International Trade Finance

International Trade Finance Its all about International trade finance This invariably means that any changes to the demand for these products will directly impact on the economy.

Nigeria’s dependence on mono-economy, oil and gas, contributes over 90% of foreign earnings and over 80% of government revenue. A negative change that portends danger is real and looming as alternative energy sources are being explored. The competition against Nigeria’s oil and gas has become stiffer in the recent past with the exploration of the mineral resources in countries that used to depend

on crude oil import from Nigeria. Our output in agricultural product is not self-sufficient. This has been the genesis of our problem. Short of Forex in circulation. Get more from our Page " International Trade Finance

22/07/2020

July 22, 2020

Dollar loses support amid doubts about U.S. stimulus

The dollar nursed losses against most currencies on Wednesday, undermined by concern that Republicans and Democrats are struggling to reach consensus on the next round of U.S. economic stimulus measures. The euro traded near its strongest level in more than a year after European leaders agreed a stimulus plan to fuel recovery from the economic damage caused by the COVID-19 pandemic. Appetite for riskier assets has improved greatly this week as progress in developing vaccines for the novel coronavirus reduced the U.S. dollar’s safe-harbour appeal. Against the British pound, the dollar traded at $1.2719, close to a six-week low. The dollar fell to 0.9315 Swiss franc to reach the lowest since March.

Oil prices slip as U.S. inventories, virus fears grow

Oil prices fell on Wednesday as industry data showed a bigger-than-expected inventory build in the United States, where climbing coronavirus cases may further dent fuel demand in the world’s biggest oil consumer. In his first press briefing in months on the pandemic, U.S. President Donald Trump said the outbreak would probably get worse before it gets better, one of his first recent acknowledgements of the spread of the problem. Industry group American Petroleum Institute (API) reported U.S. crude inventories rose last week by 7.5 million barrels, against expectations for a draw of 2.1 million barrels. Brent crude fell 35 cents, or 0.8%, to $43.97 a barrel by 0541 GMT, and U.S. West Texas Intermediate (WTI) crude dropped 39 cents, or 0.9%, to $41.53.

FGN bond primary auction to hold today

There is a primary market FGN Bond Auction – N25bn, N35bn, N35bn and N35bn of the Jan 2026, Mar 2035, Jul 2045 (new issue) and Mar 2050 FGN Bonds respectively on offer. The money market has been liquid this week with overnight rates currently around 3% and we expect strong demand at this FGN Bond auction from local investors..

10/07/2020

July 10, 2020

Yen gains, risk currencies slide as coronavirus worries deepen

The yen rose to a two-week high and risk-sensitive currencies slid on Friday after a surge in new coronavirus infections in the United States further undermined the case for a quick turnaround in the economy. More than 60,000 new COVID-19 cases were reported across the United States, the largest single-day tally by any country in the pandemic so far, discouraging some American consumers from returning to public spaces. Some Asian cities that had appeared to have contained the disease, such as Tokyo, Hong Kong and Melbourne, have seen an alarming spike in cases, dampening the mood further. The caution helped to drive the safe-haven yen by 0.25% to a two-week high of 106.93 per dollar.

Oil declines as U.S. virus cases hit record, heading for weekly fall

Oil prices fell on Friday, adding to steep losses from the previous session, and were headed for weekly declines on worries that renewed lockdowns following a surge in coronavirus cases in the United States and elsewhere could suppress fuel demand. Brent crude was down by 73 cents, or 1.7%, at $41.62 a barrel by 0712 GMT after falling more than 2% on Thursday. U.S. oil fell 83 cents, or 2.1%, at $38.79 a barrel after a drop of 3% in the previous session. Brent looks set for a weekly decline of nearly 3% and U.S. crude for a fall of around 4.5%.

29/05/2020

May 29, 2020
Yen perks up, dollar sags as markets jittery before Trump speaks on China

The Yen rose against major currencies on Friday as caution ahead of President Trump’s press conference on China’s treatment of Hong Kong triggered safe-haven inflows. The Dollar drifted lower against the Euro, but could quickly reverse course amid growing concern about tense relations between the world’s two biggest economies. The focus shifts to Trump’s response to China’s passage of a national security law for Hong Kong, which could ignite a diplomatic row between Washington and Beijing. The Yen rose 0.5% to 107.09 against the Dollar. The Dollar fell to $1.1102 per Euro on Friday, close to its lowest since March 30. The common currency was headed for its second weekly gain against the greenback as the EU’s announcement of a 750-billion-euro coronavirus recovery fund fueled optimism about the euro-zone economy.
Oil falls but set to post biggest monthly rise in years on output cuts

