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Pound to Naira Exchange Rate Unchanged at N550 on Black Market

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British pound

Pound to Naira Exchange Rate Stood at N550 on Saturday

Pound to Naira exchange rate stood at N550 on the black market on Saturday, according to the Investors King’s daily naira exchange rate.

The Naira slid against the pound to a record low of N550 due to the drop in liquidity supply by the Central Bank of Nigeria to the foreign exchange market.

The central bank had suspended sales of forex to the bureau de change operators during the COVID-19 lockdown to ensure BDCs abide by the lockdown restrictions.

However, while the apex bank had promised to resume sales of forex soon, the weak foreign reserves, low capital importation and weak oil prices remained a challenge.

On February 26, 2020 pound to naira was exchanged at N471 before plunging to N535 on June 1st, 2020 and N550 on Saturday, today.

That was because businesses are reopening but forex scarcity remains despite efforts by the central bank to deepen its availability across key forex markets.

Godwin Emefiele, the governor of the central bank, had blamed the wide exchange rates on speculators and currency hoarders looking to profit from market irregularity.

He said “I know some of you are involved, stop now. By going to the parallel market, you are helping to overheat that market. Not only that, you will lose money because you would have bought it at a price that is not realistic.

“I can tell you that you are going to lose money. But we have seen your account already. We are appealing to you, please stop and let’s do what is right, what is legal, so that Nigeria can continue to be a good place for you and to live in.”

Speaking further, he said, “We are taking note of some of you and I can tell you, go ahead and do your business, nothing will stop your forward, your forward will be at a committed price, we are going to provide more liquidity in the market so that people can stop going to the parallel market. Don’t go there because it is not good for you. But be patient, it’s going to be orderly’’.

Pound to naira official exchange rate remains N456.66 stipulated by the central bank of Nigeria.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Forex

Nigeria’s Annual Remittance Inflow Estimated at $24 Billion -CBN

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Global debt

The Central Bank of Nigeria (CBN) has started focusing on how to better harness Nigeria’s huge diaspora remittances as seen in recent foreign exchange policy geared towards stimulating growth and fast-tracking economic recovery with foreign inflows.

On Thursday, the apex bank said it adjusted forex policy to service the economy with diaspora remittances and curb the excesses of few unscrupulous forex dealers.

In an effort to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back to Nigeria, the Central Bank of Nigeria, on November 30, 2020, announced a new policy initiative, which would help to support these objectives,” Godwin Emefiele stated.

Speaking further, he said, “Given the estimated annual remittance inflow of close to $24bn, which could help in improving our balance of payment position, reduce our dependence on external borrowing and mitigate the impact of COVID-19 on foreign exchange inflows into the country, the CBN sought to find ways to support improved remittance inflows into the country through official channels.

Based on this premise, we analyzed data on IMTO inflows into the country over the past year, and through our investigations discovered that some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira dollar exchange rate, which to a large extent resulted in a significant drop in flows into the country. It also encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining our Foreign Exchange management framework.

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CBN Forced Speculators, Hoarders to Sell Dollar Lower

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The Central Bank of Nigeria’s new forex policy has forced many speculators and hoarders at the Nigerian parallel market popularly known as the black market to start bringing out their forex at an even lower price.

The Naira to United States Dollar exchange rate moderated from N500 to N470 earlier this morning across the nation’s black market.

Similarly, the local currency exchanged at N620 to a British Pound, an improvement from N640 it was sold on December 1, 2020.

The story is not different against the European common currency as it gained slightly to N570, up from N580 it sold on Tuesday.

The improvements recorded against global counterparts was after the CBN directed that henceforth recipients of foreign remittance can now receive such fund in foreign currency (US Dollar) in cash or through an ordinary domiciliary account.

This means the apex bank planned to inject $20 billion estimated diaspora remittances per year into the real sector of the economy to force hoarders to sell their dollars or lose substantially and also to curb forex dealers in the habit of buying forex directly from the recipient’s domiciliary account because of old CBN policy that restricted them from withdrawing foreign currency in cash.

With this old policy out of the way, recipients of foreign remittances can now withdraw foreign currency and exchange it at any of the registered bureau de change operators across the nation at N392 to a US dollar. The bureau de change rate set by the central bank.

Investors King expects the policy to fast track the recovery process and enhance economic activity across the board, especially at a time when importers are looking for forex to bring in goods in order to meet the usual December high demand.

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Naira Exchange Rate Improves as CBN Plans to Flood Economy With $20 Billion Diaspora Remittances

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The Naira to US Dollar exchange rate improved by N10 to N490 on Tuesday following the Central Bank of Nigeria’s new directive that allows recipients of diaspora remittances to receive their fund in foreign currency (US Dollar) or via their ordinary domiciliary account.

The move was after the apex bank blamed the parallel market for the wide foreign exchange rate and cautioned analysts for using speculative rates as the real Naira/US dollar rate.

Therefore, the apex bank decided to inject $20 billion annual diaspora remittances into the real sector of the economy and hurt the activities of unscrupulous individuals at the parallel market.

Investors King expects this to gradually moderate the nation’s foreign exchange rate against global counterparts, deepen business activities and fast track economic recovery.

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