Tag: Naira

  • CBN Vows To Stabilize Naira, Improve Forex Market

    CBN Vows To Stabilize Naira, Improve Forex Market

    The acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, says the apex bank will, in the next few days, be taking steps to improve the liquidity in the foreign exchange market.

    Speaking on Monday, Shonubi disclosed that he had met with President Bola Tinubu, who voiced his concern regarding developments in the market and its impact on Nigerians.

    The acting CBN governor shared his belief that the changes in the market are driven mostly by speculative demand and was confident that the steps that will be implemented soon will significantly impact the market.

    Shonubi said;

    “Mr. President is very concerned about some of the goings on in the foreign exchange market.

    “One of the things we discussed is what could be done to stabilise and what could be done to improve the liquidity in the market and also the goings on in the various other markets, including the parallel market.

    “He’s concerned about its impact on the average person, since, unfortunately, a lot of activities that we do, which are purely local, are still referenced to exchange rates in the parallel market.

    “We have discussed and I have shared with him what we’re doing to improve supply. If you look at the official market, you will find that that market has been fairly stable and the spreads of the difference have not fluctuated as much.

    “We do not believe that the changes going on in the parallel market are driven by pure economic demand and supply, but are touched by speculative demand from people.

    “Some of the plans and strategies, which I am not at liberty to share with you, means sooner rather than later, the speculators should be careful because we believe the things we’re doing, when they come to fruition, may result in significant losses to them.

    “But my presence here is more about the concerns the president has and his needs to know that we are doing something about it, assurances of which I have given him totally.

    “We are doing things which will significantly impact the market in a few days time and we will all see it.

    “The intention is to ensure the environment operates at a level that’s more efficient, but also that is also very reasonable and does not have a negative impact to the best that we can on the lives of the average person.”

  • Naira Falls To N925/$1 On Parallel Market

    Naira Falls To N925/$1 On Parallel Market

    The naira plunged to a record low of N925/$1 on the parallel market on Wednesday as demand for foreign currency outstripped supply.

    This is the aftermath of liberalising the foreign exchange regime, which is a clear departure of what obtained during the President Muhammadu Buhari- led administration.

    At a time during the last administration, the World Bank and other agencies, as well as experts in banking, finance and economy had at different times said having official and parallel value for the naira was hurting the economy and at the same time making a few privileged people pocketing billions of dollars without producing anything as they get the forex from the CBN at official rate and instantly sell same at the black market.

    Recall that during his inauguration on May 29, 2023, President Tinubu had said, “Monetary policy needs a thorough house cleaning. The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.”

    On June 14, 2023, the CBN abolished the segmentation of the forex market into different windows and told Deposit Money Banks to freely float the naira against the dollar and other international currencies.

    Buyers and sellers of foreign currency in the official FX market were then allowed to quote their preferred rates, as against previous practice where CBN dictated rates.

    Wittingly or unwittingly, naira has since continued on a free fall at the parallel market despite the move.

  • Naira’s Exchange Rate Reaches N740/$ at I&E Window


    The Naira on Wednesday, July 26, closed at N740.08 per dollar at the investors and exporters (I&E) window.

    This showed a 6.49 percent appreciation from the N791.42/$ recorded on Tuesday, July 25.

    However, at the parallel/black market where the dollar is traded unofficially, the Naira traded within a range of N860-N865 per dollar in Lagos on Wednesday.

  • I&E Window: Exchange Rate Reportedly Sells For N815/$1

    I&E Window: Exchange Rate Reportedly Sells For N815/$1

    The exchange rate between the naira and dollar sold for an intra-day high of N815/$1 at the official Investor & Exporter Window on Wednesday, June 21, 2023.

    The N815/$1 rate is the highest rate traded for the dollar on the official market since records tracking started in 2018.

    The exchange rate however closed at N763.17/$ at the close of business on Wednesday depreciating from N756.61/$1 recorded a day earlier.

    Meanwhile, the disparity between the black market and the official exchange rate market closed again on Wednesday with the official rates closing at N763/$1.

    The black market rate sold for between N760-N770/$1 according to Nairametrics..

    Recall that on Monday the official and parallel market rates closed at N770.38, a rare exchange rate parity.

  • Naira Falls To N770/Dollar At Official Market

    Naira Falls To N770/Dollar At Official Market

    The Naira on Monday, June 19, closed at N770 per dollar at the investors and exporters (I&E) window.

    FMDQ Securities Exchange Limited said Monday’s closing rate represents a 16.1 percent depreciation from the N663 recorded on the last trading day (Friday).

    Though the Naira is yet to gain stability following changes implemented by the federal government in Nigeria’s foreign exchange (FX) market, data on FMDQ shows that investors traded about $78 million deals on the I&E window.

