Naira Dips to N480 Against US Dollar
Low foreign exchange continues to weigh on Nigerian Naira on the parallel market popularly known as Black Market.
The local currency declined by N5 from N475 it exchanged on Monday to N480 on Tuesday as forex scarcity dictates the value of Nigerian Naira.
Nigeria’s low foreign revenue generation amid dwindling foreign reserves has disrupted economic activities and impeded manufacturers and other business owners from accessing forex for raw materials or importation of manufacturing components.
Against the British Pound, the local currency depreciated by N5 from N605 it traded on Monday to N610 on Tuesday, further highlighting Nigeria’s precarious position.
In July, JPMorgan pointed to chronic forex shortage in Africa’s largest economy, claiming the Central Bank of Nigeria has over $5 billion forex backlog despite its weak foreign reserves and low oil price.
The central bank has always supported the Naira value by constantly injecting forex into the foreign exchange market to boost available liquidity and deepen economic activities. However, low foreign revenue generation due to low demand for oil and the weak oil price has disrupted the apex bank intervention power.
Naira traded at N550 to the European single currency on the black market on Tuesday, down from N480 it was exchanged a few weeks ago.
The inability of businesses to access forex in an economy that depends on importation for most of its consumption has stalled business activities and plunged job creation.
The National Bureau of Statistics (NBS) said the unemployment rate rose to 27.1 percent or 21.8 million people in the second quarter. The same NBS on Monday reported a further increase in the inflation rate from 12.56 percent in June to 12.82 percent in July.
The persistent increase in price is expected to negatively impact consumer spending, disrupt the retail sector and hurt the economy.
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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