Oil prices edged lower on Friday, set to post their first weekly fall in five weeks, after U.S. inventory data showed lacklustre fuel demand in the world’s largest oil consumer, while worsening U.S.-China tensions weighed on global financial markets. Brent crude slipped 43 cents, or 1.2%, to $34.86 a barrel by 0643 GMT and U.S. WTI crude was at $33.14, down 57 cents, or 1.7%. WTI is on track to rise 76% for May, its biggest monthly gain ever, while Brent has gained 38%, the strongest monthly rise since March 1999. Thursday’s data from the Energy Information Administration showed that U.S. crude inventories rose sharply last week. Attention will now shift to the outcome of talks on output cuts between the OPEC and allies including Russia in the second week of June. Saudi Arabia and some OPEC members are considering extending record production cuts of 9.7 million bpd beyond June, but have yet to win support from Russia.
Nigeria’s MPC reduce Policy Rate to 12.50 percent

Citing the need for a policy response to tackle the Covid-19 pandemic and spur economic activities, Nigeria’s Monetary Policy Committee (MPC) reduced its policy rate (the MPR) by 100 basis points to 12.50 percent from 13.50 percent at the end of its meeting yesterday - the third this year. The MPC retained the other key policy parameters: CRR was held at 27.5 percent, Liquidity Ratio left unchanged at 30 percent, and the asymmetric corridor of -500/+200 basis points around the MPR was retained.

26/02/2020

February 26, 2020

Dollar nurses losses as epidemic fuels talk of Fed rate cut

The dollar nursed losses on Wednesday as rising expectations of a U.S. rate cut and warnings from U.S. health officials about the spread of the coronavirus called into question the perceived strength of U.S. financial assets. The dollar’s index against a basket of six major currencies stood at 99.081, little changed on the day but down 0.9% from a near three-year high of 99.915 hit last week. Against the yen, the U.S. currency traded at 110.37 yen, gaining 0.1% in Asia on Japanese buying before month-end but still almost two full yen below its 10-month high touched last Thursday. The euro fetched $1.08815, extending its rebound since it hit near three-year low of $1.0778 on Thursday.

Oil rises on short-covering, hopes for deeper output cut by OPEC+

Crude prices inched higher on Wednesday as investors covered short positions after three sessions of losses and eyed potential supply cuts, even as fears of a coronavirus pandemic deepened. Brent crude rose 33 cents, or 0.6%, to $55.28 a barrel by 0513 GMT, while U.S. West Texas Intermediate crude gained 41 cents, or 0.8%, to $50.31 a barrel. Still, prices are down nearly 7% since last Thursday’s close. Fears of a pandemic escalated as authorities around the world battled to prevent the spread of coronavirus, which has now been found in about 30 countries. OPEC and its allies including Russia, a grouping known as OPEC+, are due to meet in Vienna over March 5-6.

Nigerian banks: Primary lending rate declined 0.3ppts to 15.0% in Q4 2019

Based on the Central Bank of Nigeria quarterly economic report for Q4 2019, Prime Lending Rate and the Maximum Lending Rate declined 0.3ppts and 1.2ppts respectively to 15.0% and 30.0% respectively in Q4 2019. In addition, Average term deposit rate declined 0.3ppts to 8.1% in Q4 2019. There was a steep decline in Interbank lending rate which declined 5.4ppts to 3.4% in Q4 2019. The CBN made several policy changes in 2019, including an increase in the minimum LDR level to 60% (which was later increased to 65%) as well as banning local investors from participating in its Open Market Operation (OMO).

24/02/2020

February 24, 2020

Investors seek dollars as global virus spread widens

Asian currencies slid on Monday as the rapid spread of the coronavirus outside China drove fears of a pandemic and sent investors to the safety of gold, dollars and the Swiss franc. Italy, South Korea and Iran posted sharp rises in infections over the weekend. South Korea now has more than 760 cases, Italy more than 150 and Iran 43 cases. The World Health Organization is now worried about the growing number of cases that have no clear link to the epicenter of the outbreak in China. The Chinese, Australian and New Zealand currencies were on the back foot and emerging market currencies were pounded.

Nigeria’s GDP grew by 2.55% in real terms in Q4 2019 and 2.27% in full year 2019

Nigeria's Gross Domestic Product (GDP) grew by 2.55% (year-on-year) in real terms in the fourth quarter of 2019. Compared to Q4n 2018, which recorded a growth rate of 2.38%, this represents an increase of 0.17% points and an increase of 0.27% points when compared with the third quarter of 2019. The strong fourth quarter 2019 growth rate also represented the highest quarterly growth performance since the 2016 recession. Overall, this resulted in annual 2019 real growth rate of 2.27%, compared to 1.91% in 2018. Quarter on quarter, real GDP growth was 5.59%.

