Naira Exchange at N462 Against US Dollar on the Black Market
Naira resumed its bearish trend against the United States dollar during the weekend on the black market.
The local currency declined by N1 from the N461 it exchanged against the US dollar during the week to N462 during the weekend, its lowest exchange rate in almost two years.
This decline continues against the British Pound as the Naira depreciated by N2 from N560 it traded during the week to N562 during the weekend.
Against the Euro single currency, the Nigerian Naira remained unchanged at N502 it exchanged during the week.
On the Investors and Exporters Forex Window, the local currency was flat. Trading at N386 against the greenback, the same rate it exchanged on Thursday.
However, the total volume traded on the window declined by 48 percent from $204.90 million traded on Thursday to $105.05 million on Friday.
Market uncertainties continue to dictate Naira’s exchange rate as traders remained wary of eventualities following news that the Central Bank of Nigeria is working on a plan to unify the nation’s foreign exchange rate.
Also, the weak foreign reserves and low foreign exchange generation amid falling oil prices and rising forex demand from investors looking to move their funds out of the country are the main factors weighing on the Naira outlook.
Last week, Moody’s Investors Service said “Lower dollar inflows at a time when foreign currency borrowing will likely be more expensive for Nigerian banks will strain their foreign currency funding, despite substantial improvements compared to 2016.”
“Our moderate scenario where foreign-currency deposits decline by 20%, while loans remain constant, would increase rated banks’ funding gap to NGN1.5 trillion [$3.8 billion], and to NGN1.9 trillion [$5.0 billion] under our severe-case scenario of 35% foreign-currency deposit contraction, creating acute funding challenges.”
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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