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Dollar Falters, Along With Yields on U.S. Treasuries

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Forex Weekly Outlook March 6 - 10

The U.S. dollar stumbled from four-month highs against a basket of currencies on Monday, in line with a dip in U.S. Treasury yields.

A crisis with the Turkish lira over the weekend remained largely contained in emerging markets.
The dollar index fell about 0.35% to 92.09, following last week’s gain of 0.5%.

The yield on U.S. Treasuries fell off 14-month highs on Monday and was last down at 1.682%, but remained near one-year highs as investors bet on an economic recovery.

Yields had jumped after the Federal Reserve last week said the U.S. economy was on track for strong growth. Investors are now looking ahead to a Treasury auction later this week, which could send yields rising again if demand is anemic, analysts said.

Over the weekend, Turkish President Tayyip Erdogan’s surprise replacement of a hawkish central bank governor with a critic of high interest rates dragged the lira down as much as 15% to 8.485 against the dollar.

“One of the key stories today is that the sell-off in the Turkish lira didn’t have any major ripple effects,” said Axel Merk, portfolio manager at Merk Hard Currency Fund in Palo Alto, California. “We have (Fed Chair) Jerome Powell speaking several times this week, and he’ll continue the story line from last week, which in my view means that Treasury yields will be contained, which is a negative for the dollar.”

Turkey’s surprise decision to replace its hawkish central bank governor supported the dollar’s safe-haven appeal.

Even with the greenback’s dip on Monday, markets have been slow to catch on to the rising dollar theme in recent weeks as investors had bet a global economic recovery would prompt buying of riskier currencies.

The Turkish lira stood at 7.75 per dollar. The lira slumped 10% on Monday, the worst plunge since 2018.

The pound was roughly flat against the dollar as investors focused on broader currency market drivers and the European Union’s threat to impose a ban on vaccine imports to Britain.

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.

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Naira

Dollar to Naira Exchange Rate Today, Tuesday, September 14, 2021

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Naira Notes - Investors King

Naira extended its decline on Tuesday as it hits N557 against the United States Dollar at the parallel market, popularly called the black market.

The local currency exchanged at N557 to a United States Dollar at the black market, representing an all-time record low against the greenback. Against the British Pound and the Euro common currency, the Naira slid to N760 and N645, respectively.

Africa’s largest economy is enmeshed in low forex liquidity caused by poor economic structure that over the years has limited and weakened the nation’s foreign revenue generation. This weak foreign revenue generation has impeded Nigeria, a largely import dependent economy, from effectively servicing her economy with necessary forex for economic activities.

The inability to service the economy with enough forex coupled with the decision of the Central Bank of Nigeria to halt the sale of forex to Buruea De Change Operators have compounded Nigeria’s forex situation and further disrupted the Naira’s outlook.

Still, the apex bank continues to post its inaccessible official rates as shown in the table below. Despite insisting that exchange rates are stipulated Central Bank of Nigeria’s rates, many Nigerians and businesses operating in the country find it hard or impossible to access forex at the central bank’s rates.

The Central Bank of Nigeria sells U.S Dollar at N410.51, while the British Pound and Euro are sold at N568.1869 and N483.6629, respectively.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
14/09/2021 550/557 754/760 640/645 70/75 430/440 310/330
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
14/09/2021 548/555 750/761 635/645
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

N.B: These tables are updated three times a day.

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Forex

Remittance to Africa Projected to Decrease in 2021

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Money Transfer - Investors King

Remittances to African countries are expected to decrease by 5.4 percent from $44 billion in 2020 to a projected total of $41 billion in 2021, due to the effects of Covid 19 pandemic, according to findings of Continental Migration Report 2021.

The report titled, “African regional review of implementation of the Global Compact for Safe, Orderly and Regular Migration,” was produced by the Economic Commission for Africa (ECA) in partnership with the African Union Commission (AUC). It builds from four sub-regional reports compiled by AUC and a summary from stakeholder consultations at the just concluded 2021 African regional review meeting on the Global Compact for migration (August 26 to September 1, Morocco ).

