Dollar to Naira Exchanged at N450 on the Parallel Market
The US dollar to Naira exchange rate remained unchanged at N450 on Monday, Investors King‘s daily naira rates revealed.
According to the live data, the dollar to naira rate stood at N450 on the parallel market, popularly known as the black market.
Against the British Pound, the Nigerian naira traded at N550, down from N545 it was exchanged on Friday.
While against the Euro single currency, the Nigerian Naira exchanged at N472, gained N1 when compared to the N473 it traded on Friday.
On the foreign exchange market, the Investors and Exporters’ forex window, the local currency traded at N386.89 to a US dollar, slightly lower than the N386.50 it was exchanged on Friday.
The US dollar to naira exchange rate is largely influenced by two main factors, the activities of the Central Bank of Nigeria at the local foreign exchange market and also the nation’s foreign reserves.
Nigeria’s foreign reserves declined with the fall in global oil prices to $35.56 billion, down from $38 billion in January 2020.
This dropped in reserves impacted the central bank’s ability to intervene at the nation’s foreign exchange market, forced the CBN to devalue the currency and also compelled the monetary policy committee to increase the cash reserve ratio to 27.5 percent to further ease the demand pressure from deposit money banks.
However, with the global oil prices gradually recovering from record lows of April 2020 when global risk was at a level never seen before, the nation’s foreign reserves will improve in the near-term even though the uncertainty remains high globally, especially with the tension between the US and China at an unpredictable level and protests going on in the world’s largest economy, US, not slowing down following the killing of George Floyd, a black American.
CBN Moves Against 55 Companies, Individuals for Forex Infractions
CBN Commences Investigation into FX Activities of 55 Companies, Individuals
In an effort to ease foreign exchange pressure and better manage the dwindling foreign reserves, the Central Bank of Nigeria has intensified fight against companies and individuals taking advantage of the nation’s limited foreign reserves.
The apex bank said it has commenced investigations into the activities of 55 companies and individuals engaging in foreign exchange transactions.
The central bank attributed the reason for the investigation to foreign exchange deals outside the official Investors & Exporters (I&E) forex window.
Some of the companies being investigated are Stallion Nigeria Limited, Interswitch Nigeria Limited, as well as a leading global shipping line, CMA CGM Nigeria Shipping Limited.
Other big names on the list are Petro-Afrique Energy Services Limited, Steel Force Far East Limited, Auto Petroleum Company Limited, Cavendish Mechanicals Limited, Aquashield Oil & Marine Limited, Haitch & Elf Integrated Services Limited, Fenog Nigeria Limited, and Promasidor Nigeria Limited.
The I&E window was established to facilitate foreign exchange transactions and encourage a moderate market-determined exchange rate.
Naira Declines to N465 Against US Dollar on Black Market
Naira Falls to N465 Against US Dollar on Black Market
Nigeria’s economic uncertainties continued to weigh on the Nigerian Naira despite the Central Bank of Nigeria’s forex sale resumption.
The local currency declined by N3 from N462 a US dollar to N465 on the black market even with over $58 million injected into the forex market through the bureau de change.
Against the British Pound, Naira depreciated by N5 from N595 to N600 on Friday while it dipped by N3 against the European common currency to N548, down from N545 it traded on Thursday.
A series of weak economic fundamentals and anti-people policy continued to hurt the nation’s economic outlook and investors’ confidence.
In a recent event, the Nigerian government simultaneously raised electricity tariffs, pump prices and foreign exchange rates in an economy that depends on imports for most of its supplies.
Also, with the unemployment rate at over 27 percent, inflation rate over 13 percent and the number of companies shutting downing operation rising on a daily bases, foreign investors and even local investors are now holding back on investments needed to support the nation’s weak foreign reserves and cushion the negative effect of COVID-19.
While the exchange rates have moderated slightly from COVID-19 peak, it remains close to COVID-19 record.
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Zenith Bank Caps International Spend Limit at $100 Per Month
Following persistent forex scarcity impacting the nation, Zenith Bank has joined other deposit money banks capping international spend limits.
In an e-mail to customers, the lender said “Please be informed that the monthly international spend limit for your Zenith Bank Naira Card has been reviewed to US$100 while the use of Zenith Bank Naira cards for international Automated Teller Machine cash withdrawals is still temporarily suspended.’
It added that this review is in response to change in Nigeria’s macroeconomic factors.
The bank, however, advised those with higher international spend requirements than the US$100 stipulated above to visit any Zenith branch and request a foreign currency debit or prepaid card “which are available in US Dollar, Pounds and Euro variants.”
This is coming a few weeks after UBA, GTBank, First Bank and others capped their international spend limits to $100 for similar reasons. However, Zenith’s decision was after the Central Bank of Nigeria commenced forex sale to the Bureau De Change Operators across the country.
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