The naira recorded marginal gain at the parallel market on Monday and closed at 393 against the United States dollar, up from 397 on Friday.
The local currency, which had fallen to 400/dollar last Friday, traded lower last week.
The naira closed at N505 and N435 against pound sterling and euro respectively at the parallel market on Monday, the News Agency of Nigeria reported.
At the Bureau De Change segment of the foreign exchange market, the naira closed at N385, N505 and N420 against the dollar, pound sterling and 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.
NAN reported that the market was eagerly awaiting the sale of forex by banks to the BDCs during the week.
Meanwhile, the interbank overnight lending rate had jumped to 23 per cent on Friday from 10 per cent recorded in the previous week.
This came after the Central Bank of Nigeria sold Treasury bills at higher yields to lure foreign investors.
The CBN has been offering Treasury bills at high rates to attract offshore flows into the country.
The country has been hit by the fall in oil prices, a development that has prompted foreign players to flee bond and equities markets.
The CBN has been selling hard currency almost on daily basis.
The country is in the middle of its worst crisis in decades as a slump in oil revenues hammers public finances, causing chronic dollar shortages and triggering a contraction in the economy.
The CBN Governor, Mr. Godwin Emefiele, has said a recession is likely.
The regulator raised N256bn in six-month bill on Friday, N206bn more than it had planned to issue, and at a higher yield of 18 per cent to soak up naira liquidity and attract foreign investors back to the country.
It also intervened on the currency markets after the naira hit an all-time low of N353.75 on the interbank market on Friday.
The Federal Government is planning to raise N110bn in local currency denominated bonds on August 17. It is also seeking advisers and book runners to manage a planned $1bn Eurobond it intends to offer this year.
Buhari Expresses Confidence in Banking Institutions to Tackle Economic Challenges
President Muhammadu Buhari has expressed his confidence in the West African Banking Association (WABA) to tackle economic challenges in the West African region.
The president expressed his trust while receiving a team from WABA, led by its President, Thierno Seydou Nourou Sy, at the State House in Abuja.
The president stated that the sub-region needs to come to an agreement on low access to financial services and recovery from the COVID-19 pandemic.
According to him, the association, founded in 1981, brings together over 250 commercial banks and 15 institutions from across West Africa, and for many centuries, African countries have traded with one another without a formalized and structured system. He, however, noted that over time, global trade had become more complex and organized.
The president expressed optimism that the launch of the African Continental Free Trade Area will mark a watershed moment in the way African countries do business.
“More importantly, we will turn the page in ensuring that we deepen and expand our industrial capabilities by making sure we export less of what we have been endowed with in the primary or raw form, and convert larger portions of these resources into finished materials.
“That will allow us to benefit from the revenue earned from the added value of exporting a finished product,” he said.
“Our ability to overcome the current phase of our development lies in our resolve to work jointly via our regional and sub-regional organizations where we can all reach a common understanding to fight against a common enemy.
“This is one of the reasons I am delighted with the strides ECOWAS has been making towards unanimity and forging alliances with a goal to resolve issues that confront the sub-region.
“I believe that this is also the approach that is being followed in the West African Bankers’ Association and the West African Monetary Union,’’ he added.
While commenting on WABA’s ongoing attempts to synchronize monetary and fiscal policy, the president pushed the organization to find common ground despite the particular macroeconomic challenges that each member-state faces.
He pledged that Nigeria would always be ready to support efforts that are geared towards improving the lives of all its citizens “as long as they do not place us at a disadvantage.”
The WABA President praised Nigeria’s leadership role in the African economy, while also praising President Buhari’s leadership.
“That’s why we are here for counsel and guidance for the financial sector in West Africa,” he said. He further urged the president to be an advocate for the greater inclusion of WABA in the ECOWAS structure.
NGX Sheds 0.13% on Monday to Extend its Decline
The Nigerian Exchange Limited (NGX) extended its decline on Monday as investors exchanged 263,338,835 shares worth N3.549 billion in 4,549 billion.
The market value of all listed equities decreased by N37 billion from N28.562 trillion it closed on Friday to N25.525 trillion while NGX shed 0.13% to close at 52,911.51 index points on Monday.
Jaiz Bank led the most traded stocks with 114007816 shares worth N101,752,697.03. Followed by GTCO’s 12,872,851 shares valued N302,842,620.75. See other details below.
|CONOIL||N 31.15||N 34.25||3.10||9.95 %|
|MRS||N 13.60||N 14.95||1.35||9.93 %|
|MCNICHOLS||N 2.13||N 2.34||0.21||9.86 %|
|ACADEMY||N 1.23||N 1.35||0.12||9.76 %|
|NPFMCRFBK||N 1.87||N 2.02||0.15||8.02 %|
|PRESCO||N 200.00||N 180.00||-20.00||-10.00 %|
|GSPECPLC||N 3.41||N 3.07||-0.34||-9.97 %|
|NEIMETH||N 1.76||N 1.59||-0.17||-9.66 %|
|UACN||N 14.40||N 13.20||-1.20||-8.33 %|
|NEM||N 4.39||N 4.05||-0.34||-7.74 %|
Nigeria Raises Interest Rate by 150 Basis Points to 13%
The Central Bank of Nigeria (CBN) led Monetary Policy Committee on Tuesday unanimously agreed to raise interest rates by 150 basis points from 11.5% to 13% to rein in escalating consumer prices.
The apex Governor, Godwin Emefiele disclosed this while speaking to the media on Tuesday, May 24th, 2022.
In 2020, the committee cut interest by 50 basis points to 11.5% in September 2020 to encourage borrowing and deepen new investment to stir growth and halt the plunge in economic productivity during the peak of COVID-19.
The nine-member committee voted unanimously to keep Monetary Policy Rate (MPR) at 13% and others as follow:
- The asymmetric corridor of +100/-700 basis points around the MPR was retained
- CRR was retained at 27.5%
- While Liquidity Ratio was also kept at 30%
The increase may not be unconnected to Nigeria’s high inflation rate of 16.82% in April. The committee is now projecting an aggressive increase in the inflation rate due to the forthcoming general election.
Emefiele said the MPC is suspicious “there might be an aggressive accretion of inflation”. Therefore, to prevent the looming inflation, he said the committee had to raise the interest rate by 150 basis points.
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