Naira Slides Against the US Dollar Across Key Forex Markets
The Nigerian Naira slipped against the United States dollar on Tuesday after reports that the Vice President had a meeting with the Ministers and MDAs heads to review plan to have a single-window platform for importing and exporting processes in Nigeria.
The local currency slipped by N5 from N455 it traded against the US dollar earlier on Tuesday on the black market to N460. While against the British Pound, the Naira remained at N555 it exchanged last week.
This is not the same against the Euro single currency as the local currency gained N3 from the N498 it traded on Monday to N495.
On the Investors and Exporters Forex Window, the Naira lost 63 kobo against the US dollar to trade at N386.63. This was slightly higher than the N386.33 it opened the day.
Activity on the I&E Fx Window surged from $63.44 million traded on Monday to $90.9 million Tuesday.
However, scarcity continues to dictate foreign exchange rates across key forex markets as traders fear the apex bank may finally scrap other foreign exchange windows in a move to have a single forex rate for the nation.
Mr. Laolu Akande, the Senior Special Assistant on Media and Publicity to Vice President, on Tuesday tweeted that the vice president finished presiding over a meeting on National Single Window Trading Platform Committee.
He said, “VP Osinbajo just finished presiding over a meeting of National Single Window Trading Platform Committee, with some ministers-including Finance; Industry; & MDAs heads: Customs & NPA to review plan to have a Single Window platform for all importing & exporting processes in Nigeria.”
This is in line with the unconfirmed report that the central bank and the federal government are working on a single foreign exchange rate for the currency to hurt speculators and hoarders manipulating forex rates for personal gain.
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.
Nigeria’s Foreign Exchange Inflows Decline by 43.2% in May
CBN Says Foreign Exchange Inflows Decline to $5.52bn in May
The total foreign exchange inflows into Nigeria in the month of May declined by 43.2 percent, according to the Central Bank of Nigeria’s report.
The report said the COVID-19 pandemic negatively impacted capital inflows during the month as the total foreign exchange inflows dropped to $5.52 billion.
It said “Inflows through the CBN and autonomous sources were negatively impacted.
“On a month-on-month basis, foreign exchange flows into the economy declined to $5.52bn in May 2020.
“The decline in inflow, relative to the level in April 2020, was attributed to the lower receipts from oil sources, which fell sharply by 55.2 per cent because of the continued fragility in global crude oil demand.
“Inflow through autonomous sources, particularly invisible purchases, declined by 7.0 per cent to $3.51bn, relative to the preceding month, while there was a 66.2 per cent fall in inflow through the CBN, which stood at $2.01bn in May 2020.”
However, foreign exchange outflows from the country declined by 23.9 percent to $2.50 billion in the month. Likely because of forex scarcity and the central bank forex rate adjustments that curbed outflows by foreign investors.
A break down of the report showed that outflow through the apex bank declined by 30.9 percent to $2.19 billion, below what was recorded in April.
But outflow through autonomous sources, mainly imports and Invisibles, rose by 152.2 percent to $0.32 billion. Higher than the amount reported for the month of April.
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