, but the availability. This may be because the CBN had insisted that there will be no grace period after January 31, and that Nigerians have no option other than accepting the new notes.
During the CBN sensitization exercise, which happened in major markets in Awka, Nnewi and Onitsha, DAILY POST monitored reactions of traders who were being sensitised about the new notes. Though a few traders still complained about the inferiority of the notes, the major complaints were about the availability and the high cost of getting the notes from black market retailers.
During a visit to the Onitsha Main Market, which is reputed to be the largest market in the entire West Africa, many traders who spoke to our correspondent complained of availability and quality of the notes. Mr Igwemba Uzor, a trader in the market removed a white handkerchief from his pocket to show the stains made on it by the N1,000 note.
“This white handkerchief was stained by the new naira notes. See the ink. One of my friends just asked that we try it, and this is the result. From what this note did to this handkerchief, I am sensing that if you wear white dress and you have the money on you, if rain beats you, or you sweat very well, the money can stain your clothes.”
In Nkwo Nnewi Spare Parts Market, traders sang a different tune. They welcomed the money, but protested that the notes are virtually unavailable in banks, and that they have made efforts to take their old notes to the bank, hoping that when they withdraw, they will get the new notes, but that has not always been the case.
A trader in the market, Pastor Frank Ejimbe accused CBN officials of playing politics with the new notes.
He said: “You people are doing business with the new naira notes. How can black market people have the new notes to the point that any amount you want, they can sell to you, but banks don’t have it. Does that make sense?”
Two traders, Mr. Nwabueze Igwe and Mr. Sylvester Ekweonu in the same market, expressed worry that commercial banks and Point of Sell Operators were still issuing the old naira notes to customers.
Nwabueze said: “We want CBN to be sincere about the introduction of the new notes. We need to know why each time we take old notes to the banks, it is usually the old notes that they use to pay us, when we come to withdraw.”
For two other traders, Mrs. Nkechi Ogbu and Mr. Solomon Ejike, the deadline was too short to mop up all the old notes in circulation across the country and appealed for the extension of the period.
“When we were young, the usual practice is that when there is a new currency, all the banks do is that once they get your old currency, you will never be able to get it again, because they pay the new currency. But today, banks receive the old currency as deposit and also pay out the old ones. How will they now mop up the old currency,” Mrs Ogbu lamented.
Meanwhile, Officials of the bank, including the CBN branch controller, Awka, CBN’s Director, Other Financial Institutions Department, Mrs Nkiru Asiegbu, and many others, who spoke to the traders during the sensitization exercise, harped on the deadline for the use of the old currency.
The officials visited several markets in the State, including: Agbo-Edo Market in Nnewi, Main Market, Onitsha, Tools and Allied Materials Market, Bridge Head, Onitsha, Odera Market in Awka and Building Materials Market in Nkpor.
Speaking at Tools and Allied Material Market, Bridge head Onitsha, Mrs Asiegbu said: “You must also strive to deposit all old notes of N200, N500, N1,000 before the last day of this month. We have met with heads of all commercial banks and directed that they begin the distribution of the new naira notes without further delay.”
As of the time of filing this report, the traders are still sceptical about meeting the deadline since they also draw old notes each time they make deposits.
Mr Tony Eze, a trader at Odera Market said: “They want us to pay our money into banks and wait for when new notes will be dispensed, not knowing that many people survive by making sales and taking the money to the market to purchase more goods. How can they now pay into the banks and leave their money there, waiting for when new notes will be available?”
However, the bank officials also explained that soon, banks who fail to pay customers with the new naira notes will be sanctioned, adding that there has been strict monitoring, to ensure that banks dispense the new notes through their Automated Teller Machines.
It was, however, gathered that the shortage of the new notes is deliberate, and meant as a policy that will curb the rising inflation in Nigeria, as the mopped up funds will never be released to the public again, while the new notes will also be scarce, and this will give the naira some prestige.
