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Naira Plunges to N1,740 in Parallel Market Amidst Growing Pressure
The Nigerian Naira is facing renewed pressure, with the parallel market rate hitting N1,740/$1 at the end of last week.
The Nigerian Naira is facing renewed pressure, with the parallel market rate hitting N1,740/$1 at the end of last week.
Naira Plunges to N1,740 in Parallel Market Amidst Growing Pressure
This marks a significant reversal of recent gains and signals a deepening depreciation trend.
Despite this, the Naira remains relatively stable in the NAFEM market, with minor appreciation. Market participants anticipate that the Central Bank of Nigeria (CBN) will intervene soon to stabilize the exchange rate and mitigate the pressure on the Naira.
The Nigerian Naira has experienced a roller coaster ride in 2024, with a period of significant appreciation followed by a sustained depreciation.
Key Highlights:
NAFEM: The indicative exchange rate for the Naira at the NAFEM window closed at N1,600 per dollar on Thursday, representing a N1.2 appreciation from the previous day.
Predictions: Dealers anticipate the exchange rate to close around N1,750 per dollar by the end of the year, with N1,800 per dollar being the projected rate for the end of 2024.
Year-on-Year Depreciation: The Naira has depreciated by 70.5% in the parallel market year-on-year, closing at N1,705 per dollar in September 2024.
Year-to-Date Depreciation: The Naira has depreciated by 16.7% year-to-date, closing at N1,490 per dollar in January 2024.
NAFEM Depreciation: The Naira has experienced a 104% year-on-year depreciation in the official NAFEM segment, closing at N1,540.78 per dollar in September 2024. However, the year-to-date depreciation is 9.9%, closing at N1,600 per dollar last weekend.
Analysts attribute the sustained depreciation to supply shortages.
Monetary and Fiscal Policies Out of Sync
The Central Bank of Nigeria (CBN) and the Federal Government seem to have differing views on the current economic situation.
The Monetary Policy Committee (MPC), led by CBN Governor Yemi Cardoso, recently observed a link between FAAC disbursements and foreign exchange market pressures. The MPC plans to closely monitor future FAAC allocations to assess their impact on the FX market.
Cardoso stated: “Furthermore, members observed a strong correlation between FAAC releases and liquidity levels in the banking system as well as its impacts on the exchange rates.”
“The committee therefore agreed to increase monitoring of future releases to address its effects on price development.”
Nigeria’s foreign exchange market is facing a supply issue, not a demand issue, according to Finance Minister Wale Edun. He stated that the country can address the problem by significantly increasing its oil production output. This contradicts the perception that fiscal policies are negatively impacting the exchange rate.
He stated: “The key about the foreign exchange market really is supply and as you know we are an oil-producing country, we just need to get our oil production up and that will deal with that issue of foreign exchange supply and pressure on foreign exchange anytime there are large flows.”
The Nigerian Naira’s recent depreciation is driven by inadequate supply rather than demand pressures. This has pushed the exchange rate close to the Central Bank of Nigeria’s (CBN) “fear index“, prompting calls for the apex bank to intervene.
Dealers believe the CBN will likely respond by increasing FX supply intervention, potentially preventing further depreciation and pulling the exchange rate back from the fear zone. This intervention is expected to be accompanied by a test-run of the CBN’s new Automated FX Trading model in December, replacing the current over-the-counter trading system to enhance transparency and control.
According to the apex bank, the new system would “facilitate a market-driven exchange rate accessible to the public”.
In a circular released on October 02, 2024 which provided the guidelines for the new system, the CBN stated: “This development is expected to reduce speculative activities, eliminate market distortions and give the CBN improved oversight.”
The Nigerian Naira is facing a turbulent year. After a period of appreciation in March 2024, the currency is now experiencing a sharp depreciation. This decline could potentially make the Naira the worst-performing currency globally in 2024.
The Central Bank of Nigeria (CBN) is conducting a two-week test run in November to address the situation. The exact dates of the test run have not been disclosed.
