Forex

CBN Permits International Oil Companies to Inject Liquidity into Foreign Exchange Market

This decision aims to inject liquidity into the Investors & Exporters (I&E) foreign exchange market, according to a reliable source familiar with the matter.

Published

11 months ago

July 6, 2023

Investors King

In a significant move to address the liquidity crunch in Nigeria’s foreign exchange market, the Central Bank of Nigeria (CBN) has granted permission to International Oil Companies (IOCs) to resume the sale of US dollars to banks.

This decision aims to inject liquidity into the Investors & Exporters (I&E) foreign exchange market, according to a reliable source familiar with the matter.

The lifting of the restriction on IOCs selling dollars to dealing member banks is expected to alleviate the existing backlog of US dollar demand and provide a boost to the Investors & Exporters window.

The move signifies a departure from the policies of the previous governor, Godwin Emefiele, as the CBN’s acting governor, Folashodun Shonubi, works to implement reforms and deliver on President Bola Tinubu’s mandate for monetary policy house cleaning.

Previously, Nigeria’s currency, the naira, was subjected to a hard currency peg, draining dollars from the economy and unsettling investors.

However, the CBN’s decision to float the naira ended the peg and initiated reforms that aimed to increase the supply of dollars. The value of the naira plummeted by over 60 percent in response to this long-overdue reform.

In a positive sign, the naira experienced a 1.2 percent gain at the I&E window following the recent developments. The foreign exchange turnover also witnessed a notable increase of 20 percent, reaching $89.37 million compared to the $73.86 million worth of trades recorded on the previous trading day.

The CBN’s focus on bolstering dollar supply is crucial in alleviating the pressure on the naira and stabilizing the foreign exchange market. By allowing IOCs to resume the sale of US dollars to banks, the central bank aims to facilitate smoother transactions and provide businesses and individuals with greater access to foreign currency.

This recent policy shift reflects the determination of Nigeria’s new leadership to prioritize economic stability and address the challenges facing the foreign exchange market.

While the road to complete recovery may be long, these developments signify a step in the right direction, bringing hope for a more balanced and thriving economy.

Up Next

Nigerian Banks Introduce Mobile Apps and Internet Banking for Foreign Currency Conversion, Disrupting Black Market Trading

Don't Miss

Central Bank of Nigeria’s Unsettled FX Backlog Threatens Investor Confidence and Currency Reform

Investors King

Comments

Naira

Black Market Dollar to Naira Exchange Rate Today 17th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Published

18 hours ago

May 17, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,560 and sold it at ₦1,550 on Thursday, May 16th, 2024.

This indicates a slight 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: ₦1,540
Selling Rate: ₦1,530

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.

Forex

SEC and ABCON Explore Collaboration for ‘Kolectyomoni’ Digital Currency Platform

Published

19 hours ago

May 17, 2024

Samed Olukoya

The Association of Bureaux De Change Operators of Nigeria (ABCON) has initiated talks with the Securities and Exchange Commission (SEC) to explore collaboration on its upcoming digital currency market platform, ‘Kolectyomoni’.

This move was underscored during an official visit by ABCON representatives to the newly appointed Director General of the SEC, Dr. Timi Agama. Aminu Gwadabe, President of ABCON, conveyed the association’s eagerness to engage with SEC to ensure the smooth operation of its digital currency platform.

Gwadabe emphasized that ABCON recognizes the regulatory oversight of SEC in the financial sector and seeks its guidance to navigate the complexities of the digital currency market.

He pointed out that while digital currencies hold immense potential for financial inclusion and innovation, they also present regulatory challenges that require collaborative efforts between industry stakeholders and regulatory bodies.

Highlighting the significance of embracing digital currencies, Gwadabe noted, “The future of BDC’s business is digital currency.”

He stressed the growing adoption of digital currencies among Nigerians, citing statistics that reveal a rising number of participants in the digital currency ecosystem, with a substantial market size of $9 billion annually.

In response, Dr. Timi Agama expressed SEC’s openness to support and facilitate the growth of the digital currency sector in Nigeria.

He acknowledged ABCON’s initiative in launching the ‘Kolectyomoni’ platform and assured of SEC’s cooperation in providing regulatory guidance and oversight.

Agama reaffirmed SEC’s commitment to fostering innovation in the financial sector while ensuring investor protection and market integrity.

He underscored the importance of collaboration between regulators and industry players to develop robust frameworks that foster innovation and safeguard against potential risks.

Furthermore, Agama encouraged ABCON to finalize the development of the ‘Kolectyomoni’ digital currency platform and submit it to the SEC for thorough review and assessment by the technical team.

He emphasized the need for timely regulatory oversight to address emerging trends in the digital currency market and maintain regulatory compliance.

Naira

Black Market Dollar to Naira Exchange Rate Today 16th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Published

2 days ago

May 16, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,530 and sold it at ₦1,520 on Wednesday, May 15th, 2024.

This indicates a decline in the Naira exchange rate compared to the current 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.