“If the naira becomes scarce, what it means is that less money will be chasing many goods, as against now that too much money is chasing less goods, because of the high volume of money in circulation,” a source said.
Following the January 31, 2023 deadline set by the Central Bank of Nigeria, CBN, to deposit all old notes, residents, especially businessmen and women across Kaduna State, have started rejecting the old notes for business transactions.
Residents have lamented the situation as commercial banks in the state still dispense old Naira notes. Our correspondent observed that some ATMs across the Kaduna metropolis still dispense the old notes against the directive issued by the CBN.
Miss Rebecca James, a food vendor, said several customers have started refusing to accept old currency notes because, according to them, it’s no longer accepted as legal tender.
“Each time I go to bush market, and transact business, villagers do not want to accept the old notes. But the new notes are scarce. I find it difficult to buy the quantities of foodstuff for resale,” she lamented.
The move by the Department of State Services (DSS) to arrest Central Bank of Nigeria (CBN) Governor, Godwin Emefiele may cause a further slip of the naira against the dollar.
In the suit, FHC/ABJ/CS/2255/2022, the security agency asked the Federal High Court in Abuja permission to take Emefiele into custody.
Justice John Tsoho did not grant the application. The Chief Judge said the DSS did not provide concrete evidence to substantiate its claims against the CBN chief.
Emefiele is accused of terrorism financing and economic crimes, though a coalition claims the plot is to keep him in solitary confinement ahead of the sack.
Since the news broke, Nigerians have been raising their concern about the fate of the naira, which is recovering from a recent free fall.
Though the current dollar-to-naira rate is about N745 on the black market, it nearly hit N900 sometime between October and November.
Individuals and business owners are now contacting Bureau De Change operators to get information on what to expect in the coming days.
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Sanni, an operator in Abuja, told DAILY POST that customers called him on Monday to purchase dollars due to uncertainty over Emefiele’s case.
Some social media users have also voiced fear about the naira weakening more due to a loss of confidence.
“Without recourse to the fact before the court, the presiding judge did a good job by denying the application of DSS to arrest Emefiele.
“The consequences of his arrest will be extremely grave on our economy, particularly the value of our currency, naira”, @skelly16th wrote.
It is unknown if the DSS will return to the court with another application and evidence that will convince the judge to approve Emefiele’s arrest, a major topic of debate.
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Carlo Ancelotti’s team successfully added to their four cups from 2014 to 2018, and their triumph meant European teams have won the past 10 editions of the tournament.
The naira on Wednesday exchanged at 445.83 to the dollar at the Investors and Exporters window, a depreciation of 0.01 per cent, compared with the 445.80 it exchanged on Tuesday.
The open indicative rate closed at N444.25 to the dollar on Wednesday.
A total of N127.78 million was traded at the official Investors and Exporters window on Wesnesday.
Meanwhile, Hassan Oaikhenan, a professor of Economics at the University of Benin, Benin-City, has attributed the depreciation of the naira to excess naira in circulation chasing the few dollars.
He urged the Central Bank of Nigeria (CBN) to limit the supply of the naira using the currency redesign as an opportunity to take firm hold of the supply of the naira.
“The way to go, therefore, is that now that the denominations are redesigned, then it is up to the CBN to as much as possible, limit, control, manage, tighten the quantity of the redesigned currency
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This was disclosed by the Police Public Relations Officer, Bauchi State Command, Ahmed Wakil, a Superintendent of Police, in a terse Whatsapp message on Sunday.
Popular socio-political activist, Deji Adeyanju, on Tuesday, said the redesigning of the naira by the Central Bank of Nigeria, CBN, was targeted at the opposition political parties.
Adeyanju said the CBN policy makes it difficult for the opposition to move money around with the elections around the corner.
Speaking with DAILY POST, the Abuja-based activist, however, said the policy would boost the economy.
Asked if the new policy would reduce vote-buying during the 2023 elections, Adeyanju said: “It won’t. Politicians always have a way around these things.”
He also described those who stashed the naira away as heartless animals.
