Eagle Global Markets, a derivatives global market company, has introduced an indigenous naira platform tagged, “CloudTrade”, to enable both retail and institutional investors in Nigeria to play the global markets.
EGM’s Chief Executive Officer, Mr Gbite Oduneye, on Friday told a news conference that all global markets trades through the online trading platform were done in Naira.
Oduneye said the company had succeeded in eradicating the bureaucratic bottleneck in trading the global market.
He said, “It does not put pressure on the foreign exchange because all global markets trades through its platform are done in naira.”
Oduneye said that the naira platform would eliminate the need for currency conversion in deposits and withdrawals and would also offer competitive spreads.
Oduneye said the company was the first PAN African brand to offer such an opportunity to Nigerian clients who previously had to face the hassles of operating a U.S. dollar-denominated account in order to access even less attractive markets.
He said, “To achieve this feat, the company took into consideration the most pressing needs of traders and investors and went ahead to build their proprietary platform called the CloudTrade.”
He said that CloudTrade promotes ease of market access by ensuring that competitive and affordable capital can be used to commence trading the financial markets.
Oduneye said traders in the past had to source for foreign currencies to fund their trading accounts, or deposit Naira equivalents, thereby limiting their trading capability and volume.
He said that the strain the currency conversion process put on the traders and even the economy in general had been eliminated with the introduction of CloudTrade.
He said, “With CloudTrade, EGM clients are able to define their trading volumes in naira, while getting up to the minute financial data in the form of economic news and a bird’s eye view on market performance using the powerful built-in indicators.”
“Retail and institutional investors in the Nigerian finance space who have for long craved for an indigenous platform that could provide and combine world class functionality into a user friendly interface now have answer to their requests.”
Oduneye said the company was offering the highest level of transparency, ease of transacting and most importantly constant innovation that would lead to client development.
He said EGM had over 600 active trading clients that qualified to trade on its platforms within three months in Nigeria.
The chief executive officer said that about 50 per cent of trading applications were declined due to Know Your Customer requirement and other regulatory checks in line with international standards.
He said that the reason for necessary checks on every single trading application was to ensure best practice.
He said, “EGM provides a trading platform that brings to the table fast order execution with a depth of analytical tools to access over 3,000 assets such as equities, commodities, forex and spot metals.”.
Oduneye assured potential clients that global industry standards would be applied in the client on-boarding process.
He said that the company was committed to education to help traders improve on their short and long-term financial expectations.
Oduneye said EGM had earmarked the sum of one million dollars for training and retraining of its clients for better results.
Also speaking, Mr Kola Adebayo, EGM Head of Education and Market Analysis, said that the company had developed a curriculum that would aid its clients to become sound in market analysis.
Adebayo said the company, through intensive education, would help clients to achieve both their corporate or individual financial goals.
He said EGM had an intensive programme that taught clients on risk management.
“A lot of people lost money trading online and for us to win their trust, we need to change their views about potentials available in the market,”Adebayo said.
Naira Plunges to Record Low of N422/US$1 at Official Market
The Nigerian Naira extended its decline to N422 to a United States Dollar at the official forex market, the investors and exporters forex window managed by the FMDQ Group.
Naira opened the day at N413.50 to a US Dollar before plunging to as low as N436 at the spot forex market and N446 at the forward market. The local currency eventually closed the day at N422.07 per US Dollar.
Investors at the window traded $141.94 million during the trading hours of Thursday.
The decline was after Vice President Osinbajo asked the Central Bank of Nigeria (CBN) to rethink its current forex policy and allow the Naira to reflect market conditions. This, the Vice President said will help close the current gap that exists between the official rate and black market rate.
Media outlets had interpreted the Vice President position as a call for further devaluation of the Nigerian Naira. However, in a statement signed by Laolu Akande, Senior Special Assistant to the President on Media & Publicity, Office of the Vice President, Akande explained that Osinbajo is simply calling for a single forex rate to dislodge the activities of speculators and hoarders at the various unregulated black market.
He added that the 40 percent or N160 arbitrage difference between the official rate of N410 and N570 offered at the black market will continue to encourage corruption in the forex market.
“For context, the Vice President’s point was that currently the Naira exchange rate benefits only those who are able to obtain the dollar at N410, some of who simply turn round and sell to the parallel market at N570. It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40% profit!
“This was why the Vice President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.”
At the black market, traders exchanged Naira at N565 to a United States Dollar on Thursday.
Osinbajo Explains Why Forex Policy Should Discourage Arbitrage and Corruption
Following Vice President Yemi Osinbajo suggestions that the Central Bank of Nigeria (CBN) should rethink its present forex policy that encourages arbitrage and corruption and allow the Nigerian Naira to reflect market realities that were misconstrued as devaluation by the media, the Vice President has now come out to clear the air that he is not calling for a devaluation of the embattled Naira but to close the arbitrage gap of 40 percent gain that existed between CBN rate of N410/US$1 and the black market rate of N570.
In a statement released by Laolu Akande, Senior Special Assistant to the President on Media & Publicity, Office of the Vice President, the Vice President position was that the current Naira exchange rate benefits only those who are able to access the US Dollar at N410, “some of who simply turn round and sell to the parallel market at N570. It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40% profit!,” the statement reads.
It continues “This was why the Vice President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.
“It is a well known fact that foreign investors and exporters have been complaining that they could not bring foreign exchange in at N410 and then have to purchase foreign exchange in the parallel market at N570 to meet their various needs on account of unavailability of foreign exchange. Only a more market reflective exchange rate would ameliorate this. With an increase in the supply of dollars the rates will drop and the value of the Naira will improve.
“The real issue confronting the economy on this matter is how to improve the supply of foreign exchange, but this will not happen if we do not allow mechanisms like the Importers and Exporters window to work. If we allow this market mechanism to work as intended, we will find that the Naira will appreciate against the dollar as we restore confidence in the system.”
Dollar Rate to Naira Today at Official Forex Window
The Dollar rate to Naira closed 0.10 percent lower on Wednesday at the official forex window despite supply rising by over 100 percent.
Naira dipped at the official forex exchange window to N414.73 against the United States Dollar on Wednesday, down from N414.30 it closed on Tuesday.
The Dollar rate to Naira opened the day at N414.33 before dropping to as low as N415.20 during the trading hours of Wednesday. Investors traded $266.32 million on Wednesday, against $122.15 million exchanged on Tuesday.
At the unregulated forex section, the black market, the Naira was exchanged at N565.00 and N568.00 to a US$ on Wednesday in Abuja.
In Uyo, forex dealers said the Naira exchanged at N580 to a U.S dollar N580.00 due to increase in demand they experienced on Wednesday.
“We bought at N570.00 and sold at N572.00 per $1 on Tuesday, but today, we sold at N578.00 and even N580.00 at some point because the demand was much and people were selling as they see deemed fit, ” the anonymous dealer stated.
However, the Central Bank of Nigeria’s exchange rates remained largely unchanged as shown below.
Central Bank of Nigeria’s Exchange Rates
|10/6/2021||SOUTH AFRICAN RAND||27.0668||27.0998||27.1328|
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