09/01/2020

January 09, 2020

Safe-haven currencies give back gains as U.S.-Iran situation eases

Safe-haven currencies such as the Japanese yen retreated on Thursday as the United States and Iran backed away from further conflict, with markets resuming a more risk-taking approach on hopes of a U.S.-China trade deal. U.S. President Donald Trump responded to an Iranian attack on U.S. forces with sanctions, not violence. Iran offered no immediate signal it would retaliate further to a Jan. 3 U.S. drone strike that killed its senior military commander. The yen, seen as a safe haven in times of geopolitical turmoil because of its deep liquidity and Japan's current account surplus, reversed the gains it made after Iran's missile strike. It was last down 0.3% at 109.49, a two-week low.

Oil steadies around levels prevailing before U.S.-Iran attacks

Oil prices steadied on Thursday after the previous session’s sharp losses on the back of swelling U.S. crude stocks and easing fears of an escalation in conflict between the United States and Iran. Prices were hovering around where they stood before the Jan. 3 U.S. drone strike that killed a top Iranian general and prompted an Iranian rocket attack on Iraqi airbases hosting U.S. forces, sending crude to its highest in four months. Brent crude futures moved up and down in early European trading after a 4.1% fall on Wednesday. By 1021 GMT, Brent was down 1 cent at $65.43 a barrel. West Texas Intermediate was up 2 cents at $59.63 after sliding nearly 5% the previous day.

07/01/2020

January 07, 2020

Dollar recovers vs. yen, U.S.-Iran tensions still in focus

The dollar rallied against the safe-haven Japanese yen on Monday, but stayed weaker versus the Swiss franc, as market sentiment remained cautious amid concerns about a broader escalation of Mideast conflicts after the United States killed Iran’s most prominent military commander. The yen and Swiss franc gained earlier in the session, extending a flight to safety that began on Friday after Iranian Major-General Qassem Soleimani was killed in a U.S. drone strike on his convoy at Baghdad airport. That rally, however, has lost some steam.

Oil prices fall as investors rethink Mideast disruption risk

Oil prices on Tuesday surrendered some gains made over the previous two days as investors reconsidered the likelihood of Middle East supply disruptions in the wake of the United States killing a top Iranian military commander. Brent crude fell as much as 1.5% to $67.86 a barrel and was at $68.39, down 52 cents, at 0737 GMT. U.S. West Texas Intermediate (WTI) crude futures were at $62.85, down 42 cents, after earlier dropping 1.5% to an intra-day low of $62.30. Prices surged during the previous two sessions, with Brent reaching its highest since September while WTI rose to the most since April. The gains followed fears of escalating conflict and potential Middle East supply disruptions after the Jan. 3 drone strike in Baghdad.

06/01/2020

January 06, 2020

Safe-haven currencies in demand amid US, Iran tension

The yen and other safe-haven currencies were in demand on Monday, along with assets such as gold, as investors fretted that the killing of Iran’s most prominent military commander by the United States could trigger a broader Middle East conflict. The moves extended a flight to safety that began on Friday after Iranian Major-General Qassem Soleimani was killed in a U.S. drone strike on his convoy at Baghdad airport. On Sunday, Iran further distanced itself from the 2015 nuclear agreement with world powers, which the United States withdrew from in 2018, saying it would continue to cooperate with the U.N. nuclear watchdog but would respect no limits to its uranium enrichment work. The Japanese yen surged on Monday to a three-month high of 107.77 versus the U.S. dollar in Asian trading and was last up 0.2% on the day at 108.

Oil hits $70 a barrel as Iran, Trump trade threats

Oil prices rose a further 2% on Monday, pushing Brent above $70 a barrel, as rhetoric from the United States, Iran and Iraq fanned tensions in the Middle East after a U.S. air strike which killed a top Iranian military commander. Brent crude futures soared to a high of $70.74 a barrel and was at $69.74 at 0940 GMT, up $1.14, or 1.66%, from Friday’s settlement. U.S. West Texas Intermediate crude was at $63.92 a barrel, up 87 cents, or 1.38%, after touching $64.72, the highest since April 2019.