According to Adeyanju: “Heartless animals refused to help the poor, but Emefiele has forced them to bring out all the money.
“The redesigning of the naira looks like it’s targeted against opposition political parties because once money goes into the system, it’s the government that determines how much you can get out of the system.
“Yes, it’s a fantastic idea of boosting the economy, knowing that so many looters have physical cash in their hands, so we can now see how smart it is for CBN to have taken such initiative.”
He, however, cautioned against the rush to implement the new policy, which starts in December.
Adeyanju said CBN should wait till the 2023 elections are over before implementing the new policy.
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“I do not see the urgency and the spread right before the election. It’s even advisable for CBN to show goodwill by letting the policy take effect after the election, so it’s not seen as a political thing.
“This will show transparency and that they are not targeting anyone, and they are not available to be used as a willing tool by the incumbent party against the opposition.
“It’s a good policy; however, the ideal thing is for the CBN to wait until after the elections to mop up and release the new notes,” he added.
The CBN had set December 15, 2022, for the release of the redesigned naira notes.
CBN Governor, Godwin Emefiele said N100, N200, N500, and N1000 notes would be redesigned and released.
Meanwhile, the Economic and Financial Crimes Commission, EFCC, says it’s watching the residence of three State governors following the announcement by the apex bank.
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Buhari, according to a statement issued on Saturday night by the Force Public Relations Officer, Olumuyiwa Adejobi, will unveil the equipment at the Force Headquarters in Abuja.
Taking to his Instagram page on Friday, he shared his sample of the N1000 which included an image of himself and actor Osita Iheme aka Pawpaw on his Instagram page. He captioned the post, “Thank You Nigeria For The Privilege.”
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The naira has rebounded by 20.8 percent to 720/dollar at the parallel market, findings by The Crowns info Reporters have shown.
The development came two weeks after the local currency came under severe pressure at the black market, following the announcement by the Federal Government to redesign the naira.
The naira which fell consistently throughout last week against the United States dollar tumbled to an all-time low of 910/dollar last weekend.
However, the currency began a rebound against the greenback on Monday, after a week-long clampdown on foreign exchange dealers in Abuja, Lagos, Kano and other major cities by the personnel of the Economic and Financial Crimes Commission.
EFCC officials had arrested over 90 Bureau De Change operators across major cities in the country over allegations of currency hoarding and aiding politically exposed Nigerians and other criminal elements in money laundering.
The naira which was bought and sold on the streets of Lagos and Abuja between 735/dollar and 745/dollar about two weeks ago began a free fall shortly after the decision of the Federal Government to redesign the local currency.
On Monday, however, the naira rebounded and was bought and sold between 850/dollar and 860/dollar. The national currency gained significantly and steadily on Tuesday and Wednesday and closed at 720/dollar on Thursday.
Financial analysts and forex dealers who spoke to our correspondents attributed the development to market sentiment and the activities of the EFCC personnel.
The clampdown on forex dealers was said to have forced several BDCs into hiding, a move that reportedly made many politically exposed persons and currency speculators hold back in their demand for the greenback.
There had been a huge demand for the dollar at the parallel market in Lagos, Abuja and other cities.
Speaking with our correspondents on Thursday, a BDC operator at the Murtala Muhammed Airport, Lagos, Mustafa Abdullahi, noted that he bought the local currency for 715/dollar and sold it for 720/dollar.
He said several BDCs had gone into hiding following the EFCC clampdown, adding that the demand for the greenback had dropped significantly.
“Many of our people have lost hundreds of millions of naira due to the fall. Many of them bought the dollar when it was over N800. Now the US currency has started falling and they are losing several millions. I personally lost millions of naira.”
Seriki Muhammed, another BDC operator at the Lagos airport, said he also bought the greenback for 717/dollar and sold it for 721/dollar on Tuesday.
Muhammed told our correspondent that some BDCs were licking their wounds because some had bought over $500,000 at about 820/dollar in anticipation of further loss in naira value.
