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Understanding Key Aspects of CBN’s New Forex Guidelines

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New Forex

Understanding Key Aspects of CBN’s New Forex Guidelines

 

The Central Bank of Nigeria has been hailed by analysts for abandoning its Naira peg rate for a more flexible exchange rate, after previous refuting the decision even as its external reserves plunged and inflation surged to a six-year high.

Here are the key aspects of the new forex guidelines. Click here for the 13 guidelines.

CBN will participate in the market through periodic interventions to either buy or sell forex.

The central bank periodic interventions, would allow the CBN to regulate possible market imbalances, either to prop up Naira against the US dollar or to lower the Naira to stimulate the economy through exports. This will also allow the central bank to manage the activities of Forex Primary Dealers (FXPD), since there is no predetermined spread between the CBN and FXPD, which means spread can also be adjusted to accommodate the current market situation.

CBN to introduce non-deliverable over-the-counter naira-settled futures.

The introduction of non-deliverable forward, perhaps is the most unique of all the guidelines, one because it will help curtail the loophole created in the previous forex policy that allow speculators determine the exchange rate at the parallel market, and also encourage businesses and investors to hedge against eventualities. Hence, eliminate hoarding due to fear of uncertainties.

What this means is that, if you need forex transaction in December, you can peg your foreign exchange rate at let’s say N250 and if in December exchange rate is N270, the central bank will offset the N20 gap, such that you are not losing any money.

“But if the rate on that day is lower than the deal date rate, you’ll pay the Naira equivalent.”

Again, it will encourage capital importation from foreign investors, since they can now hedge against a further plunge in oil prices and at the same time buy forex at a predetermined rate to remit proceeds.

Non-oil exporters now allowed unfettered access to their FX proceeds.

Another bold move, is allowing non-oil exporters unbridled access to their FX proceeds, this initiative has officially brought back diversification agenda to the table and indicate the readiness of the government to tackle Nigeria’s mono-crude oil status. Especially, knowing that non-oil sector contributed 89.71 percent to the first quarter GDP, after falling 5.77 percent, the highest in years.

However, this does not mean gauge of consumer prices (inflation) will drop from the current 15.6 percent, if any changes it might surge to 16 percent in the second quarter pending the time the current policy would have filtered through key industries.

Overall, the flexible exchange rate will once again position Nigeria as an investment destination, boost job creation, enhance importation, increase consumer confidence and modulate consumer prices in the long run if well implemented.

 

 

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Forex

Black Market Dollar To Naira Exchange Rate For Today 1st February 2023

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Godwin Emefiele - Investors King

You can access the black market Dollar to Naira exchange rate for today, 1st February on Investors King.

This online business news platform has obtained the official dollar to naira exchange rate in Nigeria today including the Black Market rates, Bureau De Change (BDC) rate, and CBN rates.

Note that the exchange rate changes hourly.… it depends on the volume of dollars available and the Demands. It means that…you can buy or sell 1 dollar at ₦745 and ₦750, and the price can change (high or low) within hours.

How Much Is Black Market Dollar To Naira Exchange Rate Today?

Dollar to naira exchange rate today black market (Aboki dollar rate):

Investors King understands that the exchange rate for a dollar to naira at Lagos Parallel Market (Black Market) players buy a dollar for N745 and sell at N750 as of the time of filing this report.

Exchange Rate of Dollar To Naira in Black Market Today?
Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate 745
Selling Rate 750

The local currency opened at N750.00 per $1 at the parallel market otherwise known as the black market today Wednesday, 1st February 2023, in Lagos Nigeria, after it closed at N755 per $1 on Tuesday, 31st January 2023.

Even though the dollar to naira opened in the parallel market at N750 per $1 today, Investors King reports that the Central Bank of Nigeria (CBN) does not recognize the parallel market, otherwise known as the black market. The apex bank has therefore directed anyone who requires forex to approach their bank, insisting that the I&E window is the only known exchange.

Investors King reports that in the black market, the players buy a dollar for N745 and sell for N750 on Wednesday morning, February 1, 2023, after they purchased N752 and sold for N755 on Tuesday, 31st January 2023.

Meanwhile, Investors King reports that the USD started this week at ₦755 in Parallel Market also known as Black Market after it opened at  ₦757 last week Monday, January 23, 2023.

Factors Influencing Foreign Exchange Rates

Here are some of the causes of the dwindling dollar to naira exchange rate.

Inflation Rates: It is well known that inflation directly impacts black market exchange rates. If the Nigerian economy can be stabilized and inflation is controlled, the naira will benefit; however, if the naira continues to fall, it may indicate that food and other necessities are becoming more expensive daily.

Interest Rates: Another tool to keep an eye on is interest rates. If the interest rate at which banks lend money rises, it would harm the economy, causing it to contract and, as a result, the value of the naira to fall.

Government Debt: National debt can impact investor confidence and, as a result, the influx of funds into the economy. If inflows are high, the naira exchange rate will rise in favour of the naira.

Speculators: Speculators frequently impact the naira-to-dollar exchange rate. They stockpile money in anticipation of a gain, causing the naira to plummet even lower.

Conditions of Trade: Favorable trade terms will increase the value of the naira to the dollar, although Nigeria is currently experiencing a trade deficit. Everything comes from China, India, and the majority of Asian countries.

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Black Market Rate

Black Market Dollar To Naira Exchange Rate For Today 30th January 2023

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Naira Dollar Exchange Rate - Investors King

You can access the black market Dollar to Naira exchange rate for today, 30th January on Investors King.

