Naira

NMDPRA Refutes Bank of America’s Naira Projection, Says Naira to Appreciate

NMDPRA has said the Naira would appreciate against its global counterparts in 2023

Published

2 years ago

October 20, 2022

Following the Bank of America projection that the Nigerian Naira would decline by 20% in the next six to nine months, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said the Naira would appreciate against its global counterparts in 2023.

Explaining the modalities for its position, NMDPRA said most of the challenges impacting the value of the Nigerian Naira are basically demand and supply-related issues. This, the agency explained would be addressed by the completion of Dangote Refinery.

Located in the Lagos Free Trade Zone (LFZ), Dangote Refinery is expected to meet Nigeria’s domestic demand for fuel and also leave enough for exportation.

“The refinery, with 650,000 barrels per-day installed capacity is expected to double the total output of Nigeria’s existing ailing refining infrastructure and meet 100 per cent of the Nigerian requirement of all refined products will pump out fuel any moment soon,” the agency declared.

With Nigeria presently spending about $50 billion on refined petroleum products importation per annum and Dangote Refinery expected to commence operations next year, the Central Bank of Nigeria (CBN) would be able to boost dollar supply substantially and meet demand in 2023.

Investors King had earlier reported that the Bank of America sees an additional 20 percent decline in naira value in 2023. The global lender noted that the dollar will be exchanged for N520/$ within the next six to nine months.

However, NMDPRA argued that Dangote refinery capacity would be enough to ease dollar demand pressure on CBN and increase the apex bank fiscal space.

“Dangote Oil Refinery is a 650,000 barrels per day integrated refinery project under construction in the Lekki Free Trade Zone, Lagos. It is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility,” the NMDPRA said during the visit,” it said.

Mr. Devakumar Edwin, Group executive director, Strategy, Portfolio Development & Capital Projects, Dangote Industries Limited, on his part said the refinery would deepen Nigeria’s economic productivity and enhance CBN forex intervention.

He said “it can meet 100 per cent of the Nigerian requirement of all liquid products (Gasoline, Diesel, Kerosene and Aviation jet), and also have surplus of each of these products for export.

“The high volume of petrol output from the refinery would transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products,” he stated adding that the refinery would produce Euro-V quality gasoline, diesel, jet-fuel, kerosene and poly-propylene for local consumption and also have surplus of each of the products for export,” he stressed.

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Naira

Naira Drops 0.04% to N1,659.69/$1 at Official FX Market, Dips at Parallel Market

Published

18 hours ago

October 17, 2024

Iyanuoluwa Martins

The Naira fell to N1,659 per Dollar on Wednesday in the official foreign exchange market, the Nigerian Autonomous Foreign Exchange Market (NAFEX).

The local currency fell by 72 Kobo or 0.04 percent to close at N1,659.69/$1 compared with Tuesday’s closing rate of N1,658.97/$1.

The market continued to weigh the recent inflation rise after the National Bureau of Statistics (NBS) on Tuesday said Nigeria’s inflation rose to 32.70 percent in the month of September, the first time after moderating in July and August.

Analysts from the World Bank ranked Nigerian Naira as among the worst-performing currencies in sub-Sahara Africa in 2024, noting that the local currency has lost about 43 percent.

The World Bank, in its latest edition of Africa’s Pulse report, disclosed that the Naira is at the same level with the Ethiopian Birr, and South Sudanese Pound in terms of decline in the region.

The report disclosed that the continued increase in the demand for Dollars and limited Dollar inflow is responsible for Naira depreciation in the last months.

The daily supply of FX as measured by secondary data from FMDQ Securities Exchange Limited indicated that turnover slumped by $40.85 million or 18.7 percent to $177.01 million from $217.86 million.

The Naira weakened its value against the Pound Sterling in the official market by N64.28 to sell at N2,153.90/£1 compared with the preceding session’s N2,089.62/£1.

It followed the same route against the Euro as it depreciated N51.67 to quote the midweek session at N1,800.79/€1 versus the preceding rate of N1,749.12/€1.

