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22/07/2021

Naira falls at official market despite 44.3% increase in dollar supply

The exchange rate between the naira and the US dollar closed at N411.67/$1 at the official forex market.

Naira depreciated against the US dollar on Monday, 19th July 2021 to close at N411.67/$1. This represents a N1.29 gain when compared to N410.38/$1 that was recorded on Friday, 16th July 2021.

At the parallel market, however, the naira appreciated against the US dollar at an exchange rate of N503/$1, a gain of N3 when compared to the N506/$1 that was recorded on Friday 16th July 2021.

On the other hand, the dollar supply at the official forex market rose by 44.3% on Monday to stand at $168.19 million as external reserve continues its rebound.

Trading at the official NAFEX window

Naira depreciated against the US dollar at the Investors and Exporters window on Monday to close at N411.67/$1 as against the N410.38/$1 recorded on Friday, 16th July 2021.

The opening indicative rate stood at N411.10/$1 on Monday, representing a 10 kobo gain when compared to N411.20/$1 recorded in the previous trading session.
An exchange rate of N412.20/$1 was the highest rate recorded during intra-day trading before it settled at N411.67/$1, while it sold for as low as N400/$1 during intra-day trading.
Meanwhile, forex turnover at the Investors and Exporters (I&E) window rose by 44.3% on Monday, 19th July 2021.
According to data tracked by Nairametrics from FMDQ, forex turnover increased from $116.55 million recorded on Friday, 16th July 2021 to $168.19 million on Monday, 19th July 2021.
Cryptocurrency watch
The world’s most popular and largest cryptocurrency, Bitcoin, recorded a significant increase on Wednesday evening to close at $31,978.52, rising by 7.11%, after dropping below $30,000 on Tuesday for the first time in 4 weeks.

Bitcoin and other cryptocurrencies recovered on Wednesday after a brutal sell-off, with the world’s biggest digital coin climbing back above $30,000.
The price of Bitcoin which was up by over 7%, traded as high as $32,383 on Wednesday, according to Coin Metrics, with other smaller cryptocurrencies Ether and XRP also rebounding, up around 9% and 6% respectively.
The crypto market saw significant selling on Tuesday, with Bitcoin falling below the $30,000 mark. The plunge came on the back of news that the New Jersey attorney general issued a cease-and-desist letter to crypto lending firm BlockFi, ordering it to stop offering interest-bearing accounts.
The reason for the Wednesday upswing wasn’t immediately clear. Cryptocurrencies often undergo severe price fluctuations.
Meanwhile, the second-largest cryptocurrency by market capitalization, Ethereum, was up by 9.53%, to close at $1,970.20
Crude oil
Crude oil prices dropped on Wednesday, as against the previous session as improved risk appetite provided support with data showing an unexpected rise in U.S. oil inventories.

Crude oil prices dipped after the Energy Information Administration (EIA) reported a crude oil inventory build of 2.1 million barrels for the week to July 16.
Last week’s inventory build compared with a draw of 7.9 million barrels for the previous week and an estimated and shocking increase in crude inventories of 806,000 barrels, as reported by the American Petroleum Institute on Tuesday.
JPMorgan analysts said global demand is expected to average 99.6 million barrels per day in August, up by 5.4 million barrels per day from April.
Brent Crude dropped by 0.37% to close at $71.96 per barrel, WTI also dropped by 0.30% to close at $70.09, Natural Gas dropped by 1.41% to close at $3.903, while OPEC basket dropped by 2.84% to close at $73.15 per barrel.
However, the Bonny Light rose by 3.70% to close at $70.87 per barrel.
Oil prices have been particularly volatile this week, seeing one of the largest single-day oil price drops ever on Monday as growing fears about the Delta variant and OPEC+ production increases sour the overall industry outlook.
Meanwhile, the Organisation of Petroleum Exporting Countries (OPEC) has predicted a gradual recovery in demand for crude oil this year and next, as the group agree on a deal to revive the production still shuttered since the pandemic
External reserve
Nigeria’s foreign reserve rose by $14 million on Friday, 16th July 2021, to close at $33.118 billion as against the N33.104 billion that was recorded on Thursday, 15th July 2021.

Nigeria’s reserve had recorded a significant reduction in recent times, losing about $219.42 million month-to-date and about $2.27 billion from January to date.
The change in tide to a positive is an indication of increased forex earnings, which would come as a relief for Nigeria, as an increase in external reserve will help Nigeria meet up with pent-up financial obligations.
The increase will also serve as a relief for Nigeria’s exchange rate, which had been on a downturn lately, crossing the N500/$1 mark at the parallel market.

