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CBN Decentralises Form A, Introduces e-Form A to Improve Invincible Transactions

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Godwin Emefiele - Investors King

In an effort to improve access to foreign exchange and facilitate invincible forex transactions, the Central Bank of Nigeria (CBN) has decentralised access to Form A by introducing an electronic version, e-Form A, for all.

The CBN disclosed this in a circular titled ‘Automation of Form ‘A’ on the Trade Monitoring System’.

The e-Form A will now replace the hard copy for all invincible transactions, PTA/BTA, medicals, education, other remittances, with effect from Tuesday, 30 November 2021.

Understanding Form A

Form A allows forex customers under the invincible category to purchase/access forex at the CBN or interbank rate to make payments for eligible services as predetermined by the Foreign exchange manual.

Therefore, Form A is a form made available by the Central Bank of Nigeria to pay for foreign exchange transactions and other remittances as stated above.

CBN has now decentralised form A to allow more people to access forex at the apex bank predetermined rate and also for proper monitoring of forex transactions, this will allow CBN better curb forex diversion to ineligible items or restricted items.

Customers are required to have a valid Bank Verification Number (BVN) and pay N5,000 as fee for e-Form A application.

Read the CBN circular “This is to inform all authorized dealers and the general public of the deployment of e-Form ‘A’.

“Accordingly, the e-Form ‘A’ shall replace the hard copy of Form ‘A’ for invincible transactions [PTA/BTA, medicals, education, other remittances etc.]with effect from November 30, 2021.

“Consequently, all authorized dealers are required to ensure that the processing of Form ’A’ shall only be done electronically on the Trade Monitoring System accessible at www.tradesystem.gov.ng.

“The general public is required to obtain a valid Bank Verification Number (BVN) from their authorized dealer Banks. The BVN is a prerequisite for customers to access the Trade System for e-Form ‘A’ application.

“The e-Form ‘A’ is web-based and allows the general public to initiate the Form from their offices/homes and submit same to the authorized dealer bank.

“A charge of N5,000 (Five Thousand Naira) as fee per declaration of e-Form ‘A’ is applicable with effect from November 30, 2021, and henceforth. There will be a direct debit from the processing bank’s current account for each declaration which should be recovered the charge on the customer by the bank. However, customers for the e-Form ‘A’ should be separated from other bank charges.”

“All hard copies of Forms ‘A’ established on or before November 2 2021 (prior to the commencement of the e-Form ‘A’) shall be utilized within 15 working days of the establishment of the Form.

“For the avoidance of doubt, all established hard copies of Forms ‘A’ for which disbursement had not been made within the transition period of 15 working days shall be deemed cancelled.

“All authority dealer banks are enjoined to inform their customers of the development for compliance.”

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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Bismarck Rewane Says Nigerian Naira Overvalued by 200%

The Nigerian Naira is overvalued by 200% compared to most global currencies that are undervalued.

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Naira Notes - Investors King

Bismarck Rewane, the managing director of Financial Derivatives Company Limited (FDC), has said the Nigerian Naira is overvalued by 200% compared to most global currencies that are undervalued.

The Nigerian Naira has been on the decline against its global counterparts since last year despite global oil prices trading at above $90 a barrel for the most part of 2022.

In recent weeks, the embattled currency plunged to a record low of N750 per dollar at the parallel market popularly known as the black market and dipped to as low as N431/US$1 at the Investors and Exporters Forex Window adopted by the Central Bank of Nigeria (CBN) as the nation’s official foreign exchange rate.

Experts have said CBN’s attitude of stage managing the Nigerian currency is responsible for its uneven exchange rates and persistent crisis.

Presently, the apex bank adopted a managed pegged foreign exchange market and intervene intermittently when necessary to prop up the value of the Nigerian Naira against its global counterparts.

This, Rewane said is responsible for the currency woes.

He said “Most currencies are undervalued but Nigerian naira [is] overvalued by 200 percent,”  the economist said at a breakfast session at Lagos Business School (LBS) in Lagos.

With the local currency under pressure and the CBN struggling with dwindling foreign reserves, it is expected that the CBN at some point in the third or final quarter of 2022 will be forced to adjust the Naira exchange rate to its global counterparts to ease pressure on Nigeria’s weak foreign reserves.

