News Top Stories

CBN weakens the Naira, to sell at N392/$ in parallel market

…falls to 600/$ on futures market for 5-year settlement

 

The Central Bank of Nigeria (CBN) has directed bureau de change operators in the country not to sell dollars higher than N392 to end users. This came as the naira hit a record low of N600 to the dollar on the futures market for five-year settlement on Friday, traders said, after the black market eased, showing the severity of the liquidity scarcity on the spot market.

 

The Central Bank weakened the currency on the derivatives market, traders said. The naira earlier fell to a low of N495 on the black market, widening the gap with the bank’s official rate of N381 set in July. It also eased on the spot market.

 

In a circular signed by O.S. Nnaji, director of trade and exchange at the CBN, and dated November 30, 2020, the apex bank said the volume of sales for each market is $10,000 per bureau de change (BDC). “Please be advised that the applicable exchange rate for the disbursement of proceeds of IMTOs, for the period Monday,

 

November 30 to Friday, December 14, 2020, is as follows: International money transfer service operators (IMTSOs) to banks – N388/$1; Banks to CBN – N399/$1; CBN to BDCs – N390/$1; BDCs to end-users not more than N392/$1,” it read.

 

At the close of trading on Friday, figures from the financial market dealers exchange over the counter (FMDQ) NAFEX, an official market where the exchange rate is traded, also show that the exchange rate between the naira and dollar has depreciated to N390/$1 — lowest level since the introduction of the import & export (I&E) window in 2017.

 

This is about N4 higher than the N386 per dollar which the apex bank had sold dollars to the BDC operators. In the parallel market, the naira hit record lows, falling by 2.2 per cent to N495/$1 as lack of access to forex at the official windows has funneled demand to the parallel market. Traders said the Central Bank reviewed contracts twice this week.

 

The naira has suffered as oil revenues declined, prompting the apex bank to restrict access to the official window, causing the black market to flourish. Finance Minister Zainab Ahmed said on Friday that the government was concerned about the exchange rate gap between the black and official markets, a situation caused by low revenues from oil, Nigeria’s main export.

 

“We have been trying to take measures to close the gap and the progress is not as much as we hope,” Ahmed told Bloomberg Television.

 

“The reason why we have the gap is because of the decline in the revenues from the oil and gas industry.” Oil revenues, the major source of foreign exchange for Nigeria, declined the most in about 14 quarters, pushing the economy into its second recession in four years, she said. Officials expect the recession to end by the first quarter.

 

“There is high demand and very low supply and the Central Bank has put in a process where there is queuing … we do hope that we will be able to get to an even level … so that the impact on the exchange rate will become moderated,” she said.

 

Analysts say the Central Bank’s latest action on the currency raises doubts over Nigeria’s commitment to reforms, denting hopes for a shift towards a marketdriven exchange rate after the bank dismissed the blackmarket rate.

 

“There is mounting evidence that the country’s FX restrictions are hurting the economy,” Capital Economics wrote in a note. Central Bank Governor Godwin Emefiele responded on Tuesday to calls for further depreciation of the naira — which has weakened by 28 per cent this year —

by saying the black-market rate should not be used to determine the naira’s value.”

 

TRY IT TONIGHT!!! ---

 

Abuja Civil Servant reveals (FREE) secret Fruits that Increased his Manh0d size, gives Stronger Erections and ends Premature Erection in 7days...

   

CLICK HERE FOR FULL DETAILS.

 

%d bloggers like this:
Fake Richard Mille Replica Watches, www.richardmille.to The ceramic upper and lower cases are imported from Taiwan and are processed by ATPT ceramics to form Y-TZP ceramics. After high-tech anti-fingerprint technology, they present a delicate and soft sub-black material. This color quality has remained unchanged for a hundred years. The color and luster are more detailed to achieve the ceramic tone visual pattern electroplating upper and lower shells that are infinitely close to the original products, with anti-reflective coating sapphire glass! The tape uses a soft and delicate Malaysian imported top rubber strap, and the movement is equipped with an imported Seiko NH movement. The buckle of this version is made according to the original size and thinness, making it feel more comfortable and intimate, the highest version on the market Richard Mille Replica