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Naira Tumbles to 490 as Dollar Shortage Continues

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Naira - Investors King
  • Naira Tumbles to 490 as Dollar Shortage Continues

The naira tumbled against the United States dollar to 490 on Monday from 487 on Friday, as acute shortage of the greenback continued to batter the economy and the country’s foreign exchange markets.

Before falling to 487 on Friday, the local currency had consecutively closed flat at 485 for four days last week.

The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.

The global crash in the prices of crude oil, Nigeria’s main forex earner, has brought untold hardships to Nigerians.

Economic and financial experts said unless the lingering dollar supply problem was abated, the volatility in the exchange rate and the consequent economic challenges might be endless.

“The challenge with the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said.

According to the Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, the Federal Government needs to access an emergency lifeline of about $10bn from the International Monetary Fund to stabilise the exchange rate and restore investor confidence to the financial markets.

Economic and financial experts expect the naira to weaken further against the dollar as the Christmas holiday begins this week.

They also argued that the crackdown on the parallel market forex traders and the persistent scarcity of the greenback would make further weakening of the local currency inevitable.

The naira had, however, consistently closed around 305.5 a dollar at the official window since August.

A few weeks ago, the naira closed flat at 470 against the greenback over a period of over a week.

The naira had plunged to 470, down from 455 on the back of a fresh dollar shortage at the official and parallel forex markets.

Travelex and First Bank of Nigeria Limited commenced the sale of forex to Bureau De Change operators about two months ago after getting the Central Bank of Nigeria’s approval.

Some forex traders, however, said the scheme had failed to ease the biting dollar shortage in the country.

“What we get from Travelex is not sufficient,” one trader said, referring to the demand in the market.

The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said the sale of dollars to the BDC operators had yet to cut across the country.

This, he said, was partly responsible for the grueling dollar scarcity.

“There are still logistics problems in selling forex to all the BDC operators; this is what is causing this relative scarcity,” he said.

The CBN had asked the International Money Transfer Operators to sell dollars directly to the BDC operators to boost liquidity and narrow the gulf between the parallel and official market rates.

Dollar shortages have caused many companies to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global prices of oil, which accounts for over 70 per cent of Nigeria’s budget revenue.

The CBN has struggled to support the naira as the country’s external reserves continue to fall.

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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Banking Sector

CBN Grants Lotus Bank Non-Interest Banking Licence

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The Central Bank of Nigeria (CBN) on Thursday, June 17, granted a non-interest banking licence to Lotus Bank Limited.

This was contained in a statement titled ‘CBN grants Lotus Bank licence to commence non-interest banking operations’.

The statement read in part: “Lotus Bank seeks to pursue the mission of creating value and growth for all through digital innovation and best-in-class customer experience for Nigerians.”

Commenting on the grants, the founder and managing director of Lotus Capital (the pioneers of non-interest finance in Nigeria), Hajara Adeola, said the bank was starting its operations on a solid foundation of experienced leadership and a strong advisory council of experts.

Adeola explained that the bank is managed by a team of seasoned professionals and financial experts led by the Managing Director/Chief Executive Officer, Kafilat Araoye, who has over 25 years of commercial banking experience.

She added that the institution’s focus and guiding principle is ‘to deliver an alternative option to interest-based banking and to cater to the needs of not just the banked but also the underbanked and unbanked population.

According to her, non-interest banking was geared towards supporting the real sector and Lotus Bank aimed to improve financial inclusion in the country.

The founder of the bank, however, disclosed that it would operate transparent pricing models as it was the norm in non-interest banking.

The statement added: “Our values are deeply rooted in partnership. A critical component of our mission is the provision of innovative solutions that drive ethical prosperity for all stakeholders.

“We pride ourselves on digital solutions that provide our customers with the convenience of unlimited access to our services and products.”

“Our products and service offerings will include non-interest business financing, deposit products (current, savings and investment accounts) and personal financing.”