13/07/2021

Naira remains stable across forex market as dollar supply rose significantly by 135%

The exchange rate between the naira and the US dollar closed at N411.45/$1 at the Investors and Exporters window, where forex is traded officially.

Naira remained stable against the US dollar on Wednesday to close at N411.45/$1. This was the same rate that was recorded on Tuesday, 6th July 2021.

Also, the naira maintained stability at the parallel market, as it closed at N503 to a dollar. This was the same rate that was recorded in the previous trading session. However, Nigeria’s external reserve continues to plunge, as it heads to its lowest position in four years with a year-to-date decline of over $2 billion.

The local currency maintained stability across forex markets as dollar supply rose significantly by 135.4%.
Trading at the official NAFEX window
Naira remained stable against the US dollar at the Investors and Exporters window at Wednesday’s trading session to close at N411.45/$1, representing the same rate that was recorded at the previous trading day’s session.

The opening indicative rate closed at N411.79 to a dollar on Wednesday, July 7, 2021. This represents a 29 kobo drop when compared to the N411.50 to a dollar that it closed with on Tuesday, July 6, 2021.
An exchange rate of N420.86 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.45/$1, while it sold for as low as N396/$1 during intra-day trading.
Meanwhile, forex turnover at the Investors and Exporters (I&E) window rose significantly by 135.4% on Wednesday, 7th July 2021.
According to data tracked by Nairametrics from FMDQ, forex turnover increased from $110.67 million recorded on Tuesday, 6th July 2021 to $260.51 million on Wednesday, 7th July 2021.
Cryptocurrency watch
The world’s most popular and biggest cryptocurrency, Bitcoin, was down by 2.80% on Wednesday evening to close at $33,303.75, amid China’s crackdown.

Bitcoin price consolidation may be coming to an end as it may soon move out of its seven-week trading range of $30,000 to $40,000, with an indicator tracking the cyclical nature of price volatility suggesting that a big move is overdue.
An analyst had said that Bitcoin prices had crashed but predicted that CoinBase stock might still double.
Meanwhile, the Chief Executive Officer of BitGo, Mike Belshe, said that the recent China clampdown on cryptocurrency mining and trading was good for the long-term of Bitcoin.
The Securities and Exchange Commission faces an important decision about cryptocurrency, whether to approve a Bitcoin exchange-traded fund. Although it would be best to see such ETFs approved only after Congress has strengthened crypto regulation generally. The likelihood of that happening in the near future is low.
Ethereum, the second-largest cryptocurrency by capitalization, dropped by 3.38% to close at $2,247.08.
Oil prices
Crude oil prices dropped on Wednesday as the oil rally ground to a halt with Brent Crude closing at $72.19 per barrel, down by 0.33%. The oil price plunge continues amid OPEC+ deadlock.

Oil prices continued falling on Wednesday, following the sharp losses incurred the previous day after the market started to assess what the OPEC+ deadlock would mean for immediate oil supply, supply-demand balances, and the future of the alliance.
Saxo Bank, in a note on Wednesday, said that the risk of no-deal raising noncompliance, White House urging a compromise, a rapidly spreading virus variant, a very overbought market, and a stronger dollar all helped trigger the losses in the oil market.
The oil market continues to assess the repercussions of the ongoing OPEC+ impasse on supply at a time when summer demand is rising.
The American Petroleum Institute (API) on Wednesday reported a draw in crude oil inventories of 7.983-million barrels for the week ended July 2.
Meanwhile, 3 OPEC+ sources say Russia is leading efforts to close divisions between Saudi Arabia and the United Arab Emirates to help strike a deal to raise oil output in coming months, with OPEC and its allies yet to set a date for their next oil policy meeting.
WTI Crude dropped by 0.48% to close at $71.85, Natural gas lost 0.36% to close at $3,583, Bonny Light recorded a decline of 0.60% to close at $74.16 per barrel, while OPEC basket rose by 0.30% to close at $75.94.
External reserve
Nigeria’s external reserve declined by $26 million on Tuesday, 6th July 2021 to stand at $33.118 billion. This represents a 0.08% decrease compared to the $33.144 billion recorded on Monday.
Nigeria’s foreign reserve fell to its lowest position since October 2017, as its year-to-date decline surpassed $2 billion, while its monthly decline for June 2021 stood at $905.5 million. This is despite the recent bullish trend recorded in the global oil market.
The decline can be attributed to a drop in inflows by foreign investors and a decrease in forex earnings due to a cut in crude oil export as a result of OPEC production quota, as well as the widening international trade deficit. This invariably puts a lot of pressure on the local currency.
The pressure on the external reserve is still continuing as uncertainty in the oil market appears to persist, with OPEC still unable to reach an agreement on an increase in production quota.
The CBN, which operates a managed float foreign exchange system, also periodically supports the currency using the external reserves, and a lower reserve is expected to affect the currency.

