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Zimbabwe’s Gold-Backed Currency Surges 0.2% Against US Dollar

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Zimbabwe’s newly introduced gold-backed currency, known as ZiG, surged by 0.2% against the US dollar on its second day of trading.

This development has sparked both cautious optimism and renewed concerns about the nation’s financial stability.

The Reserve Bank of Zimbabwe reported that the exchange rate for ZiG strengthened to 13.53 per US dollar, compared to its initial rate of 13.56 per dollar on its debut trading day.

The slight but significant uptick in value comes as a welcome sign for Zimbabwean authorities who have been striving to establish a functional local currency amid persistent economic challenges.

The ZiG currency, introduced as the country’s sixth attempt to stabilize its monetary system, is backed by 2,522 kilograms of gold and approximately $100 million in foreign currency reserves held by the central bank.

This gold backing is seen as a crucial step to restore confidence in Zimbabwe’s currency after years of hyperinflation and currency instability.

Despite the positive momentum witnessed in the currency market, the transition to ZiG has not been without its hurdles. Banks, retailers, and utilities across the nation have been grappling with the logistical challenges of adopting the new currency, leading to disruptions in commerce nationwide.

Many businesses are still in the process of updating their systems to accommodate ZiG transactions, causing delays and confusion in payment processing.

The Zimbabwean government has set a deadline of April 12 for businesses to fully transition their electronic systems to ZiG.

However, reports indicate that only a third of the financial institutions linked to the national payments platform have been able to process ZiG payments effectively, highlighting the ongoing challenges facing the currency transition.

While the surge in ZiG’s value against the US dollar offers a glimmer of hope for Zimbabwe’s economic prospects, experts caution that sustained stability will depend on factors beyond short-term fluctuations.

Market confidence, effective monetary policies, and structural reforms will all play crucial roles in determining the long-term viability of the ZiG currency and the broader economic recovery efforts in Zimbabwe.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Forex

Bureau De Change Operators Demand CBN Reversal on New Capital Requirement

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Bureau De Change Operator

In a move that underscores growing tensions between the Central Bank of Nigeria (CBN) and the Association of Bureau De Change Operators of Nigeria (ABCON), the latter has vehemently demanded the reversal of the new capital requirements set forth by the apex bank.

The CBN recently issued fresh guidelines for the operations of Bureau De Change (BDC) operators, introducing two new categories of licenses with significantly higher capital bases.

The Tier 1 category necessitates a minimum capital requirement of N2 billion, alongside non-refundable application and license fees of N1 million and N5 million, respectively.

Similarly, Tier 2 BDCs are mandated to maintain a minimum capital base of N500 million, with corresponding fees.

This move by the CBN has elicited strong opposition from BDC operators, who argue that the new requirements pose a significant threat to their businesses.

During a virtual meeting themed “New CBN Regulatory & Supervisory Reforms for BDCs: Challenges and Way Forward,” the association presented recommendations aimed at addressing their concerns.

ABCON President, Aminu Gwadebe, emphasized the urgency of the situation, demanding the immediate reversal of the financial requirements.

He proposed a return to the previously submitted proposal, suggesting capital thresholds of N500 million for Tier 1, N100 million for Tier 2, and N35 million for Tier 3.

Also, he advocated for existing BDC owners to be given the opportunity to recapitalize instead of reapplying for licenses.

The association further urged the CBN to recognize the existing N35 million capital requirement and incorporate it into the recapitalization process.

They called for a nationwide enlightenment campaign to allay investors’ fears and an extension of the compliance timeline to two years for fairness. Furthermore, existing BDCs should be permitted to retain their generic names, and the terms of engagement for mergers and acquisitions clarified.

Operators expressed outright rejection of the new guidelines, with concerns raised about the CBN’s perception of their role in the financial sector.

Ibrahim Bala voiced the collective sentiment, labeling the guidelines as unacceptable, while Kayode Taiwo questioned the government’s motives behind the capital hike.

In response, the CBN defended its stance, emphasizing the importance of corporate governance and compliance with anti-money laundering regulations for BDC operators.

As the standoff between BDC operators and the CBN intensifies, the outcome of this dispute will likely shape the future landscape of Nigeria’s foreign exchange market.

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Naira

Black Market Dollar (USD) to Naira (NGN) Exchange Rate Today 29th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 29th, 2024 stood at 1 USD to ₦1,520.

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New Naira Notes

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 29th, 2024 stood at 1 USD to ₦1,520.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,510 and sold it at ₦1,500 on Monday, May 28th, 2024.

This indicates a decline in the Naira exchange rate when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

  • Buying Rate: ₦1,520
  • Selling Rate: ₦1,510

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

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Naira

Black Market Dollar (USD) to Naira (NGN) Exchange Rate Today 28th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 28th, 2024 stood at 1 USD to ₦1,510.

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Naira Exchange Rates - Investors King

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 28th, 2024 stood at 1 USD to ₦1,510.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,520 and sold it at ₦1,510 on Monday, May 27th, 2024.

This indicates an improvement in the Naira exchange rate when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

  • Buying Rate: ₦1,510
  • Selling Rate: ₦1,500

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

Continue Reading
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