- FX Market Gets Boost as Travelex Sells Dollars to BDCs
Liquidity in the foreign exchange (FX) market got a boost, following yesterday’s sale of dollars to authorised Bureau de Change (BDC) operators in the country by Travelex.
In line with the Central Bank of Nigeria’s (CBN) directive, 2,529 BDCs got $8,000 each from Travelex for onward sales to retail customers. This amounted to a total of $20,472,000 that the currency dealers received.
The development is expected to improve liquidity in the market and also make dollars more available to retail customers.
The President, Association of Bureau de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, who confirmed the cash injection, expressed optimism that the intervention would help improve dollar supply in the market.
“We are happy because the pressure in the market has eased. But our members are not happy because we are not part of the policy. Up till now, our volume has been capped at $8,000 and our buying rate is still N381 to the dollar, which is far higher than the selling rate of the banks.
“We have written to the central bank, especially on the issue of rate disparity, so that people would not take advantage of the opportunity to round trip,” the ABCON president said.
The naira traded between N440/$ and N445/$ at some parallel market points in Lagos.
The CBN also revealed yesterday that it would sell dollars via a book-building process, a process of capturing demand in the market, to clear the backlog of dollar demand for companies importing machinery, airline equipment, and petroleum products.
Under this arrangement, bidding firms were required to pay the naira equivalent for their dollar bids on the spot market yesterday, while the dollars will be delivered in two months time, Reuters reported. But the CBN did not say how much it would offer at the sale.
The CBN recently introduced new FX measures, which among other objectives was aimed at easing the burden of travellers and ensuring that transactions are settled at much more competitive exchange rates.
The CBN, in addition, yesterday distanced itself from news making the rounds and a video in circulation on various social media platforms, alleging that the central bank and the federal government were behind the arrest of one Mr. Babatunde Gbadamosi, a Lagos-based businessman and former governorship candidate by the Department of Security Services (DSS).
It was alleged that Gbadamosi had exposed in detail the monumental organised foreign currency fraud under the Muhammadu Buhari administration and officials of CBN, which according to reports, led to the fine-tuning of the country’s FX policy.
Addressing a media briefing on the sidelines of a workshop for financial journalists in Sokoto, the acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, stressed that there was no link between the naira rally and the arrest of Gbadamosi.
Okorafor said: “There is a trending video saying that the naira has appreciated, somebody is in detention. I don’t know how Nigerians try to establish these links.
“This is falsehood there and there is no relationship. Somebody did something criminal, the law caught up with the person and he wants to use that to make himself a victim.
“I saw a video clip that circulated about somebody saying that we were selling dollars at 61 kobo.
“I want to state categorically that there is no relationship whatsoever between the allegation by the so called person that dollar was being sold at 61 kobo and the current appreciation of the naira.”
Okorafor explained that what led to the recent appreciation of the naira against the dollar was because the CBN did a lot of intelligence on the market and realised that much of what was driving demand for FX was a bubble and speculative attacks against the naira.
According to him, the CBN also decided to ease the demand for FX for personal travel allowance, schools fees and medicals by pumping dollars into that segment of the market.
“The other issue was that the level of our foreign reserves before now, we did not feel was comfortable enough to do the kind of intervention we needed. Now, we have decided to intervene at this time because we are a bit more comfortable with the level of external reserves.
“That was why when we intervened, the market reacted positively and the naira started gaining strength.
“As proof that, when we supplied $500 million to the market, only $371 million was taken up. That tells you that it was all a bubble. The real demand was $371 million. When we supplied $230 million, only $221 million was taken up.
“So, anybody who has contravened the law and the security agencies have caught up with him, should go and face his or her case and stop causing confusion among participants in the market,” the CBN spokesman said.
MILO Cereal Launches New Online Campaign, ‘Beast Mode – Activated’
MILO Cereal has launched its first major marketing campaign for its newly launched Protein cereal, via independent creative communications agency Connecting Plots.
Building on MILO’s brand message of fuelling active kids, the new campaign platform, ‘Beast Mode – Activated’, evolves the master brand’s focus on team sports.
This aims to celebrate how MILO Protein helps active kids unleash their own full potential, take their training to the next level and successfully compete with their peers.
The campaign launched on 16 April and will run across various social channels and online videos.
Connecting Plots creative partner Dave Jansen said the approach to the MILO Protein cereal campaign was about tapping into the teen mindset and being less overt and more authentic.
“Creating advertising that doesn’t feel like a ‘sell’ is the challenge when targeting teens,” Jansen said in a statement.
“We’ve shied away from the polished tropes of traditional, achievement driven sports ads to bring this to life in a way that hopefully gives life to a teenager’s desire to do their best, feel like they are stepping into their future adult self and showing how MILO Protein Cereal can help on that journey.”
Cereal Partners Worldwide’s marketing manager, Keara Deignan, added: “Aussies grew up with MILO cereal, it’s a staple of every Australian pantry.
“However, we’ve seen that as teens start to carve out their own identities, their consumption habits change so this product aims to keep pace with their active on-the-go lifestyle.”
Global Digital Consumer Spent $900B In 2020 – Mastercard
According to Mastercard’s latest Recovery Insights report, this amounted to an additional $900bn being spent in retail online around the world in 2020. Put another way: in 2020, e-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019.
For retailers, restaurants and other businesses large and small, being able to sell online provided a much-needed lifeline as in-person consumer spending was disrupted.
Roughly 20-30% of the Covid-related shift to digital globally is expected to be permanent, according to Mastercard’s Recovery Insights: Commerce E-volution. The report draws on anonymised and aggregated sales activity in the Mastercard network and proprietary analysis by the Mastercard Economics Institute. The analysis dives into what this means by country and by sector, for goods and services, and within countries and across borders.
“While consumers were stuck at home, their dollars traveled far and wide thanks to e-commerce,” says Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “This has significant implications, with the countries and companies that have prioritized digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital.”
Venmo Launches Cryptocurrency Trading
Venmo, owned by PayPal, is launching cryptocurrency trading for four major coins: Bitcoin (BTC), Ether (ETH), Litceoin (LTC) and Bitcoin Cash (BCH).
This service set to be widely available within the new few weeks, Venmo’s 70 million+ customers will be able to buy, hold and sell crypto directly within the Venmo app. The launch is offering users access to in-app guides to help them to better navigate the cryptocurrency trading space and will encourage them to share their cryptocurrency experiences via the Venmo feed.
Venmo users will be able to buy as little as $1 worth of cryptocurrency and can use either funds from their Venmo balance or from a linked bank account or debit card to buy and sell their holdings.
Over 30% of Venmo customers have already begun to purchase cryptocurrency or equities, according to the company’s research into 2020 customer behavior. Of these, 20% began their purchase during the COVID-19 pandemic, suggesting that the public health and concurrent economic crisis has accelerated trends in digitization and experimentation with new financial technologies.
Support for cryptocurrency on Venmo is facilitated through a partnership with Paxos Trust Company, a regulated provider of crypto products such as its stable coin and other services. Venmo owner PayPal is also the holder of a conditional Bitlicense from the exacting New York State Department of Financial Services. Conditional licensees, such as PayPal, are required to pair off with firms that have already been granted full-blown licenses — as, in this case, has Paxos.
Just under a week ago, PayPal CEO Dan Schulman hinted at developments underway since the payments giant first went live with its crypto offering in the United States in November of last year. Schulman said that PayPal aims to support the use of crypto for everyday transactions and to tap into smart contracts and other, more expansive features of blockchain technology. He also pitched the company’s vision of leveraging crypto for the attainment of a more “inclusive economy,” in which “things will be done much differently than today.”
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