08/07/2021

Why there is little reason to save in naira

The Nigerian naira is currently facing what is perhaps its most existential threat as purchasing power for Nigerians whittles down. Since the crash in oil prices last year and the ensuing Covid-19 induced lockdown, the exchange rate has suffered multiple devaluations, losing about 28% in value when compared to the dollar. The implication is that more and more savvy investors are dumping the naira in exchange for more stable currencies.

At the forefront of the issues facing the naira is the rising inflation which is gradually affecting the purchasing power of households and businesses. No doubt that people who keep a large portion of their assets in cash will suffer a loss of value as a result of inflation, which incidentally, is showing no signs of abating anytime soon.

Notwithstanding the gloomy outlook, there are investment alternatives that allow individuals and corporations to outperform inflation and increase wealth. That being said, here are a few things to think about before you start saving in naira
The rate at which the naira depreciates
Nigeria has a multi-currency regime which has made most businesses uncomfortable and prompted calls from the World Bank and IMF for rate unification, to attract investment. Nigeria maintains that it manages a float exchange rate but these claims have fallen on deaf ears.

Rising dollar demand has put pressure on the naira as foreign exchange providers, such as offshore investors, have exited the market, following the COVID-19 pandemic which caused a drop in global oil prices.

Despite a 128% increase in dollar supply, the naira has recently fallen at the official market. Meanwhile, the naira is trading at N503 at the parallel market, where it has remained relatively stable.
High inflation eroding purchasing power
Nigeria remains plagued with double-digit inflation of 17.93% as of May 2021. However, this inflation rate seems to be a subtle reflection of reality as most prices of essential commodities such as pure water have reportedly seen a 100% increase.

This high inflationary situation exacerbates the erosion of purchasing power. This poses a concern for speculative and foreign investors who would be expecting their investments to surpass the inflation rate to earn real profit. The fact that the inflation rate does not reflect the true circumstances of things in the broader economy coupled with the issues of unstable inflationary rates, has seen many investors turn their backs on the Nigerian economy and ultimately, the naira. Hence, saving in naira can be a futile effort, especially when high inflation acts as a major catalyst in reducing the real value of your wealth.High risk of investing locally
According to recent CBN reports, only Abuja and seven Nigerian states were able to attract foreign investments in the first quarter of 2021, implying that the remaining 29 states received no foreign investments. The overall value of capital inflows fell to 9.7 billion dollars in 2020, down from 24 billion dollars in 2019, a 59.7% decrease
This decline reflects foreign investors’ strong scepticism about investing in the country. These concerns typically revolve around situations such as banditry, farmers clashing, an increase in kidnapping and the murder of innocent citizens.

Also, Nigeria in the last 2 years has posed to be a country with high regulatory risk. Many startups such as Opay, Gokada, Luno and others have seen their businesses come to an end or face a decline as a result of regulatory uncertainty in the country. Some compare the regulatory uncertainty in Nigeria with that of the ever-volatile cryptocurrency market as the government makes decisions without consulting stakeholders. The recent Twitter ban is a prime example.

Another pressing issue is the disparity between the official I&E window and the parallel market exchange rates, which difference can be as much as N90. This disparity in rates has made investing in naira a riskier proposition, which is why investors are fleeing despite the bullish oil prices.
Cryptocurrency and dollar-based investments
Dollar-based investments like cryptocurrencies, Eurobonds and US stocks, are more appealing to investors than saving in a depreciating naira. Despite the recent downturn of the cryptocurrency market, investors have enjoyed outstanding profits due to economic recovery led by COVID-19 vaccinations. Investing in this class of asset has been seen to be more profitable than saving in naira.

Finally, the naira remains our legal tender and is not going anywhere soon. For those who continue to earn salaries or income in naira, the concern should be what to do to ensure the preservation of wealth. Our analysts suggest it is better to invest in assets that can generate returns above the current inflation rate. However, this might not be possible as the investment climate also appears convoluted. The approach, therefore, is to invest that money in assets that can at least deliver anything above your conventional savings deposit rates.