  • In Defence of the Naira as CBN fight back

    In Defence of the Naira as CBN fight back

    By Adefolarin A Olamilekan

    Economists care much about the health and how nation’s manage five mechanisms around their currency stability; that is, devaluation, revaluation, depreciation, appreciation and redenomination.
    For instance, a decrease in a currency’s value relative to other major currency benchmark’s is called depreciation (this happened through floating exchange transaction or market forces); likewise, an increase in the currency’s value is called appreciation. On the other hand, altering the face value of a currency without reducing its exchange rate is redenomination. Meanwhile,
    revaluation is the opposite of devaluation, that is a change in the exchange rate making the domestic currency more expensive.
    Interestingly, amongst these mechanism mentioned devaluation is most dreaded. Because this speak volume of how a nations economy will be competitive on global trading.
    What then is devaluation? Instructively, devaluation is an official lowering of the value of a country’s currency within a fixed or pegged exchange-rate system. This occurred when the monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket. Hence this demonstrate the working of micro and macroeconomics as well as modern monetary policy,
    In this case, a monetary authority in our clime that is the Central Bank of Nigeria (CBN) maintains a fixed value of the Naira ready to buy or sell foreign currency’s (US Dollar,Pound Sterling and others) with the Naira as a domestic currency at a stated rate.
    Simply, currency devaluation is an indication that the CBN through the Deposit Money Bank (DMBs) will buy and sell foreign currency.
    Although, apart from earlier monetary system to determined currency devaluation such as fixed or pegged rate.
    Critically, there is also market forces determinant or floating exchange rate system. This system act not by CBN monetary action, rather the will to sell or buy on the foreign exchange market (supply and demand).
    Grippingly, we cannot fail to mentioned that all the foregoing are related in distinct to the concept of inflation. Another, monetary economic mechanism that monitor the value of the currency in terms of goods and services related to citizen’s purchasing power.
    Expressly, the reasons for the above narrative are based on the recent media report that that the Central Bank of Nigeria (CBN) as devalued the naira to exchange for ₦630 to a dollar. And the report went viral on social media. The news of naira devaluations came 48 hours after President Bola Ahmed Tinubu announced the plans of the federal government to unify the country’s exchange rate to stimulate the economy.
    Although, the Media Trust Group publisher of Daily Trust newspaper first published it as an exclusive report.
    However, in a swift reaction, the CBN through it Twitter handle, @cenbank, published a screenshot of Daily Trust’s report, with the words ‘Fake News’ branded on it. Adding, that this is “imagination of the newspaper, and the Investors & Exporters (I&E) window traded at ₦465/$1 on June 1”.
    But responding in a statement, Daily Trust said it had evidence of those who bought the dollar at the reported rate, and challenged the CBN to provide any facts to the contrary. Stating that the
    CBN had not provided any proof at the time of filing it report.
    In what look a fight back CBN reminded us of her circular tagged: “Investors’ & Exporters’ FX Window”, dated April 2017. In which the monetary authority explained all about the new window benefit to “boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions”
    Further, the I&E window is described as “the market trading segment for investors, exporters and End Users that allows for FX trades to be made at market determined exchange rate”.
    Instructively, on the I&E window naira exchange rate within this platform may differ from the CBN official exchange rate of ₦461.6
    Understandably, the I&E window is not for every body. It is created for players operating on the corridor of investment, importation and exportation. Accordingly, an investors may buy forex from an exporter. In what is simply an insider dealing on the window, as two entities may wish to trade and exchange a dollar for naira above the CBN official exchange rate.
    Nevertheless, as this happened between both parties in the CBN I&E window mechanism. All transaction have no bearing on the CBN official exchange rate.
    The question that beg for answer is why then is the Investors’ & Exporters’ FX Window perpetuate naira devaluation for excess gains, round tripping and as an officially outpost for illegality amongst it player’s?
    As reported in the media, manufacturers and investors are lamenting that
    “Nigeria’s currency has been long devalued, according to business leaders from manufacturers to importers who say they have been buying dollars at N630 since the beginning of May”. This however is in contrast to the Central Bank of Nigeria refuted claims of “falsehoods and destabilizing innuendos, reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market,”
    A clear indication of what is happening in the CBN I&E window is a back door devaluation of the naira to enrich certain element in the system.
    Although, having acknowledged, that FX market is sensitive, the platform must not be used to create uncertainty in the system. Nigeria operates a multiple exchange window, with the official rates (N464) trading well below the parallel market rate (N750).
    At the same time devaluation do have it benefits (increasing exports, diminishing trade deficits, and reduced interest payment costs on the due government debts) although with exception of developing nation like our struggling with corruption and dysfunctional economic system. Devaluation challenges far outweigh it benefits as it bring about expensive imports,causes inflation,stifle FDIs, and long term negative effects on growth.
    As it is been insinuated, that a 15% devaluation of the Naira is among Tinubu’s earliest priorities, couple with government determination to removed petrol subsidy.
    What then should be done? Noteworthy, currency devaluation as a monetary policy tool and mechanism to boost economic growth,especially trade through export is appreciated. It shortfall and limitations is a priority’s the Tinubu administration should analyzed critically, if they decide to roll out such a policy.

