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Naira Exchanges at N705/US$ at the Black Market

The Naira exchanged at N705 to a United States Dollar in Lagos, Abuja and a few other states

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Naira - Investors King

The Nigerian Naira exchanged lower at the parallel market, popularly known as the black market, on Tuesday amid the persistent foreign exchange scarcity and weak foreign revenue generation.

The local currency was exchanged at N705 to a United States Dollar in Lagos, Abuja and a few other states covered by our correspondent.

At the Investors and Exporters’ foreign exchange window, the Naira shed N3.45 from N431.30 it opened the day on Monday, September 5, 2022, to N434.75 at the close of business. This represents a decline of N5.13 or 1.2% from the N429.62 it traded on August 15, 2022.

Currency traders at the Investors and Exporters’ foreign exchange window transacted $99.68 million in trade on Monday, according to the data available at the FMDQ managed forex window.

At the Central Bank of Nigeria’s (CBN) regulated foreign exchange section, the Naira was exchanged at N426.28 to the United States while against the British Pounds Sterling it was transacted at N490.2646 on Monday.

The Naira traded at N422.9124 against the Euro common currency.

Crude Oil

Brent crude oil, the international benchmark for Nigerian oil, lost $4.14 from $96.96 a barrel it peaked on Monday when OPEC+ announced plans to cut production for the first time since 2020 to support price, to $92.82 per barrel on Tuesday.

The decline in oil price despite the announced production cuts was due to the report that new COVID-19 restrictions are possibly underway in China, additional interest rate increases and weaker demand for the commodity.

Global energy concern has now shifted from demand to rising interest rates and escalating inflation numbers across the globe.

“The OPEC+ news is now in the market and the focus has temporarily shifted to economic and inflationary concerns amongst which the two relevant factors are the extended COVID lockdowns in China and Thursday’s ECB rate decision,” said Tamas Varga of oil broker PVM.

Cryptocurrency

Bitcoin continues to trade below the $20,000 a coin price level ahead of Ethereum merge scheduled for September 15 to 16.

The highly risky and uncertain process is necessary to move the Ethereum protocol from Proof of Work (PoW) to Proof of Stake (PoS), a process largely expected to reduce gas fees (charges on Ethereum transfer) substantially and help bolster its attractiveness to global project inventors.

On Tuesday, Ether, the token of Ethereum, appreciated by 4.23% to ₦1,169,556 or $1,667.09 per coin while Bitcoin lost 0.31% to ₦13,868,843 or $19,827.62 a coin.

BNB, Binance token, appreciated by 1.98% to ₦197,649 or $280.76 per coin.

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

Naira to Dollar Exchange Rate Dips to N707 at the Black Market

The Nigerian Naira exchanged at N707 to a United States Dollar on the black market, a N2 decline from N705 it traded on Tuesday.

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NAIRA - Investors King

The Naira to Dollar exchange rate remained under pressure as of Wednesday, September 14, 2022, amid Nigeria’s persistent foreign exchange scarcity.

The Nigerian Naira exchanged at N707 to a United States Dollar on the black market, a N2 decline from N705 it traded on Tuesday.

At the Investors & Exporters (I&E) forex window, the Naira opened at N434.75 against the United States Dollar on Tuesday before shedding 0.11% to N436.04. Currency traders at the window (I&E) traded $83.71 million worth of currency on Tuesday.

At the Central Bank of Nigeria‘s (CBN) managed interbank forex section, the Naira was sold at N428.81 to a U.S Dollar on Tuesday. The Pounds Sterling – Naira exchange rate was  N502.9512 while the Euro traded at N436.4857.

Crude Oil

Oil prices traded lower on Wednesday as uncertainty surrounding interest rates continues to dictate demands for the commodity.

The brent crude oil, against which Nigerian oil is priced, dipped to $92.83 a barrel while the U.S. West Texas Intermediate crude oil shed 0.37% to $86.99 a barrel.

On Tuesday, U.S. data showed the inflation rate rose to 8.3% in the month of August, a strong indication that inflation pressures remain stubborn in the world’s largest economy. This coupled with European Central Bank’s comments that it will continue to raise interest rates to curb rising prices weighed on oil prices on Wednesday.

Energy investors have started lowering the outlook projections, saying rising prices would impact demand for the commodity as global economic growth slowdown.

Cryptocurrency

Like every other asset, cryptocurrency extended its decline on Wednesday ahead of Ethereum merge and transition from Proof of Work to Proof of Stake.

Bitcoin, the world’s most dominant cryptocurrency lost 3.25% to N14.65 million, or $20,250.25 per coin. While Eth, the token of the Ethereum protocol appreciated by 0.41% to N1.131 million or $1,597 a coin.

