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Offshore Yuan Falls for Second Day

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  • Offshore Yuan Falls for Second Day

The yuan’s volatile start to 2017 showed no signs of abating, with the offshore currency tumbling for a second day as China’s central bank weakened its fixing by the most since June.

The exchange rate fell 0.6 percent to 6.8883 per dollar as of 1:58 p.m. in Hong Kong, extending a 0.9 percent drop on Friday that was the biggest in a year. The offshore yuan is set to post a daily move of 0.5 percent or more in four of the six trading sessions so far this year, a magnitude it only surpassed 11 times in all of 2016.

Yuan bears were confronted by a short squeeze last week, with soaring funding costs helping the offshore currency to a record weekly advance. National Australia Bank Ltd. and Standard Chartered Bank strategists are among those who say the gains won’t last, predicting a return to yuan weakness on the back of dollar strength. The People’s Bank of China weakened the currency’s daily reference rate by 0.87 percent on Monday after the greenback rallied.

“Most people are quite realistic in expecting the firmer dollar environment to weigh on the yuan,” said Christy Tan, head of markets strategy in Hong Kong at National Australia Bank. “The liquidity conditions have not normalized yet, but expectations have not shifted drastically even with the recent bout of strong yuan appreciation.”

Falling Rates

Offshore liquidity improved on Monday. The overnight yuan interbank rate in Hong Kong, known as Hibor, fell 47.3 percentage points to 14.05133 percent, while the offshore yuan’s overnight deposit rate slumped to 12.5 percent after reaching a record 105 percent on Friday. The onshore yuan was little changed at 6.9334.

Risk reversals show bearish bets on the currency rose, with the six-month rate rising to 2.085 percent from 1.970 percent on Friday. Other indicators showed some traders are betting the surge in volatility won’t last long. While expectations for swings in the currency over the next month jumped by 1.2 percentage points last week, a gauge tracking wagers for yuan turbulence over six months fell and is now near a one-year low relative to the short-term measure.

China’s foreign-exchange reserves fell for a sixth straight month in December, dropping $41.1 billion to a five-year low of $3.01 trillion, which was in line with the median estimate in a Bloomberg’s survey of economists. The PBOC’s effort to stabilize the yuan was the main reason for the drop last month and last year, the State Administration of Foreign Exchange said in a statement.

“With FX reserves dropping toward $3 trillion, FX intervention becomes less palatable to them,” said Eric Robertsen, Singapore-based head of global macro strategy and currency research at Standard Chartered Bank, in a Bloomberg Television interview. “Over time, we expect that with further dollar strength, the yuan should continue to weaken.”

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.

Naira

Daily Naira Exchange Rates (Parallel Market, Bureau De Change and CBN Rates); Friday, January 15, 2021

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Nigeria 500 naira notes

Daily Naira Exchange Rates (Parallel Market, Bureau De Change and CBN Rates); Friday, January 15, 2021

The Nigerian Naira remained under pressure against the United States Dollar on the parallel market at N475 exchange rate, while the value has not improved against the Euro and Pound, inflation rose to 15.75 percent in the month of December to further compound Nigeria’s predicament.

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
15/01/2021 470/475 635/642 573/580 60/70 375/385 245/293
14/01/2021 470/475 630/640 570/580 60/70 375/385 245/293
13/01/2021 470/474 630/637 570/580 60/70 375/385 245/293
12/01/2021 470/475 630/637 575/580 60/70 375/385 245/293
11/01/2021 468/675 625/635 575/582 60/70 372/382 245/293
08/01/2021 467/672 622/630 570/575 60/70 365/378 245/293
07/01/2021 465/470 620/628 570/575 60/70 365/378 245/293
06/01/2021 465/470 620/628 565/570 60/70 365/378 245/293
05/01/2021 465/470 620/628 565/572 60/70 365/378 245/293
04/01/2021 465/470 620/628 565/572 60/70 365/378 245/293
31/12/2020 465/470 620/628 567/573 60/70 365/378 245/293
30/12/2020 465/470 620/628 567/573 60/70 365/378 245/293
29/12/2020 465/470 620/628 565/573 60/70 365/378 245/293
28/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
25/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
24/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
23/12/2020 470/475 622/632 575/580 60/70 350/367 245/293
22/12/2020 472/476 622/630 570/578 60/70 340/362 250/295
21/12/2020 472/476 622/632 570/580 55/68 340/362 250/295
18/12/2020 472/477 622/630 570/577 55/68 340/362 250/295

 Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
15/01/2020 460/475 630/638 570/577
14/01/2020 460/475 630/638 570/577
13/01/2020 460/470 626/633 565/576
12/01/2020 460/470 626/633 566/576
11/01/2020 460/470 620/630 560/573
08/01/2020 460/470 615/625 555/573
07/01/2020 460/470 615/623 550/570
06/01/2020 460/470 610/623 550/572
05/01/2020 460/470 615/624 550/572
04/01/2020 460/470 615/624 550/572
31/12/2020 460/470 600/626 550/573
30/12/2020 460/470 600/626 550/573
29/12/2020 455/475 600/626 550/573
28/12/2020 455/475 605/628 555/573
25/12/2020 455/475 600/628 550/575
24/12/2020 455/474 600/628 555/575
23/12/2020 460/475 621/632 568/580
22/12/2020 470/475 620/631 568/577
21/12/2020 470/475 620/631 568/577

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
1/15/2021 US DOLLAR 379 379.5 380
1/15/2021 POUNDS STERLING 516.9181 517.6001 518.282
1/15/2021 EURO 459.4996 460.1058 460.712
1/15/2021 SWISS FRANC 426.8499 427.413 427.9761
1/15/2021 YEN 3.6548 3.6596 3.6644
1/15/2021 CFA 0.6839 0.6939 0.7039
1/15/2021 WAUA 545.8708 546.5909 547.3111
1/15/2021 YUAN/RENMINBI 58.531 58.6087 58.6864
1/15/2021 RIYAL 101.0236 101.1568 101.2901
1/15/2021 SOUTH AFRICAN RAND 24.8724 24.9052 24.938

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Naira

Naira Drops to N394.67 Against US Dollar on I&E FX Window

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Naira Dollar Exchange Rate

Naira Drops to N394.67 Against US Dollar on I&E FX Window

Economic uncertainties amid the rising number of COVID-19 continues to weigh on the Nigerian Naira across key foreign exchange markets.

The Nigerian Naira depreciated against the United States Dollar on the Investors and Exporters (I&E) Foreign Exchange Window on Thursday.

The local currency depreciated by 0.34 percent to N394.67 per US Dollar, down from N392.69 it opened the day.

On Thursday, investors exchanged $215.63 million on the I&E window.

Despite efforts to ease forex scarcity with $20 billion diaspora remittance, the Naira continued to fall against global counterparts due to weak remittance inflows from developed nations.

Like other nationalities, Nigerians in the diaspora are struggling with lockdowns, surged in the unemployment rate and the drop in global earnings.

Also, weak foreign reserves amid rising debt servicing and other expenditures are hurting the central bank’s ability to intervene effectively across the foreign exchange markets as usual.

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Forex

Stanbic IBTC Shut Down Bureau De Change Business

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stanbic IBTC Insurance

Stanbic IBTC Shut Down Bureau De Change Business

Stanbic IBTC Holdings Plc has shut down its bureau de change subsidiary, Stanbic IBTC Bureau De Change Limited (Stanbic IBTC BDC) due to the change in foreign exchange inflow policy.

It should be recalled that the Central Bank of Nigeria (CBN) adjusted the policy of diaspora remittance inflow to stimulate growth and ease forex scarcity across the nation.

Therefore, Stanbic IBTC said the decision to discontinue its bureau de change operations was because of the recent changes in diaspora inflow that now affords customers the opportunity of purchasing foreign exchange (PTA and BTA) directly from Stanbic IBTC Bank at any of its branches nationwide.

In a statement signed by Chidi Okezie, Company Secretary, Stanbic IBTC, said the bureau de change business was discontinued effective from 01 January 2021 through relinquishing of its operating license.

The intention is to repurpose this subsidiary for other business ventures in the near future, and stakeholders would be duly notified when all engagements have been concluded in this regard,” it stated.

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