The World Bank has recently ranked the Naira among the worst-performing currencies in sub-Saharan Africa. This follows the Federal Government’s earlier celebration of the Naira’s strong performance in March 2024.
Parallel Market Dynamics: A Dealer’s Perspective
Dealers in the foreign exchange market have shed light on the factors driving the parallel market’s activity. They highlight a significant disconnect between supply and demand in the official market, leading to a reliance on the black market by large buyers who cannot secure their needs through official channels.
The dealers also note that even within the official market, supply can be erratic and difficult to obtain. This scarcity, often attributed to connections within the official market, fuels the demand for US Dollars, pushing the exchange rate upwards.
Mr. Liasu Moshood, a black market trader said: “The depreciation of Naira in the market is due to the rush for dollars by importers who don’t have access to the official foreign exchange market. “There is less dollar supply everywhere and not all of us come to the market now because you can hardly get dollars you want to trade.
“These importers are sourcing large amounts of dollars from our market because those Bureau De Changes cannot meet their demands. Even the banks.
On his part, Mr. Idris Daud, a trader projected the dollar to close the month at N1,750 per dollar and end the year at N1,800 threshold.
“Today, the dollar is sold between N1,730 and N1,740, especially by top foreign exchange black market dealers.
“The demand pressure now is high as more organizations are trying to import goods for the festive season in December and at the same time some are trying to restock before year-end as they are not certain what the foreign exchange rate might be before the end of the year. This is another reason for the pressure.
“There is also less inflows of foreign exchange getting to our end and we end up with little supply.
“I foresee the naira closing this month at N1,750 against the dollar and in the next three months at N1,800 per dollar on the back of continued pressure on demand and supply factor.”
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Public Announcement for 87RRI Nigerian Army Recruitment
Announcement: Nigerian Army Recruitment
Announcement: Nigerian Army Recruitment
Public Announcement for 87RRI Nigerian Army Recruitment
Online application for 87 Regular Recruits Intake for Non-Tradesmen & Women is now open.
– Application period: 3rd May – 7th June 2024.
– Application is free at the official website: recruitment.army.mil.ng.
– State Recruitment Screening Exercise for shortlisted candidates: 20th June – 3rd July 2024.
– Recruitment into the Nigerian Army is free. Beware of fraudsters.
Beware of fraudstars; Below is the main website for registration
The post was shared using their X handle. Check out the post below:
PUBLIC ANNOUNCEMENT FOR 87RRI NIGERIAN ARMY RECRUITMENT
This is to inform the general public & all interested applicants that online application for 87 Regular Recruits Intake for Non-Tradesmen & Women has commenced. Application starts from 3rd May – 7th June 2024. Application… pic.twitter.com/eT9Mmgty1x
— Nigerian Army (@HQNigerianArmy) May 3, 2024
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CBN Appoints 11 Agents for Oil and Gas Exports
The Central bank of Nigeria (CBN) has appointed 11 pre-shipment monitoring and evaluation agents for oil and gas exports in Nigeria.
The Central bank of Nigeria (CBN) has appointed 11 pre-shipment monitoring and evaluation agents for oil and gas exports in Nigeria.
CBN Appoints 11 Agents for Oil and Gas Exports
This designation was announced in circular TED/FEM/PUB/FPC/OO1/014 dated May 13, 2024, by Dr. Hassan Mahmud, the Director of the Trade and Exchange Department at the CBN.
