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CBN Set to Begin Chinese Currency Sale

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china's economy
  • 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.

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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Naira

Black Market Dollar to Naira Exchange Rate Today 24th June 2024

As of June 24th, 2024, the black market rate stands at ₦1,510 per USD, reflecting ongoing fluctuations in Nigeria’s forex landscape.

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New Naira notes

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of June 24th, 2024 stood at 1 USD to ₦1,510.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,480 and sold it at ₦1,470 on Monday, June 18th, 2024.

This indicates a decline in the Naira exchange rate value when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

  • Buying Rate: ₦1,510
  • Selling Rate: ₦1,500

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

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Forex

Zimbabwe Mandates Partial Tax Payments in New Bullion-Backed Currency

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In a strategic move to reinforce its new bullion-backed currency, Zimbabwe will require businesses to pay a portion of their taxes in Zimbabwe Gold (ZiG), Finance Minister Mthuli Ncube announced on Wednesday.

The regulations, aimed at enhancing the stability and acceptance of the ZiG, are part of broader efforts to strengthen the nation’s fiscal and monetary framework.

“The Treasury is stepping up to complement the fiscal and monetary policy framework aimed at further anchoring the currency, exchange rate, and price stability,” Ncube stated in an emailed announcement.

Since 2020, Zimbabwe has allowed taxes to be settled in the currency businesses predominantly use. However, under the new system, specific ratios will dictate the portions of taxes that must be paid in ZiG and other foreign currencies, alongside those that can solely be settled in the new unit.

The ZiG, introduced on April 5, 2024, replaced the Zimbabwean dollar, which had depreciated by 80% against the US dollar in the official market earlier this year.

Backed by 2.5 tons of gold and $100 million in foreign currency reserves held by the central bank, the ZiG is part of Zimbabwe’s broader strategy to avoid the pitfalls that led to the collapse of its previous six currencies.

“The changes will add to a raft of measures aimed at ensuring the ZiG doesn’t suffer the fate of its predecessors,” Ncube stated.

The finance minister highlighted that the new tax policy is designed to foster greater stability in the ZiG’s value and ensure it becomes a cornerstone of Zimbabwe’s economy. The government hopes that by requiring businesses to transact in ZiG, it will boost demand for the currency, thereby strengthening its position in the market.

Additional measures to bolster the ZiG include urging miners to increase gold production and extending the currency crackdown to include more stringent regulations on companies. These efforts are geared toward ensuring a steady influx of gold to back the currency, thus reinforcing its value and credibility.

Economists have noted that the success of the ZiG will depend heavily on these regulatory measures and the government’s ability to maintain a stable economic environment. The ZiG’s introduction has already shown a “positive impact” on the economy, but sustained confidence in the currency will be crucial.

“Zimbabwe’s new tax policy is a bold step towards economic stability,” said John Mangudya, Governor of the Reserve Bank of Zimbabwe. “By ensuring that a portion of taxes are paid in ZiG, we are creating a consistent demand for the currency, which will help maintain its value and prevent the hyperinflation that plagued our previous currencies.”

The move has received a mixed reaction from the business community. While some see it as a necessary step towards stabilizing the economy, others are concerned about the immediate impact on cash flow and the complexities of adapting to the new system.

“We understand the government’s need to stabilize the currency,” said Takura Mugaga, CEO of the Zimbabwe National Chamber of Commerce. “However, we urge the authorities to consider the implementation challenges businesses might face and provide adequate support during the transition period.”

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Naira

Black Market Dollar to Naira Exchange Rate Today 18th June 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of June 18th, 2024 stood at 1 USD to ₦1,480.

Published

on

New Naira notes

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of June 18th, 2024 stood at 1 USD to ₦1,480.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,510 and sold it at ₦1,500 on Monday, June 17th, 2024.

This indicates an improvement in the Naira exchange rate value when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

  • Buying Rate: ₦1,480
  • Selling Rate: ₦1,470

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

Continue Reading
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