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Naira Declines Across Key Foreign Exchange Segments

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Naira Falls Against Foreign Counterparts Across Key Forex Segments

Foreign exchange scarcity amid economic uncertainties continues to dictate the Nigerian Naira value against its global counterparts.

The local currency declined against the United States dollar on the parallel market, popularly called the black market, by N2 from N470 it traded last week to N472 on Monday.

Against the British Pound, the Naira remained unchanged at N575, its lowest in three years. The story wasn’t different with the Euro single currency as Naira succumbed to pressure and plunged by N5 from the N520 it exchanged on Friday to N525.

This decline did not stop on the black market as Investors and Exporters Foreign Exchange Window witness similar depreciation.

The Naira declined to N388.50 against the United States dollar on the I&E FX window, down from N388.40 it opened the day.

Also, activities on the window remained low as investors traded $38.72 million in turnover volume.

While the official rate stipulated by the Central Bank of Nigeria remained at N381 to a US dollar, persistent dollar scarcity continues to weigh on the Naira outlook.

Nigeria’s foreign reserves, used to back the Naira, has been on a downward trend since peaking at $45 billion in June 2019 and currently stood at $36 billion, according to the data from the central bank.

With crude oil trading at $42 per barrel and foreign capital inflow fading away due to global economic uncertainties, businesses and investors are worried the apex bank would soon lose its ability to intervene at the local forex market or support the Naira.

Also, the recent activity of the central bank at unifying the nation’s forex rate after years of saying no alluded to its fading prowess to defend the Naira.

Meanwhile, the central bank-led monetary policy committee on Monday maintained a 12.5 percent benchmark rate.

Mr. Godwin Emefiele, the Governor, CBN, said eight of the 10 members committee voted to maintain the current rates while the remaining two voted for further reduction in rates.

The governor said the members left the rate unchanged to assess the impacts of the recent 100-basis-points rate cut from 13.5 percent to 12.5 percent on the economy as a whole.

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

Transparent Exchange Rate Can Boost Nigeria’s Forex Inflow

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Global debt

Transparent Exchange Rate Can Improve Nigeria’s Diaspora Forex Inflow

Experts that gathered at a virtual summit organised by Ecobank Nigeria with a theme, ‘Financial Services & Remittance Solutions for Nigerians in Diaspora: Leveraging Ecobank’s Pan-African offering’, have said Nigeria can boost foreign exchange inflow through proper engagement and a transparent exchange rate.

Mr. Patrick Akinwuntan, Managing Director of Ecobank Nigeria, in his opening speech, said growing evidence has shown that diaspora remittances were positively impacting economies of various nations in the world.

Akinwuntan put the total annual remittances to Nigeria at around $20 billion per year, saying it boosts the nation’s foreign exchange earnings.

Speaking on how these remittances can be sustained, he said constant engagement with Nigerians abroad is imperative and it is the reason Ecobank is leveraging its digital technology through Rapidtransfer App and Ecobank mobile App to ensure affordable and easy transfer of funds by Nigerians abroad to their home country.

“Our dedicated Rapidtransfer, mobile remittance app is a game-changer for the market. It enables Africans and indeed Nigerians wherever they are to easily and instantly send money to bank accounts, mobile wallets and cash collection in – and across – 33 African countries.

“Historically, the cost of sending cross-border remittances to Africa has been far too high at about 6%-7%. Similarly, the process to send funds has long been inefficient and burdensome, with customers typically needing to go physically to an agent sometimes late in the night or in poor weather with attendant discomfort and risks.

“The Rapidtransfer app remittance solution is a quick, easy and reliable digital solution that removes all of these issues. It is indeed a game-changer for Nigerians and all Africans with its sustainable and standout affordability,” he said.

Speaking on transaction charges, the Ecobank Managing Director said transfer fee range from zero to about 3 percent as compared to 6 – 7 percent charge elsewhere.

He added that the bank’s instant transfer and transparent exchange rate is a unique factor its competitors do not possess.

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Forex

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

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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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