Forex

CBN Set to Begin Chinese Currency Sale

Published

6 years ago

June 8, 2018

CBN Set to Begin Chinese Currency Sale

Following the currency swap deal signed last month with the People’s Bank of China last month, the Central Bank of Nigeria has said it may conduct bi-weekly bidding sessions for the sale of Chinese currency to authorised dealers.

The CBN, in May, signed the agreement with the PBoC to facilitate trade between the two countries and enhance foreign reserve management, making Nigeria the third country in Africa (after South Africa and Egypt) to sign such a deal with China.

The PBoC-CBN Bilateral Currency Swap Agreement will allow the two countries to swap a total of 15 billion renminbi for N720bn, or vice versa, in the next three years. The deal can be extended by mutual consent.

The Director, CBN, Financial Markets Department, Dr. Alvan Ikoku, in a circular on Thursday, said, “The swap agreement allows for both banks to, among other purposes, make available liquidity in their respective currencies for the facilitation and promotion of trade and investments across the two nations, through the purchase, sale and subsequent repurchase and resale of the Chinese yuan against the naira and vice versa.

“To achieve this, the CBN may conduct bi-weekly renminbi bidding sessions. The BCSA is for a maximum amount of 15 billion Chinese yuan for N720bn with a three-year tenor. The BCS shall be used faciliate trade and direct investment between the People’s Republic of China and the Federal Republic of Nigeria.”

According to the CBN, the currency swap will also be used to maintain financial market stability and for other purposes that both parties may agree upon.

In respect of access to the CBN bi-weekly renminbi bidding, it said, “All authorised dealers shall open Renminbi accounts with a corresponding bank and advise the CBN with its Renminbi account details which may either be with a bank onshore or offshore China.

“Importers intending to import from China shall obtain Proforma Invoice denominated in renminbi as part of the documents required for the registration of Form M. Foreign exchange purchased in the window shall not be used for payments on transactions in which the beneficiaries are not in China.”

According to the apex bank, authorised dealers shall not open domiciliary accounts denominated in renminbi for customers.

“For the purpose of this regulation, authorised dealers shall be deposit money banks and merchant banks.

The CBN said renminbi sales would be applicable only to trade-backed transactions, adding, “Importers and exporters shall continue to pay the applicable levies on imports and exports, respectively.

“Authorised dealers are required to utilise funds within 72 hours from the value date, failing which such funds must be returned to the CBN for repurchase at the bank’s buying rate.

The central bank said it would debit authorised dealers’ current account on the day of intervention with the naira equivalent of the renminbi bid request.

“The CBN reserves the right not to make a sale if in its opinion the exercise does not provide an effective price for the determination of the naira/yuan exchange rate, in which case, the CBN may choose to offer another special secondary market intervention sales (retail or wholesale) session,” it added.

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Samed Olukoya

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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Forex

Yen Hits 34-Year Low Against Dollar Despite Bank of Japan’s Inaction

Published

14 hours ago

April 26, 2024

Samed Olukoya

The Japanese yen plummeted to a 34-year low against the US dollar, sending shockwaves through global financial markets.

Despite mounting pressure and speculation, the Bank of Japan (BOJ) chose to maintain its key interest rate.

The yen’s relentless slide, extending to 0.7% to 156.66 against the dollar, underscores deep concerns about Japan’s economic stability and the efficacy of its monetary policies.

BOJ Governor Kazuo Ueda’s remarks at a post-meeting news conference did little to assuage fears as he acknowledged the impact of foreign exchange dynamics on inflation but downplayed the yen’s influence on underlying prices.

Investors, already on edge due to the yen’s dismal performance this year, are now bracing for further volatility amid speculation of imminent intervention by Japanese authorities.

The absence of decisive action from the BOJ has heightened uncertainty, with concerns looming over the potential repercussions of a prolonged yen depreciation.

The implications of the yen’s decline extend far beyond Japan’s borders, reverberating across global markets. The currency’s status as the worst-performing among major currencies in the Group of Ten (G-10) underscores its significance in the international financial landscape.

Policymakers have issued repeated warnings against excessive depreciation, signaling a commitment to intervene if necessary to safeguard economic stability.

Finance Minister Shunichi Suzuki reiterated the government’s readiness to respond to foreign exchange fluctuations, emphasizing the need for vigilance in the face of market volatility.

However, the lack of concrete action from Japanese authorities has left investors grappling with uncertainty, unsure of the yen’s trajectory in the days to come.

Market analysts warn of the potential for further downside risk, particularly in light of upcoming economic data releases and the prospect of thin trading volumes due to public holidays in Japan.

The absence of coordinated intervention efforts and a clear policy stance only exacerbates concerns, fueling speculation about the yen’s future trajectory.

The yen’s current predicament evokes memories of past episodes of currency turmoil, prompting comparisons to Japan’s intervention in 2022 when the currency experienced a similar downward spiral.

The prospect of history repeating itself looms large, as market participants weigh the possibility of intervention against the backdrop of an increasingly volatile global economy.

As Japan grapples with the yen’s precipitous decline, the stakes have never been higher for policymakers tasked with restoring stability to the currency markets. With the world watching closely, the fate of the yen hangs in the balance, poised between intervention and inertia in the face of unprecedented challenges.

Naira

Dollar to Naira Black Market Today, April 25th, 2024

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

2 days ago

April 25, 2024

Samed Olukoya

Naira to Dollar Exchange- Investors King Rate - Investors King

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,260 and sell it at N1,250 on Wednesday, April 24th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,300
Selling Rate: N1,290

Naira

Dollar to Naira Black Market Today, April 24th, 2024

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

2 days ago

April 24, 2024

Samed Olukoya

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,250 and sell it at N1,240 on Tuesday, April 23rd, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined slightly when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.