The Naira continues its decline against global counterparts as the local currency exchanged at N1005 to a British Pound Sterling on Sunday at the black market.

Against the United States Dollar, the Nigerian Naira traded at about N815 while a unit of Euro common currency was exchanged at N870 to a Naira.

At the interbank forex section, the Nigerian Naira slid to N440.26 against the United States Dollar and dipped marginally against the Euro common currency to N431.2787. Naira, however, appreciated against the Pound to N493.2673.

International Monetary Fund (IMF) and other multilateral financial institutions have said the huge difference between the black market and the Central Bank of Nigeria (CBN) managed interbank section is the bane of Nigeria’s currency racketeering.

In October 2021, Vice President Osibanjo explained why the forex differential is the reason why Nigeria continues to struggle with low capital importation and investment.

According to him, “As for the exchange rate, I think we need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply,” the vice president said.

“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.

“Anyway, all those are issues that when the CBN governor has time to address, he will be able to address in full.”

Crude Oil

Crude oil opened lower on Monday following reports that China is planning to up COVID-19 restrictions in an effort to curb the rising number of victims.

Brent crude oil, the international benchmark for Nigerian type of oil, has since pared losses to $98.66 a barrel at 11:20 am, up from $97 it opened when the news of Chinese Covid-19 was made public.

Pounds Sterling gained against the United States Dollar and other currencies on Thursday after Prime Minister Liz Truss announced her resignation.

The British Pound had plunged to a 37-year low within a month of her emergence as prime minister in September 2022 when Kwasi Kwarteng, the former finance minister appointed by Truss, announced a 45% unfunded tax cut.

Pounds Sterling plunged to 1.0332 against the United States Dollar on September 26, 2022 before paring losses a few days after the administration abandoned the policy following a nationwide outcry.

Two weeks later, Truss sacked Kwasi Kwarteng and appointed Jeremy Hunt from the opposition, Labour Party, to halt growing criticism from disappointed Britons grappling with a high cost of living amid low wage growth.

Earlier this week, the Consumer Price Index data showed that the inflation rate returned back to 10.1% in September, the highest in four decades and the same as July.

The parliament and the entire United Kingdom demanded answers to halt the nation’s extensive decline. With insults and poor diplomacy, Truss puts herself in an uncomfortable situation at a period when everyone was calling for a workable policy.

On Thursday, She announced her resignation. Immediately, the British Pound rebounded against the United States Dollar to 1.1296. An indication of investors welcoming her resignation.

Against the Japanese Yen, it rose to 169.74 at the time of writing. Similarly, it gained against the Swiss Franc, trading at 1.1307.

The British Pound rebounded against the United States Dollar following an announcement by Kwasi Kwarteng, Chancellor of the Exchequer, that the plans to abolish the 45% tax rate for people earning more than 150,000 pounds ($168,000) has been abandoned.

In a statement published on his official Twitter handle @KwasiKwarteng, the chancellor said “from supporting British business to lowering the tax burden for the lowest paid, our growth plan sets out a new approach to build a more prosperous economy.

“However, it is a clear the abolition of the 45 percent tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.

“As a result, I am announcing we are not proceeding with the abolition of the 45 percent tax rate. We get it, and we have listened.

“This will allow us to focus on delivering the major parts of our growth package.”

He explained that his administration’s energy policy will support households and businesses with their energy bills. While the decision to cut taxes to put money back in the pockets of 30 million hard-working British people would help grow the economy.

The British Pounds responded positively to the news as it gained against the United States to close at 1.1333 on Monday.