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Nigeria’s Forex Market Trades $327m as Foreign Investors Jump on Local Bonds

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Nigerian Exchange Limited - Investors King

The nation’s foreign exchange market recorded $327m worth of transactions on Monday, about six times more than its usual volume, the FMDQ OTC Securities Exchange, told Reuters.

This included a single transaction of $270m at N345/dollar by foreign investors buying local currency bonds, the Managing Director, FMDQ OTC Securities Exchange, Mr. Bola Onadele, said in an interview.

Other transactions were carried out from N314.50 to N317.34 per dollar.

Average trading has been around $50m a day on normal days. It might reach $100m on days the Central Bank of Nigeria intervenes in the forex market.

Forex traders said the CBN sold an undisclosed amount of dollars, close to the end of market session, to help prop up the naira.

The naira closed at 305.50 on Monday, up from the 314.95 it closed at on Friday.

Monday’s surge in trading came after the CBN said on Friday that it would offer N212.85bn ($675m) in Treasury bills maturing between 91 days and one year on Wednesday.

The debt will be sold on Wednesday.

The CBN has been selling short-dated open market bills at yields as high as 18 per cent in an effort to attract offshore funds, most of whom fled Nigeria’s bond and equity markets during a financial crisis that began when oil prices plunged.

The crisis ultimately led the CBN to let the naira’s value float in June. From its controlled rate of N197 to the dollar, the local currency plunged to as much as 309 to the dollar on the interbank market and 414 to the dollar on the black market.

The continued ban of eight lenders from the forex market by the CBN has further weakened the naira against the greenback in the past one week.

Nine commercial banks were last Tuesday banned from the forex market for failing to remit the Nigerian National Petroleum Corporation’s $2.334bn into the Treasury Single Account.

The local currency was sold for 414/dollar across some black market segments in Lagos and Abuja on Sunday.

The naira had hit 412 against the greenback at the parallel market on Friday, after closing at 409/dollar on Thursday.

On Wednesday, a day after the CBN banned nine banks from the forex market, the local currency depreciated to 402/dollar, down from the 397 it closed at against the greenback on Tuesday.

At the interbank market, the naira closed at 314.95 on Friday.

Traders said interbank rates would ease this week when part of July’s budget allocation enters the banking system.

The chief executive officers of banks had met with the CBN over the forex ban issue on Thursday. They resolved to work with the CBN to resolve the forex crisis facing the country.

The naira is expected to plunge further against the US dollar this week as the dollar shortage intensifies.

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

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Forex

CBN Goes After Abokifx, Freezes Bank Accounts for Publishing Black Market Rates

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Abokifx - Investors King

The Central Bank of Nigeria (CBN) has directed deposit money banks to freeze all the bank accounts associated with AbokiFX and its owner, Oniwinde Olusegun Adedotun, for publishing foreign exchange rates other than the rates determined by the CBN.

The apex bank had warned publishers to desist from publishing forex rates determined by the unregulated parallel market, popularly known as the black market, where speculators and hoarders largely manipulate the nation’s foreign exchange rates as seen in recent weeks.

In an email to publishers by the NGN Project, presumably acting on behalf of the CBN, the organisation had quoted section 11 sub-section 1(c) and 2 (a,b) of the National Economic Intelligence Committee Act of 2004 that stated “it shall be an offence for any person, association of individuals or body corporate (whether public or private) to publish or cause to be published exchange and interest rates other than the rates determined by the Bank from time to time.”

The Act stipulated N100,000 fine or imprisonment for a term of two years or both for individual and N500,000 fine and suspension or revocation of certificate of registration or cerificate of incorporation for association or individuals or corporate body.

This was after the central bank halted the sale of forex to bureau de change operators after accussing them of aiding the activities of criminals at the unregulated black market and been a channel for illicit financial flow. The move, which resulted in chronic forex scarcity and all time high foreign exchange rate, has forced the apex bank to go after publishers in effort to discourage people from patronising the black market and to force Nigerians to reject the unreason exchange rate of N567 to a United States Dollar and approach their banks for N412 to N415 per US Dollars.

Despite covid-19 challenges and limited forex generation, the apex bank has continued to support the Nigerian Naira and go after forex manipulators.

The NGN Project had described AbokiFX.com and its owner has criminals ‘committing crimes against the Nigerian state’. See the email CBN sent to publishers below.

 

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Naira

Naira Exchange Rates Today, Thursday, September 16, 2021

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Naira - Investors King

Naira continued its downward trend against other currencies on Thursday as it plunged to N565 against the United States Dollar at the black market. The local currency traded at N765 and N650 to British Pound and Euro, respectively.

Persistent forex scarcity amid a series of in effective policies have made access to forex impossible for most of businesses that operates in largely import dependent African biggest economy.

Nigeria’s forex reserves, the means in which the nation, service its dollar consuming 200 million population has been on a decline in recent weeks despite crude oil trading at over a year high of $73 a barrel. Some of the factors that have crippled the ability of central bank to cushion the economy with enough forex is low crude oil production, partly due to production cap, weak local manufacturing sector that has made the nation a huge import dependent economy, the ongoing crisis between herders and farmers, rising costs even with falling inflation, etc.

At the bureau de change section, Naira exchanged at N555, N765 and N645 to a United States Dollar, British Pound and Euro common currency.

The Central Bank of Nigeria (CBN) had stopped the sale of forex to the bureau de change operators to plug forex leakages and curb activities of criminal elements, the decision has worsen forex availability. See other forex rates below.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
16/09/2021 557/565** 758/765** 640/650** 70/75 430/440 310/330
15/09/2021 552/562 754/760 640/648 70/75 430/440 310/330
14/09/2021 550/557 754/760 640/645 70/75 430/440 310/330
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
16/09/2021 548/555 753/765 635/645
15/09/2021 548/555 750/761 635/645
14/09/2021 548/555 750/761 635/645
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

N.B: These tables are updated three times a day.

 

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Naira

Dollar to Naira Exchange Rate Today, Tuesday, September 14, 2021

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Naira Notes - Investors King

Naira extended its decline on Tuesday as it hits N557 against the United States Dollar at the parallel market, popularly called the black market.

The local currency exchanged at N557 to a United States Dollar at the black market, representing an all-time record low against the greenback. Against the British Pound and the Euro common currency, the Naira slid to N760 and N645, respectively.

Africa’s largest economy is enmeshed in low forex liquidity caused by poor economic structure that over the years has limited and weakened the nation’s foreign revenue generation. This weak foreign revenue generation has impeded Nigeria, a largely import dependent economy, from effectively servicing her economy with necessary forex for economic activities.

The inability to service the economy with enough forex coupled with the decision of the Central Bank of Nigeria to halt the sale of forex to Buruea De Change Operators have compounded Nigeria’s forex situation and further disrupted the Naira’s outlook.

Still, the apex bank continues to post its inaccessible official rates as shown in the table below. Despite insisting that exchange rates are stipulated Central Bank of Nigeria’s rates, many Nigerians and businesses operating in the country find it hard or impossible to access forex at the central bank’s rates.

The Central Bank of Nigeria sells U.S Dollar at N410.51, while the British Pound and Euro are sold at N568.1869 and N483.6629, respectively.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
14/09/2021 550/557 754/760 640/645 70/75 430/440 310/330
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
14/09/2021 548/555 750/761 635/645
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

N.B: These tables are updated three times a day.

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