Better still, seek dollar-earning businesses or ventures which will help hedge against exchange rate challenges. We also suggest front-loading costs as early as you can to avoid even more erosion of purchasing power.

07/07/2021

FX Outflows Still Below Pre-Pandemic Levels

According to the CBN's latest Quarterly Statistical Bulletin for Q4 '20, total fx inflows into the Nigerian economy declined by -6.4% q/q (-42% y/y) to USD24.8bn. Although aggregate inflows have increased since they bottomed out to a 3-year low at the height of the pandemic, they have not recovered to pre-pandemic levels.



Fx inflows through the CBN increased 17.1% q/q to USD8.2bn (or 33% of total inflows), thanks to a 48% q/q rise in non-oil receipts to USD6.8bn. A USD2.0bn category titled "others including FGN loans" underpinned the increase in non-oil receipts. On a net basis, the CBN's swap arrangements grew 117% q/q to USD792m.



In contrast, oil receipts fell 43.7% q/q to USD1.3bn due to i) Nigeria's adherence to its OPEC oil production quota, which resulted in a decline of 0.1 million barrels per day and, ii) a decrease in NNPC's share of oil and gas exports.



Autonomous sources (other than the CBN) contributed c.USD16.6bn in forex inflows, or 67% of overall inflows. It was supported by a 10% increase in OTC purchases (invisible transactions), which included capital imports, home remittances, and other OTC purchases which we reckon are mostly linked to bonds.



Notably within invisible transactions, capital imports and home remittances shrunk by 25% and 52% respectively. The drop in capital imports can be attributed to FPIs' waning appetite after a worsening of fx liquidity, induced by a sell-off in oil prices as the pandemic worsened. Remittances also suffered a blow from the weak economic growth and employment levels in migrant-hosting countries, and the depreciation of the currencies of remittance-source countries against the US dollars amongst other factors.



Fx outflows through the economy increased by 24.1% q/q to USD9.2bn. About 94% of the net outflows were routed through the CBN. The strong increase in forex outflows reflects a rise in CBN fx interventions at multiple intervention windows, notably the restart of fx sales to bureaux de change operators and at the investors and exporters (I&E) window in August '20 after a five-month hiatus. Despite the increase in outflows during the quarter, fx outflows remain below pre-pandemic levels, due largely to the CBN's import compression strategies..



Our conversations with FPIs and domestic investors indicate that greater fx liberalisation (including further adjustments to the fx rate) and the loosening of fx controls such as the CBN's 42-item fx restriction list are prerequisites to open the tap of portfolio flows.

30/06/2021

CBN reassures Nigerians that the country’s financial system is safe, sound

The Central Bank of Nigeria (CBN) has reassured Nigerians that the financial system of the country is safe, sound and in line with the best possible financial practices.

The reassurance was made by the Governor of the CBN, Godwin Emefile, while speaking at a 2-day CBN Fair with the ‘theme: ‘Promoting Financial Stability and Economic Development’ held in Bauchi and Gombe simultaneously on Monday.

The CBN Governor added that the apex bank is ever ready to listen to the people of Nigeria in order to know how best to serve them with the aim of improving the financial base of their businesses, particularly the small and medium-sized businesses.

Represented by the Acting Director, Corporate Communications, Osita Nwanisobi, Godwin Emefile said that the CBN organized the fair in order to create Awareness on the policies of the CBN, build confidence in the financial system which is safe and sound to listen and hear from the general public on how best to serve.

He stressed that the CBN is committed to developing financial interest in order to grow the country’s economy through the various intervention programs which have been made easily accessible to the public.

Godwin Emefile then called on the participants at the fair to speak out in order to assist the CBN to know the areas of the intervention that need to be further improved upon for more effectiveness.

In his remarks, Secretary to Bauchi State Government (SSG), Barr Ibrahim Hashim, said that the government will continue to collaborate with the CBN in order to ensure that the people of the state key into the various interventions of the apex bank with the aim of improving life.

Represented by the Director, Research at the Government House, Dr Chiroma Ahmed, the SSG said that the priority of the government is to bring people out of poverty and provide employment and source of livelihoods to the teeming unemployed youths and women.

The SSG commended the CBN for making it possible for Nigerians to have easy access to loan facilities a development he said has changed the financial process and narrative of the country.