“We are in a big trouble unless the dollar rises again. Many of our people bought so much dollar, hoping it would gain further,” he told one of our correspondents.
A currency dealer in Allen Avenue, Ikeja, Lagos, simply identified as Gambo Bello, said he was buying and selling the US currency for N715 and N720.
Abubakar Hamid, a BDC operator in Abuja, told one of our correspondents that he bought the US dollar for N716 and sold it for N719.
Also, Zakari Mohammed, a BDC operator in Lagos Island, told our correspondent he was buying and selling at N718/dollar and N722/dollar.
However, the President, Association of BDC Operators of Nigeria, Aminu Gwadabe, said market sentiment and the news of the naira redesign drove the market in the past two weeks.
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He said the rebound of the naira had made many currency speculators lose millions of naira. According to him, many forex dealers did not know the naira would rebound too soon.
He said, “I can say the surveillance by the EFCC and other factors affected the market. However, I can say that some global factors also affected the market aside from the local issues in Nigeria. Don’t forget that countries like Saudi Arabia, Russia and China are taking some steps that are currently affecting the dominance of the dollar.
“But locally, I can say certain sentiments made the naira rebound and these have led many speculators to lose millions of naira. Many took a position at N800/dollar and now they are worried the currency is now N720/dollar. This was why there was some resistance in the market today with many BDCs not willing to sell their dollar at a lower amount. People who kept the greenback are now bringing it out because of certain market sentiments.”
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, noted that there had been a decline in the rush for dollars after the announcement of the naira re-designed.
According to him, this decline might have led to the rebound of the naira.
He said, “It is a very volatile situation. The immediate reaction to that pronouncement triggered some rush to convert to dollars. That round of reaction is already beginning to die down. That’s a possible factor. Once that initial rush has subsided, it is possible that the pressure on the dollar reduced.”
He also noted that the recent rumour about some expiring dollar bills might have contributed to the rebound of the naira.
However, Yusuf noted that there were still a lot of uncertainties and the situation was still volatile.
He also said that the recent arrest of some BDC operators likely did not add to the rebound.
Yusuf further noted that there was a possibility that a number of speculators were cautious and aware of the volatile situation, which might have prevented them from any losses.
He, however, said that sometimes one loses and sometimes one wins when speculating.
A development economist, Dr Aliyu Ilias, noted that the naira might likely still decline, especially with the coming election.
He also said that the economy had yet to be stable and the rebound might not last for long.
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The Armed Forces expressed dismantled that “politically exposed persons can denigrate themselves into joining agents of destabilisation and violence in making false claims just to heighten tension in the polity”.
Ever since the governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele announced a decision for the redesign and reissuance of Naira notes, specifically the denominations of N200, N500 and N1000 notes starting from December 15, there have been several controversies and a spike in the exchange rate of Naira to dollar across the country.
Akwa Ibom State is not left out in the rush as a walk to Udi street and other centres in Uyo where dollars are being exchanged showed an increase in the number of customers, especially agents of politicians coming to exchange Naira to other hard currencies thereby leading to surge in the exchange rate.
As of Sunday evening in Udi street, a dollar was exchanged at N875.00 and being sold at almost N930.00.
One of the persons that exchanges currencies, who identified himself as Umaru, told our correspondent that dollars are no longer sold at any fixed price but dependent on the bargaining power of the buyer, saying that hopefully by next week, it would hit over a thousand Naira per dollar.
The CBN governor had announced that from December 15, the old and new currencies would circulate side by side and by 31 January, the old will phase out and if any person fails to change it, it will no longer be a legal tender.
He said the essence of redesigning the naira was to impact the value of the currency and address the geometric inflation rise, among other reasons.
However, the Minister of Finance, Mrs Zainab Ahmed has faulted the claims before the Senate, saying that the policy portends serious consequences on the value of naira to other foreign currencies, especially in a time like this.
Also, an Uyo-based lawyer and public affairs analyst in the State, Edmund Ewa, in a post on his Facebook wall, faulted the CBN’s move.