Earlier this week, cryptocurrency appreciated across the board. However, the reports that there is an arrest warrant against Do Kwon, the co-founder of the now defunct stablecoin issuer Terraform Labs, from the financial crimes unit of the Supreme Prosecutors’ Office of South Korea weighed on the cryptocurrency outlook.

 

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Naira

CBN Uses $7.6 Billion to Defend the Nigerian Naira in Five Months

The Central Bank of Nigeria (CBN) has said a total sum of $7.6 billion was used to defend the Nigerian Naira in the first five months of the year.

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Naira Exchange Rates - Investors King

The Central Bank of Nigeria (CBN) has said a total sum of $7.6 billion was used to defend the Nigerian Naira in the first five months of the year.

The bank stated in its recent monthly economic report accessed by Investors King.

In January, February and March, CBN intervened in the forex markets with $1.65 billion, $1.39 billion and $1.82 billion, respectively. This continues in the months of April and May.

The apex bank pumped $1.56 billion into the economy in April and expended another $1.318 billion in May to prop up the value of the Nigerian Naira against its global counterparts.

Despite the $7.6 billion, or N3.25 trillion (using the official exchange rate) spent in sustaining the Naira value, the local currency has shed over 100% of its value this year alone and it is presently being exchanged at over N700 to a United States Dollar at the black market.

Nigeria has official exchange rates used by the CBN and the Deposit Money Banks (DMBs), and the unofficial exchange rates, popularly available, at the black market — the main forex section patronise by most Nigerians in need of forex for various reasons.

At the CBN interbank foreign exchange section, the Nigerian Naira was sold at N428.1 to a United States Dollar to DMBs allowed to deal directly with the CBN. Presently, the Naira is exchanged at N710 to a United States Dollar on the black market. Suggesting that the unofficial rate is 65.84% higher than the CBN official rate. 

The International Monetary Fund (IMF) and the World Bank have advised Nigeria to stabilise and unify its exchange rates.

Investors King earlier reported that the World Bank President, David Malpass admonished Nigeria on currency stabilisation when he met with the Vice President, Yemi Osinbajo last week in the United States. 

Talking about the issue, Malpass stressed the economic benefits of unifying the exchange rates and the significance of stabilisation to Nigerians.

He disclosed that a unified exchange rate will significantly improve the business-enabling environment in Nigeria, attract foreign direct investment, and reduce inflation. 

Malpass also advised Nigeria on the importance of increasing its domestic revenue by enlarging the country’s tax net through improved efficiency in tax administration. 

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Naira

Naira Likely To Weaken Further; Says Nigeria Finance Minister

Nigerian Naira will decline even further despite losing over 100% of its value since President Muhammadu Buhari came to power.

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Naira - Investors King

Nigeria’s Finance Minister, Mrs. Zainab Ahmed has said the Nigerian Naira will decline even further despite losing over 100% of its value since President Muhammadu Buhari came to power.

The minister disclosed this in an interview granted in Egypt and monitored by Investors King.

This is coming amid the scarcity of foreign exchange, widespread insecurity, increased unemployment and high inflation which has increased to 19.64 percent on a year-to-year basis in July.

Investors King had reported that the prices of goods and services in Nigeria rose to a 17-year high in July 2022, pushing the Consumer Price Index which measures the inflation rate to a 19.64% high, the highest since September 2005 when inflation peaked at 24.32 percent. 

Nigeria’s currency has been on a free fall against its global counterparts this year. On the black market, the exchange rate between the naira and the US dollar stood at N708/$1 on Friday, 9th September 2022. Naira traded against the dollar at the same price on Thursday. 

However, the exchange rate at the official Investors and Exporters window dipped further to close at N436.32/$ on Thursday.

Meanwhile, forex supply fell marginally by 54.4% to $37.5 million when compared to $82.23 million which was traded at the official market on Thursday.

While on the cryptocurrency peer-to-peer market, specifically on Binance, the dollar traded at the rate of N705.30/$. 

The country’s foreign reserve stood at a gross of $39.43 billion and a liquid of $39.18 billion. 

Nigeria which is widely acclaimed as Africa’s largest economy, however, saw its currency “Naira”  rated as the 11th worst performing currency in the world and fourth in Africa

Overall in Africa, the Zimbabwean dollar which has lost 99.33 percent of its value, was rated as the worst performing currency in Africa and the second in the world. Venezuela’s Bolivar was the worst-performing currency against the dollar with a depreciation rate of 99.39 percent. 

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