27/12/2019

December 27, 2019

Dollar up vs yen as mild 'risk on' sentiment supports

The dollar rose to a near two-week high against the Japanese yen on Thursday as optimism around easing trade tensions between the United States and China sapped demand for safe-haven currencies, even as the holiday-thinned trading limited large moves in the FX market. Beijing said on Wednesday it is in close touch with Washington on a trade deal signing ceremony, a day after U.S. President Donald Trump said he and Chinese President Xi Jinping will have a ceremony to sign the recently struck agreement. Against the Japanese yen, which tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation, the dollar rose 0.26% to 109.63.

Oil hits three-month highs as strong U.S. consumer spending underpins growth hopes

Oil prices rose on Friday, hitting three-month highs after data showed record online spending by U.S. consumers, stoking faith in the world’s no. 1 economy even before the hoped-for end to the trade war between Washington and Beijing. Brent crude futures were up 6 cents, or 0.1%, at $67.98 a barrel at 0612 GMT, after rising to as high as $68.10, the highest since September. The West Texas Intermediate CLc1 contract was up 11 cents, or 0.2%, at $61.79 a barrel.

CBN Debits banks NGN650billion as levy for failure to meet the new Loan-to-Deposit Ratio requirement

The Central bank of Nigeria, CBN, yesterday, deducted N650billion from the account of some banks Cash Reserve Ratio, CRR, the levy for failure to meet the 65 per cent Loan to Deposit Ratio, LDR. This resulted in a scarcity of funds which caused interbank lending rates to shot up by 313 percentage points. Data from FMDQ showed that interest rate on overnight lending rose by 971 basis points (bpts) to 12.64 per cent on Tuesday from 2.93 per cent on Monday. Following the expiration of the September 30, deadline for banks to comply with 60 per cent LDR introduced in July, the CBN raised the LDR requirement to 65 per cent, giving banks up till December 31, to comply with the directive..

22/11/2019

November 22, 2019

Dollar firms as U.S.-China trade remains in focus

The dollar shook off early weakness to creep higher against other major currencies on Thursday, with investors focused on the latest developments in a bitter 16-month long trade dispute between the United States and China that has weighed on the world economy. Risk sentiment seesawed on Thursday amid mixed signals on whether Washington and Beijing can work out at least a partial deal to end trade-related tensions between the world’s two largest economies. The dollar index, which compares the dollar against six major currencies, was up 0.07% at 97.999

Nigeria’s Q3 Gross Domestic Product (GDP) grew by 2.28%(year -on-year), in real terms

Nigeria’s Gross Domestic Product (GDP) grew by 2.28%(year -on-year), in real terms, in the third quarter of 2019. Compared to the third quarter of 2018 which recorded a growth of 1.81%, the real GDP growth rate observed in the third quarter of 2019 indicates an increase of 0.47% points. Relative to the second quarter of 2019, which recorded a growth rate of 2.12%, Q3 2019 represents an increase of 0.17% points. On a quarter on quarter basis, however, real GDP grew by 9.23%. The growth rate in Q3 2019 represents the second highest quarterly rate recorded since 2016.

21/11/2019

November 21, 2019

Yen gains, yuan down as trade woes, Hong Kong strife sap risk appetite

The yen rose against the dollar on Thursday after sources close to the White House told Reuters that a U.S.-China trade deal is unlikely this year, shattering investor hopes a partial agreement was imminent and spurring demand for safe havens. The yuan fell to a three-week low in onshore trade on worries the failure to reach a deal to roll back U.S. tariffs could further harm China’s stuttering economy. Political tensions between Beijing and Washington were also keeping investors on edge after a source told Reuters that U.S. President Donald Trump is expected to sign into law two bills intended to support anti-government protesters in Hong Kong. The yen rose 0.15% to 108.46 per dollar on Thursday.

DMO raises NGN157.92billion as strong demand was recorded at yesterday’s bond auction

As expected, the bid at yesterday's primary market bond auction was very strong with most of the demand recorded on the 30-year (2049 bonds). It was oversubscribed by over 100%. Out of the NGN43.05bn demand, NGN19.86bn of the 12.75% FGN APR 2023 (Re-opening 5-year Bond) was sold; Out of the NGN94.21bn demand, NGN61.70bn of the 14.55% FGN APR 2029 (Re-opening 10-Year Bond) was sold; Out of the NGN115.09bn demand, only NGN76.36bn of the 14.80% FGN APR 2049 (Re-opening 30-Year Bond). Successful bids for the 12.75% FGN APR 2023, 14.55% FGN APR 2029, and 14.80% FGN APR 2049 were allotted at the Marginal Rates of 12.0000%, 12.3900% and 13.39000% respectively

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