He said that Emefiele’s claims that politicians are hoarding more than half of Nigeria’s cash circulation in Naira doesn’t really add up, insisting that politicians actually hoard more monies in dollars, pounds, gold and even crypto currencies since Naira took the nose dive.
Emefiele had said that over 3 trillion Naira notes are supposedly in circulation, but merely a trillion Naira have been accounted for by banks. So the presumption is that the remaining unaccounted couple of trillions are stockpiled somewhere.
According to Ewa, “Mr. Emefiele must think Nigeria is a populace of simpletons to insinuate that 2 trillions cannot comfortably circulate among a population of over 200 million people. Simple arithmetic puts the division at N10, 000 per person. And the last I checked, the highest amount a citizen is permitted to possess in cash according to the money laundering act 2011 is N5 million.
“Another flaw in CBN’s logic is in the cost of printing new money not just under an inflationary economy, but when the inflation is at its peak. The CBN should first tell Nigeria how much it will cost the nation to print new Naira notes and the effect it will have on our economy.
“By virtue of section 8(4) & (5) of the CBN Act, Mr. Emefiele is presumed to have presented this report to the National Assembly before seeking and obtaining presidential approval to so proceed, default of which the National Assembly are now duty bound to probe the said policy in exercise of its powers in Section 88(1) & (2) of the 1999 Constitution of the Federation Republic of Nigeria (As Amended).”
The lawyer also wondered why the Federal Government would be in a haste to fizzle out the currency without giving the people ample time to change to the new notes considering the fact that the present administration has up to May, 29, 2023, to handover, which is more than three months.
He alleged that the target of the redesign which the CBN boss said would gulp 3.3 trillion naira was to make currency flow run dry nationwide by February 2023 to have transactions by political opponents thoroughly monitored.
However, a senior lecturer in the department of Economics, University of Uyo, Uyo, Professor Emmanuel Onwiduokit in an interview, commended the CBN for the redesigning of the Naira notes, saying that it was long overdue.
He said though he has had some disagreement with some of the policies of the Federal Government, redesigning the naira notes is a welcomed development, stressing that it would tackle counterfeiting.
Emmanuel, who explained that periodic redesigning of the Naira is five to eight years as stated in the law, said the last time this was done was 20 years ago, saying that it is better to get it right late than not getting it right at all.
His words, “Each currency has a life span and after that lifespan, it has to be withdrawn and replaced and that replacement is the new note which is being reprinted and you have to pay for it; the only difference is the cost of redesigning and there must be additional security features that will make it more complicated.
“As the Governor of the Central Bank rightly mentioned, most of the money printed is not in the banking system, rather they are outside, under pillow cases, coffins, therefore, the monetary policy of the Central Bank cannot be effective because you will be dealing with just a fraction. But with this, people will be forced to take money to the bank and we even have a law in Nigeria that determines the amount of cash you can carry and it would trigger the EFCC and financial crime intelligence to know who has deposited outrageous sums and commence investigations.”
Speaking on the N3.3trillion as the cost to redesign the Naira, the don reasoned that under normal circumstances, the Central Bank pays for the reprinting of currencies, noting that the only thing was the additional payment for the redesigning, which would carry more security features that would check the activities of counterfeiting.
He queried, “Are we not paying for the printing of the currency? The only difference is the redesigning; for instance, if they print the N1000, they can pay like N50 or 70. The American dollar is printed for 94 cents.”
He also attributed the rise in the purchase of dollars to the unscrupulous activities of politicians and called on the CBN to partner with the Economic Financial Crimes Commission, EFCC, and other security agencies to ensure that they are closely monitored and investigated.
“One of the reasons the dollar is going the way it is going is because dubious politicians want to reduce the quantity of naira they are carrying. I advise the CBN now to partner with EFCC and other security agencies to monitor and see how they can reduce this, because they will go now to change it to foreign currency. Monitor especially, the bureau de change and black market, whoever that is involved in changing suspicious amounts of money should be arrested and investigated.
