The naira closed firmer on the interbank market on Monday after the Central Bank of Nigeria sold dollars to some commercial banks towards the end of a trading session that featured no trades in the first four hours, traders said.
The naira closed at 305.50 to the dollar, 0.81 per cent firmer than its Friday close.
Traders said the CBN selectively sold dollars to commercial banks just before the market close, Reuters reported.
“The central bank came to the market toward the close, and sold dollars to only few banks, which helped to support the naira,” a trader said.
The CBN has been selling dollars to boost liquidity and support the naira.
The overnight naira interbank lending rate hit 21.75 per cent on Monday. The overnight naira interbank lending rate had soared to 25 per cent on Friday, having hit 22 per cent the previous day.
It stayed ultra-high on Friday, quadrupling from 6.26 per cent since Wednesday as the CBN took steps in the debt and currency markets to prop up the ailing local currency.
The naira had hit an all-time low of 353.75 to the dollar on Thursday.
The CBN sold dollars on Thursday and Friday. It also sold about N236bn ($776m) of open market operations treasury bills on Thursday, which sent the banking system into a deficit of around N39bn on Friday.
The combined operations pushed the naira up by 5.2 per cent to 308 to a dollar.
Traders said the CBN also debited commercial banks accounts for the purchases of bonds and primary market treasury bills auctioned on Wednesday, which added to the shortage of naira in the market.
Traders said interbank rates should ease this week when part of July’s budget allocation should enter the banking system.
The Federal Government distributes revenue from crude exports every month among its 36 states, and local and federal administrations.
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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