In the Parallel market, the Naira weakened on the American currency as it closed at N1,693.32 to the US Dollar, a drop of N29.61 compared to N1,663.71/$1 it closed during the Wednesday trading session.

The Naira also dropped in its value against the British Pound Sterling in the official market by N38.17 to sell at N2,159.12/£1 compared with the preceding session’s N2,120.95/£1 and followed the same pattern against the Euro as it depreciated N31.51 to quote at N1,847.94/€1 versus the previous day’s rate of N1,816.43/€1.

The local currency also depreciated N7.07 to close at N1,204.66 per Canadian Dollar, compared to Tuesday’s N1,197.59 per CAD.

Naira

World Bank Lists Naira Among Africa’s Worst Performing Currencies

Published

1 day ago

October 16, 2024

Ugwoke Ogbodo

The World Bank has ranked Nigerian Naira as among the worst-performing currencies in sub-Sahara Africa in 2024.

The World Bank, in its latest edition of Africa’s Pulse report, disclosed that the Naira is at the same level with the Ethiopian Birr, and South Sudanese Pound in terms of decline in the region.

The report disclosed that the continued increase in the demand for dollars and limited dollar inflow is responsible for Naira depreciation in the last months.

According to the report, as of August, the Naira lost about 43 percent.

It added that by August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region.

According to the report, the Nigerian naira continued losing value, with a year-to-date depreciation of about 43 percent as of end-August.

It stated that the increase in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira.

The Naira plummeted to a new record low, closing at N1,700 per dollar in the parallel market on October 14, 2024, according to data from Bureau de Change (BDC) operators.

This represents a 0.29% drop from its previous rate of N1,695/$1 recorded on October 11, despite a surge in crude oil prices, which have surpassed $80 per barrel.

Naira

Naira Falls to N1,658.97/$1 at Official Market, Gains at Black Market

Published

2 days ago

October 16, 2024

Iyanuoluwa Martins

The Naira weakened to N1,658.97 per Dollar on Tuesday, October 15 at the Nigerian Autonomous Foreign Exchange Market (NAFEX) as the local currency fell by N106.05 or 6.8 percent to close at N1,658.97/$1 compared with Monday’s closing rate of N1,552.92/$1.

The daily supply of FX as measured by secondary data from FMDQ Securities Exchange Limited indicated that turnover slumped by $125.85 million or 36.6 percent to $217.86 million from $343.71 million.

The fall in the local currency came as the National Bureau of Statistics (NBS) released the headline inflation rate for September 2024 which showed that the Consumer Price Index rose to 32.70 percent.

This represents an increase of 0.55 percent from the August 2024 figure of 32.15 percent, after inflation dropped consecutively in the previous two months of July and August.

“In September 2024, the Headline inflation rate was 32.70% relative to the August 2024 headline inflation rate of 32.15%. Looking at the movement, the September 2024 Headline inflation rate showed an increase of 0.55% compared to the August 2024 Headline inflation rate.

“On a year-on-year basis, the Headline inflation rate was 5.98% points higher compared to the rate recorded in September 2023 (26.72%). This shows that the Headline inflation rate (year-onyear basis) increased in September 2024 when compared to the year-on-year in the preceding year (i.e., September 2023).

“Furthermore, on a month-on-month basis, the Headline inflation rate in September 2024 was 2.52%, which was 0.30% higher than the rate recorded in August 2024 (2.22%). This means that in September 2024, the rate of increase in the average price level is higher than the rate of increase in the average price level in August 2024,” the NBS report said.

Meanwhile it was a different outcome in the Parallel market, the Naira gained on the American currency as it closed at N1,663.71 to the US Dollar, a rise of N9.84 compared to N1,673.55/$1 it closed during the Wednesday trading session.

The Naira strengthened its value against the Pound Sterling in the official market by N16.41 to sell at N2,120.95/£1 compared with the preceding session’s N2,137.36/£1 and followed the same pattern against the Euro as it appreciated N13.39 to quote at N1,816.43/€1 versus the previous day’s rate of N1,829.82/€1.

The local currency also appreciated N4.07 to close at N1.197.59 per Canadian Dollar, compared to Monday’s N1,201.66 per CAD.