The CBN branch Controller in Bauchi, Idris Haladu assured that the CBN will continue to open its doors for Nigerians to come over to make enquiries on the interventions available to the public in order to make them accessible.

Idris Haladu who was represented by the Branch Head of Banking Services, Adamu Isa said that during the 2-day fair, CBN will listen to the beneficiaries of the various intervention programs to enable it to know what next steps to take to achieve the set objectives of the program.

Some of the benefitting associations including RIFAN, ALGON, Maize farmers and others through their representatives at the meeting commended CBN for the various interventions which have improved their businesse

24/06/2021

Focus on one positive impact of COVID-19 on the financial services sector

MTN Group Ltd said the COVID-19 pandemic has helped to accelerate the adoption of mobile financial services across Africa. The Johannesburg-based telco, which is the parent company of MTN Nigeria, recently launched its MOMO service which is focused mainly on reaching a lot of the unbanked populace in Nigeria and elsewhere.

A statement made available by the company, as seen by Nairametrics, noted that cashless transfers have been among the best methods for curtailing the spread of the virus. This explains why a lot of people in Africa now rely on it.

MTN Group’s executive director in charge of mobile money services, Serigne Dioum, was quoted to have said:

“As many countries adopted partial or total lockdowns, we witnessed an evolution in the type and volume of Mobile Money transactions. We saw a significant increase in MoMo Pay merchant and bill payments despite an initial decline in Mobile Money agent transactions due to the restrictions. However, we have already started to see a gradual increase as restrictions have been eased.
“These changes, triggered by COVID-19, have enabled the acceleration and scaling of cashless and digital economies. They support our ambition to transition to an end-to-end platform, creating a digital marketplace and connecting consumers to businesses, and businesses to businesses.

“We see this as a significant opportunity to change the outlook for affordable, inclusive, understandable and comprehensive financial services in Africa and the Middle East.”

Partly due to this development, Africa has witnessed the fastest growth rate for mobile money use in the world, the statement by MTN said.

It should be noted that before the advent of mobile financial services, many Nigerians (and Africans) were unbanked. No thanks to their lack of education, limited financial resources, and rural living environments, many people were inadvertently excluded from accessing financial services such as access to credit facilities. However, the story is different today due to the activities of fintechs and other mobile financial services providers such as MTN.

The MTN MOMO service was launched in Nigeria back in August 2019, with the hopes of replicating the same success Safaricom’s M-Pesa has recorded in Kenya.

22/06/2021

Central Bank of Nigeria forex policy timelines 2020-2021

Since the first quarter of 2020, Nigeria has faced an exchange rate crisis triggered by the drop in oil prices. It started after two of the world’s largest oil producers, Saudi Arabia and Russia, disagreed on how to proceed concerning oil supply cuts, which triggered a price war that pushed oil prices to crash to as low as under zero dollars.

In March 2020, the world fully became aware of the existential threat that was the Covid-19 pandemic, which has since affected millions of people globally and killed hundreds of thousands. These twin events have had a telling effect on Nigeria’s economy. As an economy highly dependent on crude, the oil price war meant Nigeria earned less from crude oil sales cascading to an even larger problem – Forex.

With oil prices down, pressure on Nigeria’s exchange rate grew, leading to speculations of a devaluation to reflect the true value of the naira. Thus began one of the most significant deluges of policy pronouncements and flip-flops on the management of Nigeria’s foreign currency.
In this tracker, Nairametrics collates a timeline of all the forex-related policy decisions and denials that have occurred since March 2020. This timeline is updated regularly as new information becomes available.

March 5, 2021

The Central Bank of Nigeria (CBN) has introduced a ‘Naira 4 Dollar Scheme’ for diaspora remittances, which offers recipients of diaspora remittances through CBN’s IMTOs to be paid N5 for every $1 received as remittance inflow.

The scheme takes effect from Monday, March 8, 2021, and ends on Saturday, May 8, 2021.

March 1, 2021

The exchange rate between the naira and the US Dollar depreciated to close at N410.25/$1 at the Investors and Exporters (NAFEX) window, where forex is traded officially. This is as the CBN Governor has suggested that the official exchange rate has been devalued.

Similarly, at the parallel market where forex is traded unofficially, the naira depreciated closing at N482/$1 on Friday, February 26. This represents 0.42% drop when compared to the N480/$1 that it closed on the previous trading day.

January 26, 2021

To streamline supply and ensure there is enough to meet rising demand, the CBN moved to ensure strict monetary control of the forex market threatening to expel exporters who refuse to remit foreign exchange proceeds in the NAFEX market. It also warned against paying diaspora remittances in naira.