Although the COVID-19 pandemic was expected to lead to a decrease in remittances to Africa in 2020, findings of the reports show that by October 2020 remittances to Africa had reached approximately $78.4 billion, constituting 11.7 per cent of global remittances. Remittances have therefore demonstrated greater resilience and reliability as a source of capital in Africa than foreign direct investment flows.

It recommends that governments across the world should take effective action to facilitate and boost remittances in view of supporting the fight against COVID-19 and ultimately building a more sustainable post-pandemic world

According to the report, the costs associated with sending remittances to Africa are some of the highest in the world. Until very recently, average transaction costs were equivalent to 8.9 per cent of the amount being sent for a remittance payment of $200,

With respect to the cost of sending money, the report says Africa is still far from achieving the 3 percent target set out in Sustainable Development Goal 10.

The Addis Ababa Action Agenda of the Third International Conference on Financing for Development and Sustainable Development Goal indicator 10(c) provides that countries should, by 2030, reduce to less than 3 percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 percent.

Remittances are estimated to constitute approximately 65 per cent of the income of some receiving countries and senders spend an estimated 15 percent of their income on remittances.

For 25 African countries, all of which have large diaspora populations, remittances are the primary source of national income.

In response, a number of African countries have taken action to lower the costs of remittance transfers. Some countries also offer diaspora bonds to investors and have relaxed foreign exchange controls to allow for electronic and mobile money transfers at reduced costs.

“It should be noted, in that regard, that the use of digital money transfer platforms reduces transfer fees in Africa by an average of 7 per cent,” says the report.

“Private financial institutions also offer incentives to encourage members of diaspora communities to use their services, including low transaction fees for remittances, and facilitate diaspora-initiated projects, especially in the real estate sector. These measures all promote the financial inclusion of migrants and their families.”

The report recommends that member States should support migrants and their families through the adoption of laws and regulations to facilitate the sending and receiving of remittances, including by fostering competition among banks and other remittance handling agencies with a view to establishing low-cost transfer mechanisms.

African countries should also make every effort to reduce the transfer costs associated with remittance payments, inter alia, by making more extensive use of digital transfer solutions, such as MPESA, and by streamlining the regulatory constraints associated with international money transfers. African States should also engage with destination countries to identify ways to enhance the provision of basic services to migrants in those countries.

To achieve Global Compact objectives 1, 3, 7, 17 and 23, member States should implement steps proposed in the context of regional economic community-led dialogues on migration; and consider the increasingly important role played by diaspora communities in fostering development, including through remittance payments, skills development initiatives and the adoption of emerging technologies.

ECA projects that remittance inflows to Africa could decline by 21 percent in 2020, implying $18 billion less will go to the people who rely on that money. It is therefore critical to preserve this essential lifeline. As the world enters an economic downturn, remittance flows will be more important than ever for the poorest and most vulnerable people, espcially those without access to economic and social safety nets.

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Naira

Dollar to Naira Exchange Rate Today, Monday, September 13, 2021

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Naira Exchange Rates - Investors King

Naira plunged to all time low against its global counterparts at the parallel market, known as the black market, despite efforts by the Central Bank of Nigeria to curb further decline of the embattled currency.

The Nigerian Naira exchanged at N550 to a United States Dollar on Monday at the black market, representing an all-time record low against the greenback. Against the British Pound and the Euro common currency, the Naira slid to N750 and N636, respectively.

Africa’s largest economy is enmeshed in low forex liquidity caused by poor economic structure that over the years has limited and weakened the nation’s foreign revenue generation. This weak foreign revenue generation has impeded Nigeria, a largely import dependent economy, from effectively servicing her economy with necessary forex for economic activities.

The inability to service the economy with enough forex coupled with the decision of the Central Bank of Nigeria to halt the sale of forex to Buruea De Change Operators have compounded Nigeria’s forex situation and further disrupted the Naira’s outlook.

Still, the apex bank continues to post its inaccessible official rates as shown in the table below. Despite insisting that exchange rates are stipulated Central Bank of Nigeria’s rates, many Nigerians and businesses operating in the country find it hard or impossible to access forex at the central bank’s rates.

The Central Bank of Nigeria sells U.S Dollar at N410.51, while the British Pound and Euro are sold at N568.1869 and N483.6629, respectively.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

 N.B: These tables are updated three times a day.

 

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