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Australian Economy Slows to 0.3% in Q3

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  • Australian Economy Slows to 0.3% in Q3

Australian gross domestic product slowed in the third quarter following weak consumer spending.

The economy grew by 0.3 percent, according to the Australian Bureau of Statistics report released on Wednesday. The number was below the 0.9 percent recorded in the second quarter and the 0.6 percent expected by analysts.

“The household sector drove domestic growth with increased consumption supported by moderate rises in household income,” said Bruce Hockman, Chief Economist at the ABS.

On a quarterly basis, household consumption expanded by 0.3 percent, contributing 0.2 percent to the real GDP.

“Household consumption rose 0.3%, driven by non-discretionary spending on food and housing. Spending on discretionary items slowed during the quarter.”

In an effort to boost household consumption, the ABS said government consumption and investment increased strongly during the quarter.

“Public spending was funded through increased revenue,” it said.

“General government final consumption expenditure increased 0.5%, underpinned by continued expenditure in health, aged care and disability services.”

“Public investment remained at high levels with continued work on a number of large infrastructure projects around the nation.”

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

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Naira

Dollar to Naira Today Monday, 15 August 2022

Dollar to Naira exchange rate stood at N670 on Monday at the parallel market as scarcity remained an issue amid rising demand

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NAIRA - Investors King

Dollar to naira today – Dollar to Naira exchange rate stood at N670 on Monday at the parallel market popularly known as the black market as scarcity remained an issue amid rising demand.

The Naira exchange rate to U.S. Dollar improved from N700 recorded last week to N670 today, Monday 15th August 2022. Dollar to Naira today rate is over 50 percent higher than the official exchange rate of the Central Bank of Nigeria (CBN).

Dollar to Naira Today Black Market

Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate 650
Selling Rate
670

Several experts have attributed the decline to a series of factors peculiar to the Nigerian economy. According to Mr. Jimi Ogbobine, Head of Consulting at Agusto Consulting, the wide exchange rate is as a result of supply challenges in the foreign exchange market.

He explained that this happened whenever demand across key exchange sections is higher than forex supply.

“The recent jump we are seeing is basically a result of a supply crisis in the forex market. The foundation of all of these is demand versus supply and when demand outweighs supply you will see this kind of currency depreciation,” he stated.

“If the central bank was able to meet forex demand, then we will not see this kind of price distortion. On one end, Nigeria is not able to meet forex supply and on the other end we are trying to restrict and constrict demand which means that quite a number of legitimate requests for forex are now being diverted to the parallel market.

“So, while the official market seems relatively calm, the reality of the supply shortage is playing out in the parallel market where more legitimate request for forex is being diverted to because the official market is not able to demand.”

Dollar to Naira Today Official Market

At the Investors and Exporters (I&E) forex window, the Nigerian Naira opened on at N429.67 against the United States Dollar and closed at N429.62 on Friday.

Forex trader at the window transacted $46.31 million forex value on Friday.

The Central Bank of Nigeria (CBN) adoped the I&E forex window as its official forex window to converge the nation’s exchange rates in accordance with the World Bank demand.

Dollar to Naira Today CBN Rates

As of Friday, the CBN bought the U.S. Dollar at N418.89 and sold the American currency at a difference of N1 for N419.89 per U.S. Dollar.

The Pounds Sterling was purchased at N508.7419 per unit and sold at N506.9564. The Euro common currency was exchanged as shown below.

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Forex

Arresting BDCs Will Worsen the Economy – Lemo

Tunde Lemo has said arresting Bureau De Change Operators (BDcs) suspected to be hoarding U.S. dollars will only worsen the nation’s economic position.

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BDC Operators - Investors King

The former deputy governor of the Central Bank of Nigeria (CBN), Tunde Lemo has said arresting Bureau De Change Operators (BDcs) suspected to be hoarding U.S. dollars will only worsen the nation’s economic position.

Lemo’s comment was after the Economic and Financial Crimes Commission (EFCC) reportedly raided stands of BDCs in the Wuse Zone 4 area of Abuja last week.

Speaking to the press in Abeokuta, Ogun State on Saturday, Tunde Lemo explained that it was not the activity of the BDCs that caused forex scarcity but insecurity and non-remittance of forex by the Nigerian National Petroleum Corporation recently registered as the Nigerian National Petroleum Corporation Limited.

In his words: “This (the arrest) will lead us to nowhere and worsen the dire situation. The current scarcity is caused by the security situation in the country as well as the non-remittance of Forex by NNPC, a major supplier”.

The market is sensitive to too many rules. CBN should move more to the market- determined exchange rate policy with less capital control. This is the only way to attract liquidity from independent sources. Involving EFFC, at this stage will compound the problems”.

On August 5, it was reported that Abdulrasheed Bawa, Chairman, EFCC, met with the representatives of Bureau de Change Operators in Abuja to discuss how to curb forex hoarding and activities that could impede the progress of Nigeria’s economy.

According to Bawa, BDCs activities were responsible for the over N700 per US$1 exchange rate at the parallel market popularly known as the black market.

The meeting was EFFC’s effort at addressing the alarming crash in the value of the Nigerian Naira against its global counterparts on the black market and also to come up with a collaborative strategy between the commission and BDCs, especially at the black market/parallel market.

Furthermore, the commission hoped to have similar meetings at other major Bureau de Change Operator cities like Kano, Lagos, Port Harcourt, Enugu and Calabar.

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Forex

Nigeria’s Foreign Reserves Plunged by $381 Million in a Month

Persistent dollar scarcity amid economic uncertainties ahead of the 2023 general elections continues to drag on Nigeria’s foreign reserves.

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Interbank rate






Persistent dollar scarcity amid economic uncertainties ahead of the 2023 general elections continues to drag on Nigeria’s foreign reserves.

Nigeria’s foreign reserves declined by $381 million in the last one month, according to the data available on the Central Bank of Nigeria’s (CBN) official website.

On the 6th of July, the reserves stood at $39.336 billion but dropped to $38.954 billion on August 8th, 2022, representing a decline of $381 million.

As a mono-product economy, Nigeria depends on crude oil for over 90% of its foreign revenue. However, poor infrastructure and regional crisis in the oil-rich Niger Delta have plunged the nation’s crude oil production from about 2.1 million barrels per day (mbpd) it averaged a few years back to 1.08 mbpd in July, according to the latest OPEC report released on July.

The drop in crude oil production has impeded the nation’s foreign revenue generation and forced the federal government to increase borrowing in order to plug the revenue deficit.

This, experts blamed for the nation’s rising debt servicing cost. In a recent report by the federal government, Nigeria was estimated to spend N10.43 trillion on debt servicing by 2025.

According to the International Monetary Fund (IMF), in about four years Nigeria will be spending 100% of her revenue on debt servicing.

“The biggest critical aspect for Nigeria is that we have done a macro-fiscal stress test, and what you observe is the interest payments as a share of revenue, and as you see us in terms of the baseline from the federal government of Nigeria, the revenue of almost 100 per cent is projected by 2026 to be taken by debt service,” stated Ari Aisen, a IMF Representative in Nigeria.

While Federal Government has insisted that Nigeria does not have a debt problem but a revenue problem. Patience Oniha, the Director General of the Debt Management Office (DMO), agreed that Nigeria’s rising debt will hinder the country from investing in infrastructure and the real sector of the economy.

The DMO boss said “High debt levels lead to heavy debt service which reduces resources available for investment in infrastructure and key sectors of the economy.”




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