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G-7: Japan Reiterates Yen One Sided Move is Undesirable

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G-7 Summit

Finance ministers from the world’s biggest economies met in Japan to discuss global growth and reaffirmed their pledge not to deliberately weaken their currencies to stimulate growth.

While others agreed, the Japan’s Minister of Finance Taro Aso has reiterated his stance that recent gain in the yen has been one sided and speculative. His statement also hints at growing frustration inside Japan’s government about the effect on exports after the currency gained 10 percent this year.

The U.S Treasury Secretary Jacob J.Lew on Saturday object to the statement saying the yen’s movement hasn’t been overly volatile and that there is no reason to intervene to weaken the yen.

Japan’s Aso:

  • “I can understand if the currency moves up or down over time, but if you look at it over the last few weeks, you’ve got moves of 5 yen in a few days, or 8 or 9 yen. You can’t clearly say that that’s orderly.”
  • From the U.S. standpoint, the yen had weakened from around 70 against the dollar to around 120, so “it’s natural” for them to say that the current moves are orderly.
  • “They have an election and we have an election and we both have TPP talks. There are various things on our plates and we of course have to say various things as that’s our jobs. I think we always have to be careful to communicate so that emotion doesn’t get in the way of our talks.”

U.S.’s Lew:

  • “I have been clear on our analysis of current exchange-rate movements — it’s a pretty high bar to have disorderly conditions.”
  • “It’s important that the G-7 again reiterated the positions that we’ve taken in the past, which are very important, which is a commitment to refrain from exchange-rate targeting. And I think it’s important that at the G-20 we had an agreement to refrain not only from competitive devaluation but to communicate so that we do not surprise each other.”

The meeting, which brought together finance ministers and central bank governors from Canada, Britain, Canada, Italy, Germany, Japan, France and the U.S., and representatives from the World Bank, International Monetary Fund and European Union, highlighted the risks from refugee flows, political conflicts, terrorism and the possibility of a U.K. exit from the European Union.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Forex

Naira to Dollar Rate Today: Naira Exchanges at N463 to Dollar on Black Market

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interbank

Naira to Dollar Rate on Black Market Today Stood at N463

The Nigerian Naira to dollar rate slid slightly against the United States dollar on Tuesday on the black market as social unrest continues to weigh on the nation’s economic outlook.

The local currency lost N1 against the US dollar to N463 while against the British pound it remains pressured at N592.

This decline continues against the European Union’s common currency, the Euro. The Naira traded at N540 to a single Euro on the black market.

Naira to dollar rate plunged amid rising economic uncertainties and unclear policy path caused by both COVID-19 and government limited fiscal buffers to cushion the negative impacts of the virus on Africa’s largest economy.

This coupled with the ongoing social unrest by the Nigerian youths to force decorum across the Nigerian Police Force and call global attention to decades of systemic intimidation and harassment of innocent citizens.

The Nigerian Stock Exchange has been closing flat since Thursday and continued this week, suggesting that investors are concerns and wary of eventualities as they look to safeguard their investments.

Again, the projected third-quarter recession, low foreign revenue generation, weak consumer spending and the rising cost of living are some of the factors hurting the Nigerian Naira outlook.

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Naira to a Dollar Exchange Rate Dips to N462 at Black Market Amid Social Unrest

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Youth Protests Weigh on Naira to a Dollar Exchange Rate on Black Market

The ongoing youth protest in Nigeria continues to weigh on the economic outlook and investors’ sentiment across the board.

The Nigerian Naira to a US dollar exchange rate declined by N1 from N461 on Tuesday to N462 on Wednesday and in the early hours of Thursday at the black market.

Against the British Pounds, the Naira exchanged at N600, down from the N592 it traded on Tuesday. This decline continues against Europe’s common currency as the Naira dipped against the Euro by N2 from N538 to N540 on the black market.

The nationwide protest by the Nigerian youth to curb police brutality and harassment on daily basis continues to disrupt business activities in Africa’s largest economy.

Nigerian youths are saying enough is enough after the death of several youths by the law enforcement agency, Special Anti-Robbery Squad (SARS), that was constituted to curb robbery but gone rogue and made extortions, harassments and in some cases killing of innocent citizens their means of livelihood.

Despite the government disbanding the unit and promise to redeploy officers to other existing units, commands and formations, the youths are saying they want a total discharge of corrupt officers and the entire reform of the Nigerian Police Force (NPF) before they will even consider backing down on the ongoing protest, especially after politicians started sponsoring thugs to attack peaceful protesters in Lagos and Abuja.

The Nigerian Stock Exchange closed flat on Wednesday amid rising uncertainty surrounding the government’s ability to de-escalate the situation given the fact that the youths no longer trust the administration or Nigerian government.

The Naira remained weak against global counterparts and expected to plunge further once the National Bureau of Statistics (NBS) release third-quarter Gross Domestic Product (GDP) report expected by many experts to plunge the nation into its second recession in four years.

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Naira Declines on the Black Market on Tuesday

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Naira Plunges Against Global Counterparts on Tuesday on the Black Market

The Nigerian Naira declined on Tuesday on the black market despite efforts by the Central Bank of Nigeria to prop up the value of the local currency against global counterparts.

The Naira declined by N4 from N457 per US dollar it traded on Friday to N461 on Tuesday morning. Against the European common currency, the Naira fell by N1 to N538 from N537.

However, the local currency improved by N3 against the British pound from N595 it exchanged on Friday to N592 on Tuesday.

Nigeria’s weak economic outlook continues to weigh on the Naira outlook, especially with the economy projected to enter recession in the third quarter.

Despite efforts to cushion the negative effect of COVID-19 on the nation’s economy, unclear policy path amid weak business sentiment and low foreign revenue generation needed to sustain economic productivity in a majorly import-dependent economy drag on Nigerian Naira value and the entire economic outlook.

 

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