  • CBN Dismisses Reports Of Naira Devaluation

    CBN Dismisses Reports Of Naira Devaluation

    The Central Bank of Nigeria (CBN) has reacted to reports claiming that it has devalued the naira to about 630 naira to a dollar.

    The report of the currency devaluation was earlier reported and circulated across different media platforms.

    However, in statement on Thursday, the bank’s Acting Head of Corporate Communications, Dr Isa Abdulmumin, described it as falsehood.

    “The news report, which in the imagination of the newspaper is exclusive, is replete with outright FALSEHOODS and destabilizing innuendos, reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market,” he said.

    The statement further adds that for the avoidance of doubt, the exchange rate at the Investors’ & Exporters’ (I&E) window traded this morning (June 1, 2023) at N465/US$1 and has been stable around this rate for a while.

    The apex bank cautioned Nigerians to ignore the claims in its entirety, as it is speculative and calculated at causing panic in the market.

  • CBN Devalues Naira To 630/$1 48hrs Into Tinubu’s Regime

    CBN Devalues Naira To 630/$1 48hrs Into Tinubu’s Regime

    The Central Bank of Nigeria (CBN) has devalued the Naira to N631 to the dollar from N461.6 it sold at the Importers and Exporters (I&E) window the previous day.

    The devaluation came 48 hours after President Bola Ahmed Tinubu announced the plans of the federal government to unify the country’s exchange rate to stimulate the economy.

    In his inaugural speech, minutes after he was inaugurated as the 16th president of the country, Tinubu said, “Monetary policy needs a thorough house cleaning. The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.”

    There has been a wide margin between the I&E window and the parallel market, a situation that experts say encouraged round-tripping with Bureau de Change operators.

    The situation has seen the CBN devise several measures to check the practice as well as completely stop the sale of forex to BDCs.

  • No Plan To Phase Out Redesigned Naira Notes — CBN

    No Plan To Phase Out Redesigned Naira Notes — CBN

    The Central Bank of Nigeria has called on the public to reject reports suggesting a withdrawal of the recently redesigned Naira notes from circulation.

    In a released notice, signed by the acting Director of corporate communication, Isa AbdulMumim on Sunday, April 30 the bank stated that the speculation is a ploy by some people to cause panic among members of the public.

    The bank reiterated that the old and new notes have been circulating side by side as they have been taking good delivery of a good quantity of the redesigned notes from the Nigerian Security Printing and Minting company Limited.

    It was also stated that the bank would remain committed to supplying the approved indent for the smooth running of the economy.

    The CBN also emphasized that the redesigned and the old currency, will continue to be accepted as legal tender for transactions ahead of the December 31, 2023 deadline.

    The statement read;

    “We wish to state emphatically that such speculation is unfounded and a ploy by some interests to cause panic among members of the public.

    “We wish to reiterate that the new and old currency notes have been circulating side by side just as the Bank has been taking delivery of a good quantity of the redesigned bank notes from the Nigerian Security Printing and Minting Company (NSPMC) Limited.

    “Furthermore, we are committed to supplying the approved indent for the smooth running of the economy.

    “We, therefore, urge members of the public to disregard any report suggesting a phase-out of the redesigned currency.

    ”For the avoidance of doubt, the redesigned and old notes will continue to be accepted as legal tender.

    “They will circulate side-by-side for transactions ahead of the December 31, 2023 deadline, when the old N1000, N500 and N200 banknotes will eventually be phased out. Please be guided accordingly.”

  • BREAKING: Old Naira Notes Remain Legal Tender – CBN

    BREAKING: Old Naira Notes Remain Legal Tender – CBN

    The Central Bank of Nigeria (CBN) on Monday disclosed that the old N200, N500 and N1000 notes remain legal tender until December 31, 2023.

    CBN spokesperson, Isa Abdulmumin, who announced the development in a statement, stressed that the apex bank has ordered commercial banks to dispense and accept the deposit of old Naira notes.

    The statement reads: “In compliance with the established tradition of obedience to court orders and sustenance of the Rule of Law Principle that characterized the government of President Muhammadu Buhari, and by extension, the operations of the Central Bank of Nigeria (CBN), as a regulator, Deposit Money Banks operating in Nigeria have been directed to comply with the Supreme Court ruling of March 3, 2023,” the statement reads.

    “Accordingly, the CBN met with the Bankers’ Committee and has directed that the old N200, N500 and N1000 banknotes remain legal tender alongside the redesigned banknotes till December 31, 2023.

    “Consequently, all concerned are directed to conform accordingly.”