The circular declares immediate effectiveness of the appointment. According to the circular disclosed to journalists on Tuesday, the appointments consist of 9 pre-shipment inspection agents and 2 monitoring and evaluation agents. Here are the details provided in the circular:
Pre-Shipment Inspection Agents:
- Neroli Technologies Limited: Qua Iboe, Forcados, and Bonny
- Holborn Oil and Gas Inter Ltd: Usman, Egina, and Yoho
- Swede Control Intertek Ltd: Ima (Otakikpo), Erha, and Ajapa
- Fel Tov Energy & Investment Ltd: Tulja, Antan and Odudu
- JBIS Inter; Resources Ltd: Agbami, Bonga, Okoro and Akpo
- Patibon Services Ltd: Ebok, Oyo, Pennington, E.A, and Okwori
- Offshores Bulk Inspection Co Ltd: Escravos, Brass and Anyyala-Madu
- Candid Oil Services Ltd: Okono, Ugo-Cha, Abo and Aje
- Dakee Engineering and Construction Limited: LNG, Escravos and Bonny River Terminal (BRT)
Monitoring and Evaluation Agents:
- Arlington Securities Nigeria Limited: JBIS, Offshore Bulk Inspection Co. Ltd, Neroli Holborn Oil Gas, Dakee Engineering & Construction Ltd (Gas), and DV Howells Nigeria Limited
- DV Howells Nigeria Limited: Feltov Energy, Swede Control, Patibon Services, and Candid Oil Services Ltd
The Central Bank of Nigeria (CBN) has notified authorized dealers, including the Nigerian Customs Services, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), all terminal operators, and all oil and gas companies about this directive.
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Today’s Exchange Rate: Black Market Dollar (USD) to Naira (NGN) on 6th June 2024
Black Market (Aboki Dollar Rate): Players buy at N1490 and sell at N1500
CBN Exchange Rate Today:
Dollar to Naira Exchange Rate at Black Market (Aboki fx) on June 5th:
Buying Rate: N1490
Selling Rate: N1500
Dollar to Naira Exchange Rate Today:
Black Market (Aboki Dollar Rate): Players buy at N1490 and sell at N1500
CBN Exchange Rate Today:
Buying Rate: N1473
Selling Rate: N1474
Recent Development:
Today’s Exchange Rate: Black Market Dollar (USD) to Naira (NGN) on 6th June 2024
OPay and Kuda Microfinance Bank resume new customer onboarding following CBN‘s clearance after a temporary halt due to illicit foreign exchange transactions crackdown.
News
Tinubu Appoints Ayodeji Gbeleyi as New Director-General, Replacing Mamman Ahmad at BPP
President Bola Tinubu has instructed Mr. Mamman Ahmadu to resign from his position as the Director-General/Chief Executive Officer of the Bureau of Public Procurement, BPP.
President Bola Tinubu has instructed Mr. Mamman Ahmadu to resign from his position as the Director-General/Chief Executive Officer of the Bureau of Public Procurement, BPP.
Tinubu Appoints Ayodeji Gbeleyi as New Director-General, Replacing Mamman Ahmad at BPP
This directive was announced in a statement released by the presidential spokesman, Chief Ajuri Ngelale on Saturday.
According to the statement, “This is part of a larger reorganization effort in the public procurement system to reposition the agency for greater efficiency and transparency.
“The Director-General is to hand over to the most senior officer in the Bureau, pending the appointment of a new Director-General.”
The President expressed gratitude to Ahmadu for his service and extended best wishes for his future endeavors.
President Bola Ahmed Tinubu has appointed Mr. Ayodeji Ariyo Gbeleyi as the new Director-General (DG) of the BPE.
Mr. Gbeleyi is a well-known financial expert and an award-winning chartered accountant, holding fellowship titles from both ICAN and CITN.
He has participated in executive programs at London Business School, Harvard Kennedy School of Government, and Lagos Business School.
According to a statement by Chief Ajuri Ngelale, the presidential spokesman, Mr. Gbeleyi brings over 30 years of post-qualification experience in various sectors like manufacturing, FMCG, banking, project finance, telecommunications, infrastructure, and public administration.
Previously, he served as the Chairman of the FMBN and as the Commissioner of Finance in Lagos State from 2013 to 2015.
The statement further said that, “The President expects the new Director-General to bring his vast experience and competence to bear in this role to strengthen the agency as the national resource centre for capacity building and sustenance of reforms through the promotion of a competitive private sector-driven economy, ensuring social accountability and efficient deployment of public resources, as well as advancing effective corporate governance and fiduciary discipline in the public and private sectors.”
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