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Banking Sector

Fidelity GAIM Season 4 Final Draw To Hold On July 22

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Fidelity Bank- Investors King

One of the leading financial institution in Nigeria, Fidelity Bank Plc, has announced plans to enrich the lives of fifteen Nigerians with a total of 39 million Naira at the final draw of the “Get Alert in Millions Campaign (GAIM)” Season 4 savings promo, slated for July 22, 2021.

The savings promotion, which is specifically aimed at promoting the culture of saving among Nigerians, is one of the bank’s many initiatives aimed at rewarding new and existing customers for their unwavering loyalty and patronage.

Despite the fact that the promotion was halted in 2020 due to the Coronavirus (Covid-19) Pandemic and the resulting global lockdown, hundreds of Nigerians have benefited from this unique reward scheme in which lucky customers are credited with millions of naira and consolation prizes via a draw system.

The Chairman, Promo Committee, Fidelity Bank Plc, Mr. Richard Madiebo expressed his delight at the resumption of the savings promotion, stating that the campaign seeks to reward customers for their loyalty and patronage. According to Mr. Madiebo, for the past twelve years, the bank has empowered new and existing customers, providing an avenue for many to change their fortunes through its savings Promo.

He stated that the bank takes pride in keeping its promises, adding that the lender would continue to look out for innovative ways to satisfy and enrich its customers across the nation.

“And as we wind down on the 4th season of the GAIM promo, we are elated at the prospect of not only driving financial inclusion across Nigeria but also at the unique opportunity to enrich the lives of our customers especially in times of economic uncertainties”, noted Madiebo

Over the years, the leading tier two Bank has continued to intensify its efforts and innovate ways towards ensuring customer and stakeholder satisfaction. Through this promo, Fidelity Bank has promoted financial inclusion through digital channels and enriched the lives of its customers even in times of economic uncertainties.

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Banking Sector

Zenith Bank Gets Recognition for Best Corporate Governance

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Zenith Bank Plc’s strong business ethos, ethical values, and impeccable corporate governance have been rewarded with ‘Best Corporate Governance’ Financial Services’ Africa 2021 award by the Ethical Boardroom.

The bank, in a statement yesterday, said the award, published in the June 2021 edition of The Ethical Boardroom magazine, recognised the bank’s adherence to global best practices and institutionalisation of corporate governance as well as setting an industry-wide example of best practices in that field.

Commenting on the award, Group Managing Director/Chief Executive of Zenith Bank Plc, Mr. Ebenezer Onyeagwu, said: “This recognition is a testament to our commitment to quality, accountability, fairness and transparency in our engagement with all stakeholders.

“It is also an affirmation of the bank’s professionalism, ethical conduct and sustenance of global best practices and standards which is attributable to the joint collaboration of the management and staff.”
The award comes on the heels of others and recognitions that the bank has garnered in recent times for its track record of excellent performance and commitment to global best practices.

For instance, Zenith Bank was voted as Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020; Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, and Best Corporate Governance’ Financial Services’ Africa 2020 by the Ethical Boardroom.

Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking by The Banker Magazine.

Similarly, the bank was recognised as Bank of the Decade (People’s Choice) at the THISDAY Awards 2020, Retail Bank of the year at the 2020 BusinessDay Banks and Other Financial Institutions (BOFI) Awards, and Best Company in Promotion of Good Health and Well-Being as well as Best Company in Promotion of Gender Equality and Women Empowerment at the Sustainability, Enterprise and Responsibility (SERAS) Awards 2020.

Zenith Bank has been generally adjudged a corporate governance compliant bank by the Nigerian Exchange Limited (NGX) hence its listing on the Premium Board of the Exchange.

The bank continues to sustain this reputation and reappraise its processes to ensure that its business conforms to the highest global standards at all times.

The bank places a premium on its core business strategy anchored on people, technology and service, to create value for its numerous clientele.

“With a team of dedicated professionals, the bank leverages its robust Information and Communication Technology (ICT) infrastructure to provide cutting-edge solutions and products through its network of branches and electronic/digital channels,” the statement added.

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