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Elumelu Hails Emefiele for Restoring Credibility to FX Market

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  • Elumelu Hails Emefiele for Restoring Credibility to FX Market

The Chairman of United Bank for Africa, Mr. Tony Elumelu, has praised the Governor of Central Bank of Nigeria (CBN), Chief Godwin Emefiele, for restoring credibility, transparency and confidence in the foreign exchange market.

Elumelu, who is also the Chairman of Heirs Holdings said on Sunday that recent policy initiatives of the central bank under the watch of Emefiele had restored predictability, improved market confidence and significantly added a boost to the value of the national currency, fuelling optimism that the economy would soon rebound from recession.

He, therefore, urged Nigerians to cooperate with the bank as it moves to consolidate its policies which are aimed at strengthening the naira in the days ahead.

The CBN recently introduced new FX measures, which among other things, were aimed at easing the burden of travellers and to ensure that transactions are settled at much more competitive exchange rates.

The bank had also directed all commercial and deposit banks to open FX retail outlets at major airports as soon as logistics permit.

Furthermore, as part of efforts to further increase the availability of FX to all end-users; the CBN said it had decided to significantly reduce the tenor of its forward sales from the former maximum cycle of 180 days, to no more than 60 days from the date of transaction.

These initiatives as well as its steady intervention in the market saw to the significant appreciation of the naira exchange rate against the dollar, hovering around N450/$1 at the parallel market as at Sunday.

Also on Sunday, the central bank directed all commercial banks to open teller points for retail FX transactions as part of the efforts to meet the demand for foreign exchange.

The initiative is to ease access to buying and selling of the greenback in all locations as well as ensure access to FX by bank customers and other users, without any hindrance.

The central bank stated this in a circular titled: “Update to Foreign Exchange Directives” dated March 3, 2017, which was signed by its Director, Financial Markets Department, Dr. Alvan Ikoku.

In addition, the central bank directed all banks to ensure that they have electronic display boards in all their branches, showing rates of all trading currencies, adding that customers must insist on processing FX transactions based on the displayed rates.

“Banks are mandated to process and meet the demand for travel allowances (PTA/BTA) by end-users within 24 hours of such applications, as long as the end users meet basic requirements already outlined in earlier directives; and banks are mandated to process and meet demands for school fees and medical bills within 48 hours of such application,” it said in the statement.

The central bank warned that non-compliance with its directives would attract sanctions, including but not limited to being barred from all future CBN foreign exchange interventions.

These measures, according to the central bank, are also expected to further increase FX availability to all end-users and ensure that a fair and verifiable exchange rate operates in the market.

In line with its resolve to sustain the positive momentum in the FX market, the CBN at the weekend pumped additional $350 million into the market. The intervention took the total amount supplied to the market by the central bank last week alone to $570 million and was expected to further crash the value of the dollar in the coming days.

The naira traded between N450 and N460 to a dollar at some parallel market points in Lagos last Friday.

The consistent and forceful intervention by the central bank clearly brought panic among speculators who were yet to recover from the losses some of them have suffered in the last two weeks owing to the sharp and sudden appreciation of the naira, according to market sources.

Commenting on the development, the Acting Director, Corporate Communications, Isaac Okoroafor, noted that with the improving reserve levels, the central bank was determined to continuously make forex available to all genuine customers through their banks, advising those hoarding the greenback to reduce their losses by selling down their dollar stock.

Sources also spoke of the likelihood of a liquidity glut as banks were beginning to send out sales people to scout for customers to buy the dollars in an effort to avoid losses arising from the expected further appreciation of the naira.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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