The CBN may have also confirmed the forex pressures businesses are facing in its monetary policy communique of January 26, 2020 when it cited it as a reason for the weak purchasing managers index.

January 22, 2021

The Central Bank of Nigeria (CBN) in a new circular, read the riot act to the International Money Transfer Operators (IMTOs) as they have threatened to sanction some of them who still facilitate diaspora remittances in naira, contrary to its earlier directive that it must be in foreign currency.
December 02, 2020

Central Bank of Nigeria (CBN) issued an update to its recent circular on the management of remittances from diaspora Nigerians. In a circular posted on its website, the apex bank instructed banks to transfer all diaspora remittances to the domiciliary accounts of the beneficiaries or pay the customers in foreign currency.

On payment of foreign transfers, it also clarified that the choice of how the money should be paid, whether transfer or dollar cash withdrawal, was left to the beneficiary of the remittance.

The circular also instructed the IMTOs to ensure the foreign currency was deposited into their corresponding deposit money bank accounts. It also confirmed banks were to pay the dollars to the beneficiaries either via transfers to domiciliary accounts or in cash.

November 30, 2020

The Central Bank of Nigeria (CBN) announced the amendment of procedures for receipt of diaspora remittances in an apparent and frantic attempt to improve liquidity in the forex market and reduce the disparity between the black market and official I&E window.

The disclosure was made in a circular issued by the CBN on Monday, November 30, 2020, to all authorized dealers and the general public, and signed by its Director for Trade and Exchange Department, Dr O.S. Nnaji.

In the new amended procedure, CBN stated that beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) would thenceforth receive such inflows in foreign currency (US Dollars) through the designated bank of their choice.

November 18, 2020

Central Bank of Nigeria (CBN), in a new circular, clarified its position on the removal of third parties from buying of foreign exchange routed through Form M, letters of credit, and other forms of payment

While reiterating its earlier directive that destination payment for all forms M, letters of credit, and other forms of payment should be made directly to the ‘Ultimate Supplier of Products,’ it gave conditions that must be met by importers if they chose to use a buying company other than the primary manufacturer.

That was disclosed in a circular with Reference number TED/FEM/FPC/GEN/01/009, which was issued by the CBN to all authorized dealers and the general public on November 18, 2020, and signed by its Director for Trade and Exchange, Dr. O. S. Nnaji. The circular was a follow-up to one earlier issued by the apex bank on the same subject matter in August 2020.

November 17, 2020

The Federal Government announced plans to make foreign exchange available to petroleum product marketers, in order to make the importation of petrol into the country competitive, reduce the rising cost of the product, and stop the overdependence on the Nigerian National Petroleum Corporation (NNPC) for its importation.

The disclosure was made by the National President of Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Okonkwo, after the oil marketers had met with officials of the Federal Ministry of Finance on the need to make the foreign exchange available for petrol imports.

November 11, 2020

The naira remained stable against the dollar, closing at N465/$1 at the parallel market, as Bureau De Change operators got another round of dollar supply from the Central Bank of Nigeria.

November 03, 2020

The naira remained stable against the dollar, closing at N463/$1 at the parallel market on Tuesday, November 3, 2020, as BDCs got another round of dollar supply from CBN.

That was also as businesses that were shut down due to the outbreak of violence in Lagos and some parts of the country during the protests against the special anti-robbery unit (SARS) and police brutality by the Nigerian youths got back to full activity.

October 16, 2020

Banks limited foreign exchange transactions by both individuals and corporate organizations on the unofficial black market to curb speculation.

That was despite the continuation of the protest against the special anti-robbery unit (SARS) by the Nigerian youth which limited movement in major cities across the country, especially Lagos.

October 7, 2020

The CBN sold over $450 million to BDCs since the resumed forex sales on Monday, September 7, 2020. That was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.

However, the exchange rate against the dollar failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.

BDC operators urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.

September 25, 2020

The CBN sold over $200 million to BDCs since the resumed forex sales on Monday, September 7, 2020. It was expected to inject more liquidity to the retail end of the foreign exchange market, and discourage hoarding and speculation.

However, the exchange rate against the dollar failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.

BDC operators urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.

September 12, 2020

The World Bank expressed reservations about the Foreign Exchange measures rolled out by the Central Bank of Nigeria. The multilateral bank urged the CBN to intensify its efforts towards easing the pressure on the country’s FX market.