“I can’t see why someone should be keeping one billion Naira in a house, government can even recover a lot of tax from it because someone who made money legitimately and didn’t pay tax, government will establish first what did you do to make such amount, if it’s genuine, you pay tax, but if the government found out it was not genuine, then you forfeit the money.”
Emmanuel said it’s left for each segment that is attached to the implementation of the policy to be alive to be its’ responsibility.
He, however, said there was the need for sensitization of people, especially those in the rural areas on how to identify the security features of the new naira notes
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Naira fell significantly against the U.S dollar at the unauthorised parallel market on Monday, extending the local unit devaluation to N800 at the close of business.
This implies a 2.83 per cent decline from N778.00 per $1 it exchanged last week Friday.
The continuous devaluation of the naira against the dollar at the parallel market increased within the past three business days after the Central Bank of Nigeria announced plans to replace naira notes.
The apex bank said the decision was embarked upon to reduce excess cash in circulation and check counterfeiting.
Analysts have blamed the CBN move as the reason behind the further devaluation of the Naira in the black market, as holders of illicit funds are jostling to convert cash stacked outside of banks to dollars, further driving up the exchange rate.
Currency dealers in Abuja and Uyo said the dollar was exchanged at N800.00 and sold for N803.00 and N805.00 respectively on Monday.
However, the naira gained slightly against the U.S dollar at the official market within this period.
According to data published on FMDQ websites, where forex is officially traded, the naira closed at N443.00 per dollar on Monday.
This represents a 0.39 per cent appreciation from the N444.75 rate it traded on Friday last week, with $40.05 million posted as forex turnover for the day.
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The former vice president further stated that young people should be given the space and opportunity to express themselves within the provisions of the law.
The naira has suffered further depreciation at the parallel market, currently trading for N750 against the dollar, according to black market platform Aboki Forex.
The current parallel market exchange rate was monitored by Noble Reporters Media Thursday night.
The Gazette had reported in September that the naira hit a record high, trading at N719 against the dollar. Since then, the dollar has continued to rise, exchanging at a higher rate.
In 2021, the apex bank prohibited the sale of foreign exchange to BDC operators in a bid to arrest the fast fall of the country’s currency. The apex bank had accused the BDCs of unauthorised sales of foreign exchange above the market they were authorised to serve.
BDC operators were a significant part of the black market before the ban, helping people who couldn’t legally access foreign currencies directly from the CBN to maintain their exchange rates.
The Gazette reported that the inability of BDC operators to obtain foreign currency from the CBN could have a significant negative effect on the economy of the nation by increasing pressure on the local currency.
The currency exchange rate was approximately N501 to a dollar when CBN Governor Godwin Emefiele forbade the sale of foreign exchange to BDC. The value of the naira, however, fell to N670 per dollar a year after the ban.
The apex bank threatened to detain and prosecute Nigerians who used naira to buy dollars in an effort to further restrict the flow of foreign exchange at the black market.
Godwin Emefiele, the head of the central bank has drawn criticism for failing to implement measures that would have helped stabilise the value of the nation’s currency on the foreign exchange market
Meanwhile, an exchange rate of N442.50 to the dollar was the highest rate recorded within the day’s trading before it settled at N441.25.
The Naira has appreciated against the dollar at the Investors and Exporters window where naira is traded officially.
According to NAN, Naira on Monday exchanged N441.25 against the dollar, recording a slight appreciation.
The figure represented a slight increase of 0.03 percent when compared to the N441.38 it exchanged for the dollar before the close of business on 14 October.
NAN also reports that the open indicative rate closed at N439.63 to the dollar on Monday.
Meanwhile, an exchange rate of N442.50 to the dollar was the highest rate recorded within the day’s trading before it settled at N441.25.
Within the day’s trading, the Naira sold for as low as N425 to the dollar.
A total of 46.21 million was traded in foreign exchange at the official investors and exporters window on Monday.
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
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.
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.
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.
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.
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.”
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
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.
Noble Reporters Media 