This online business news platform has obtained the official dollar to naira exchange rate in Nigeria today including the Black Market rates, Bureau De Change (BDC) rate, and CBN rates.

Note that the exchange rate changes hourly.… it depends on the volume of dollars available and the Demands. It means that…you can buy or sell 1 dollar at ₦752 and ₦755, and the price can change (high or low) within hours.

How Much Is Black Market Dollar To Naira Exchange Rate Today?

Dollar to naira exchange rate today black market (Aboki dollar rate):

Investors King understands that the exchange rate for a dollar to naira at Lagos Parallel Market (Black Market) players buy a dollar for N752 and sell at N755 as of the time of filing this report.

Exchange Rate of Dollar To Naira in Black Market Today?
Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate 752
Selling Rate 755

The local currency opened at N755.00 per $1 at the parallel market otherwise known as the black market today Monday, 30th January 2023, in Lagos Nigeria, after it closed at N755 per $1 on Sunday, 29th January 2023.

Even though the dollar to naira opened in the parallel market at N755 per $1 today, Investors King reports that the Central Bank of Nigeria (CBN) does not recognize the parallel market, otherwise known as the black market. The apex bank has therefore directed anyone who requires forex to approach their bank, insisting that the I&E window is the only known exchange.

Investors King reports that in the black market, the players buy a dollar for N752 and sell for N755 on Monday morning, January 29, 2023, same rate of Sunday, 29 January 2023.

Meanwhile, Investors King reports that the USD started this week at ₦755 in Parallel Market also known as Black Market on Sunday, January 29, 2023, in Lagos Nigeria.

Factors Influencing Foreign Exchange Rates

Here are some of the causes of the dwindling dollar to naira exchange rate.

Inflation Rates: It is well known that inflation directly impacts black market exchange rates. If the Nigerian economy can be stabilized and inflation is controlled, the naira will benefit; however, if the naira continues to fall, it may indicate that food and other necessities are becoming more expensive daily.

Interest Rates: Another tool to keep an eye on is interest rates. If the interest rate at which banks lend money rises, it would harm the economy, causing it to contract and, as a result, the value of the naira to fall.

Government Debt: National debt can impact investor confidence and, as a result, the influx of funds into the economy. If inflows are high, the naira exchange rate will rise in favour of the naira.

Speculators: Speculators frequently impact the naira-to-dollar exchange rate. They stockpile money in anticipation of a gain, causing the naira to plummet even lower.

Conditions of Trade: Favorable trade terms will increase the value of the naira to the dollar, although Nigeria is currently experiencing a trade deficit. Everything comes from China, India, and the majority of Asian countries.

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Naira

Black Market Dollar To Naira Exchange Rate For Today 28th January 2023

Dollar to naira exchange rate today black market (Aboki dollar rate)

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New Naira notes

You can access the black market Dollar to Naira exchange rate for today, 28th January on Investors King.

This online business news platform has obtained the official dollar to naira exchange rate in Nigeria today including the Black Market rates, Bureau De Change (BDC) rate, and CBN rates.

Note that the exchange rate changes hourly.… it depends on the volume of dollars available and the Demands. It means that…you can buy or sell 1 dollar at ₦750 and ₦755, and the price can change (high or low) within hours.

How Much Is Black Market Dollar To Naira Exchange Rate Today?

Dollar to naira exchange rate today black market (Aboki dollar rate):

Investors King understands that the exchange rate for a dollar to naira at Lagos Parallel Market (Black Market) players buy a dollar for N750 and sell at N755 as of the time of filing this report.

Exchange Rate of Dollar To Naira in Black Market Today?
Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate 750
Selling Rate 755

The local currency opened at N755.00 per $1 at the parallel market otherwise known as the black market today Saturday, 28th January 2023, in Lagos Nigeria, after it closed at N750 per $1 on Thursday, 26th January 2023.

Even though the dollar to naira opened in the parallel market at N755 per $1 today, Investors King reports that the Central Bank of Nigeria (CBN) does not recognize the parallel market, otherwise known as the black market. The apex bank has therefore directed anyone who requires forex to approach their bank, insisting that the I&E window is the only known exchange.

Investors King reports that in the black market, the players buy a dollar for N750 and sell for N757 on Saturday morning, January 28, 2023, after they purchased N744 and sold for N746 on Thursday, 26 January 2023.

Meanwhile, Investors King reports that the USD started this week at ₦745 in Parallel Market also known as Black Market on Monday, January 23, 2023, in Lagos Nigeria, after it opened at ₦744 last week Monday, January 16, 2023.

Factors Influencing Foreign Exchange Rates

Here are some of the causes of the dwindling dollar to naira exchange rate.

Inflation Rates: It is well known that inflation directly impacts black market exchange rates. If the Nigerian economy can be stabilized and inflation is controlled, the naira will benefit; however, if the naira continues to fall, it may indicate that food and other necessities are becoming more expensive daily.

Interest Rates: Another tool to keep an eye on is interest rates. If the interest rate at which banks lend money rises, it would harm the economy, causing it to contract and, as a result, the value of the naira to fall.

Government Debt: National debt can impact investor confidence and, as a result, the influx of funds into the economy. If inflows are high, the naira exchange rate will rise in favour of the naira.

Speculators: Speculators frequently impact the naira-to-dollar exchange rate. They stockpile money in anticipation of a gain, causing the naira to plummet even lower.

Conditions of Trade: Favorable trade terms will increase the value of the naira to the dollar, although Nigeria is currently experiencing a trade deficit. Everything comes from China, India, and the majority of Asian countries.

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