That was disclosed by the World Bank’s country director, Shubham Chaudhuri, via email to an inquiry by Bloomberg.

Chaudhuri said, “stronger action and a clear commitment from the CBN would go a long way towards facilitating a stronger recovery, despite its recent resumption of dollar sales to the BDCs after a 5-month suspension.”

September 11, 2020

The presidency explained why President Muhammadu Buhari had ordered the Central Bank of Nigeria (CBN) to stop making available, foreign exchange to importers of fertilizer and food items, despite criticisms from some FX analysts and stakeholders.

It revealed that the move by the president to suspend the allocation of foreign exchange for food and fertilizer imports was an action borne out of patriotism.

The disclosure was made by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, when he appeared as a guest, on Channels Television’s Sunrise Program, on Friday, September 11, 2020.

September 6, 2020

A memo circulating online indicated that the Central Bank had instructed banks to Post-No-Debit on the accounts of 38 companies.

A Post-No-Debit (PND) is basically an instruction to banks not to allow any withdrawal or transfer from the bank account of account owners, essentially blocking the account from outflows. It is usually drastic a measure taken to allow for investigation and possible reclaiming of any illegal inflow into an account.

The CBN did not state why the accounts were flagged, but sources informed Nairametrics that it was due to suspicion of forex infractions.

September 3, 2020

Nigeria’s central bank pumped in $50 million into the FX market on Monday in a bid to test demand and supply and more importantly, the price of naira against the dollar.

$50 million was sold to foreign investors on the spot and forward market in what it termed a “test trade to gauge the level of dollar demand” in the market.

August 28, 2020

The Central Bank of Nigeria (CBN) barred operators of Payment Service Banks (PSBs) from accepting foreign exchange deposits and to accept any closed scheme electronic value (airtime) as a form of deposit or payment.

This was disclosed by the apex bank in the reviewed guidelines for licensing and regulations of PSBs released on its website.

August 27, 2020

Nigeria’s Central Bank issued a circular authorizing and instructing dealers to sell forex to end users at N386/$1.

In a circular titled, “Weekly Exchange Rate for Disbursement of Proceeds of International Money Transfer Service Operations” the apex bank detailed the applicable exchange rate of proceeds of IMTOs for the period, August 31, 2020.

Get financial and economic data from Nairametrics on Nairalytics

August 26, 2020

The Central Bank of Nigeria (CBN) vowed to go tough on exporters who were guilty of forex non-repatriation. It was part of the CBN’s ongoing efforts to resolve the prevalent forex crisis in the country by increasing forex liquidity.

To that end, the CBN directed banks to submit the names, addresses, and Bank Verification Numbers (BVNs) of all the exporters who had failed to repatriate their export proceeds. Necessary ‘action’ would be taken against such defaulters, the CBN said in a statement.

The statement further noted that the Central Bank Governor, Godwin Emefiele, gave the directive on August 25, 2020, while virtually attending a Bankers’ Committee meeting.

READ: CBN says 22 banks to restructure over 35,000 loans due to COVID-19

August 24, 2020

Central Bank of Nigeria (CBN) issued a circular removing buying agents/companies or any third party from accessing its SMIS forex window through FORM M forex purchases.

In a circular dated August 24, 2020, the apex bank instructed that “Authorized Dealers are herby directed to desist from the opening of Form M whose payment is routed through a buying company/agent or any other third parties” effectively eliminating third parties or middlemen from transacting in forex deals in its official SMIS window.”

READ: What Nigeria may have bargained for with Emefiele’s reappointment

August 6th, 2020

Information on the website of the CBN revealed the apex bank had adjusted the official exchange rate to N380/$1 from N360.1/$1. The adjustment occurred on Thursday, August 6th, 2020.

It suggested the CBN might have unified the exchange rate in line with the promise made by the Governor of the Central Bank of Nigeria.

July 13, 2020

CBN restricted access for the importation of maize through the official CBN forex window.

It hinged its decision on the need ‘to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods and increase jobs which were lost as a result of the ongoing COVID-19 pandemic.’

July 3, 2020

CBN reportedly instructed bidders at its Secondary Market Intervention Sales (SMIS) to increase their bidding price to N380/$1 floor. The SMIS is the market where importers bid for forex using Letters of Credit and Forms M.

The apex bank allegedly informed banks that they would only accept bids from N380/$1 and above, and no longer N360/$1 meaning those who bid lower will not get any forex allocation.