If this happened, Rewane predicted that Naira could return back to N700 per U.S. Dollar on the black market and N440 at the I&E forex window.

“The naira will likely depreciate again towards the N695/$-N700/$ range at the parallel market. The CBN will allow for a partial crawling peg in the forex market, and bring the I&E rate down to N440/$ in September”, he added.

 

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Naira

Dollar to Naira Today Monday, 8 August 2022

The Naira was exchanged at N700 for a United States Dollar at the black market while operators of that section of forex bought the U.S. Dollar at N680.

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Naira Exchange Rates - Investors King

Dollar to naira today – the exchange rate of the U.S Dollar to the Nigerian Naira today Monday 8 August 2022 remained high in Nigeria’s unregulated foreign exchange market popularly known as the black market.

The Naira was exchanged at N700 for a United States Dollar at the black market while operators of that section of forex bought the U.S. Dollar at N680.

Dollar to Naira Today Black Market

Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate 680
Selling Rate 700

Nigeria’s persistent Dollar scarcity amid rising demand continued to dictate the nation’s exchange rate. In recent weeks, the Central Bank of Nigeria (CBN) has linked the situation to activities of bureau de change operators and politicians reportedly buying and hoarding dollars ahead of the 2023 general elections.

Dollar to Naira Today Official Market

At the Investors and Exporters (I&E) forex window, the Nigerian Naira opened the day at N428.12 to a United States Dollar. An improvement from N429 it opened on Friday.

On Friday, currency traders transacted $71.92 million in forex value.

The CBN adopted the I&E rate as its official rate and launched a Naira4Dollar scheme to lure exporters, repatriating export proceeds, to the window to exchange foreign earnings at CBN stipulated rate.

Still, activity in that section of foreign exchange remained low as exporters are yet to fully embrace the Naira4Dollar initiative or understand why they should ignore N700/US$1 of the black market for N428.12/US$1 plus N5 per dollar repatriated and sold at I&E window.

Dollar to Naira Today CBN Rates

As of Friday, the CBN bought the U.S. Dollar at N417.47 and sold the American currency at a difference of N1 for N418.47 per U.S. Dollar.

The Pounds Sterling was purchased at N508.0226 per unit and sold at N506.8086. The Euro common currency was exchanged as shown below.

 

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Naira

Naira Declines to N417.19 Against the U.S. Dollar at CBN Forex Section

The Nigerian Naira declined further against the United States Dollar at the Central Bank of Nigeria’s (CBN) section of foreign exchange on Wednesday.

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Naira - Investors King

The Nigerian Naira declined further against the United States Dollar at the Central Bank of Nigeria’s (CBN) section of foreign exchange on Wednesday.

The local currency lost N0.29 or 0.07% against the American Dollar to exchange at N417.19. On Monday, the apex bank sold the U.S. Dollar at N416.9 to Deposit Money Banks (CBN), Investors King‘s research has shown.

But growing economic uncertainties amid the recent rate increase, high dollar demand by both politicians and genuine businesses looking to import raw materials, and weak economic fundamentals have plunged the Naira to N417.19 against its global counterpart.

In the unregulated black market, the Naira remained under pressure as it was exchanged at N630, a much-improved rate when compared to N750 it traded about a week ago.

Despite the apex bank discouraging patronage at that section of forex, Nigerians in need of forex have continued to patronise the black market. Most of them claimed the Deposit Money Banks mandated by the CBN to sell to them are merely collecting Dollar request forms without sales.

At the Investors & Exporters (I&E) forex window, the story is not any different as the local currency shed N0.29, or 0.34% from N427.90 it opens the day against the United States Dollar to close at N429.20. Investors and exporters at the I&E forex window transacted $123.78 million worth of dollars on Wednesday.

Meanwhile, the President of the Association of Bureau De Change Operators of Nigeria ABCON, Alhaji Aminu Gwadabe, in an interview on Saturday, called on the CBN to abolish the official pegged exchange rate and allow the forces of demand and supply to determine an appropriate exchange rate for the Naira.

He said “It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float.

“CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin.

“Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira,” Gwadabe said.

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