Transaction success in this market is based on bids with those who bid higher than the floor as they are often in an advantageous position to secure forex.

June 23, 2020

The Governor of the Central Bank, Godwin Emefiele, confirmed that the CBN would continue to pursue unification around its Nafex rate. The NAFEX rate is the forex window where Investors and Exporters transact dollars on market-determined prices. The CBN Governor said this at an Investors Conference with the Federal Government of Nigeria by CitiBank.

May 21, 2020

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, warned businesses and individuals against patronizing the parallel market, popularly called the black market.

He warned them to stop using black markets for foreign currency exchange, following the liquidity crisis triggered by low oil prices and a shortage of dollars.

READ: Exchange rate depreciates at NAFEX window as forex liquidity drops further by 57%

May 19, 2020

The Central Bank of Nigeria (CBN), in its quest to stabilize Naira injected funds to the currency market through the Wholesale Secondary Market Interventions.

The auction was earlier put on hold by the CBN due to the COVID-19 pandemic and dwindling foreign exchange reserves standing at less than $34 billion.

READ: Zenith Bank’s Profit After Tax in H1,2020 rises by 16.8% to N103.8 billion

May 18, 2020

The Central Bank of Nigeria (CBN) tasked industrial conglomerates operating in the country to support efforts of the government to grow the nation’s economy and return it to its green days.

The CBN boss warned that the apex bank would not support the importation of items that could be produced in Nigeria. According to him, the bank could not spend its foreign exchange reserves on what would not boost the economy and generate jobs for Nigerians.

May 10, 2020

The Central Bank of Nigeria (CBN) assured foreign investors that repatriating their funds from the country was secured, despite forex related revenue shortages due to the drop from the sale of crude oil globally.

In the statement, CBN Governor, Godwin Emefiele explained that the apex bank had put in place policies to ensure an orderly exit for those that might be interested in doing so and also urged investors to be patient as such repatriations were processed, owing to the Bank’s policy of orderly exit of investments.

April 29, 2020

The Central Bank of Nigeria (CBN) resumed sales of dollars to SMEs that needed foreign exchange for essential imports, as well as Nigerian students in foreign schools who needed to pay their school fees.

According to a brief statement that was signed by the CBN’s Director of Corporate Communications, Isaac Okoroafor, the apex bank provided over $100 million per week for the two categories of dollar consumers mentioned above.

READ: Covid-19: Timeline of every pronouncement made by Nigeria to support the economy

April 27, 2020

CBN adjusted the exchange rate for import duty payment from N326/$ to N361/$.

With that development, the Nigeria Customs Service (NCS) was directed to effect an increase in duty payable on cargoes imported through the ports.

March 27, 2020

Central Bank of Nigeria (CBN), in a note issued to Bureau De Change operators (BDCs) in the country, suspended the sales of foreign currency for two weeks.

However, it did not affect dollar transactions in the Investors & Exporters (I&E) window. Thus, portfolio investors, as well as businesses that still required FX for foreign transactions settlement, could access the I&E window.

March 24, 2020

The CBN announced it was collaborating with the Nigerian Financial Intelligence Unit (NFIU) to uncover speculation and would charge such dealers for economic sabotage. The bank added that market fundamentals did not support devaluation.

March 22, 2020

The Central Bank of Nigeria (CBN) halted the sale of dollars to the Nigerian National Petroleum Commission (NNPC) by oil companies, including International Oil Companies (IOCs) that operated within the shores of the country.

The apex bank explained that the move to stop the sale of dollars was in line with its commitment to improving foreign exchange supply to the economy as the impact of the novel Coronavirus (COVID-19) pandemic bit harder on the economy.

READ: Nigeria, only oil producing nation that does not benefit from price increase – Sanusi

March 20, 2020

Central Bank of Nigeria devalued its official exchange rate from N307/$1 to N360/$1. The apex bank reflected this change on its website, signaling a confirmation.

March 10, 2020

The Central Bank of Nigeria (CBN) fined Bureau De Change (BDC) operators over various infractions in the foreign exchange market.

Over 100 BDC operators were fined N5 million each for various infractions in the foreign exchange market.

READ: Report accuses World Bank of ‘toying’ with Nigeria over $1.5 billion loan

March 12, 2020

The Central Bank of Nigeria (CBN) debunked speculations making the rounds that suggested that the naira was finally about to be devalued.

According to a statement, the apex bank blamed “unscrupulous players in the foreign exchange market” for spreading the rumour.

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