Skip to main content

NAIRA WEAKENS TO LOWEST IN THREE YEARS

NAIRA WEAKENS TO LOWEST IN THREE YEARS
The Naira yesterday weakened to the lowest in over three years in the parallel market due to increased demand for dollars amid foreign-currency shortages.

The local currency depreciated to N495 to a dollar yesterday, lowest since February 23, 2017, widening the gap with the official rate of N379.5 to over 30 per cent. The currency traded in the interbank market at 389.74 as of 4:54p.m. in Lagos.

Agency reports quoted traders as alleging a groundswell of diversion of dollars, a development which heightened scarcity of the green back in the parallel market this week.

There is a diversion of inflows away from official channels to the parallel market due to the gap in rates, Murega Mungai, trading desk manager for Aza Finance said in a note Thursday.

The market spread has created arbitrage opportunities for recipients of remittances such as exporters and private individuals.

Pent up demand in the foreign exchange market is not unprecedented given increase purchase of items in preparation for seasonal festivities, Nkemdilim Nwadialor, analyst at Tellimer markets said. “This has been compounded by the fact that all through the year, we have had dollar shortage,” she said.

A directive from the Central Bank of Nigeria (CBN) that exporters must register with it through an online portal has slowed the export of cocoa and other non-oil exports. That will likely worsen foreign-exchange shortage in Africa’s biggest economy and impede the government’s efforts to diversify the economy away from its dependence on oil.

Nigeria’s foreign exchange reserves, currently at $35.4 billion has dropped about 3 % since May when it climbed to 36.6 billion, after picking up from April lows when it was hit by fall in crude prices and Coronavirus pandemic.

The gap in the exchanges rates in the parallel and official markets is because of decline in revenue from oil, Nigeria’s main export, Minister of Finance, Budget and National Planning, Zainab Ahmed said.

The government is concerned about the spread and is taking steps to address the issue of scarcity, but “the progress is not as much as we hoped,” she said in a Bloomberg TV interview yesterday.

“We hope to get to an even level very soon so the impact of the exchange rate will become moderated,” Ahmed said.


Comments

Post a Comment

Popular posts from this blog

CALL FOR APPLICATIONS

CALL FOR APPLICATIONS: 2021/2022 FEDERAL GOVERNMENT  SCHOLARSHIP AWARD The Honourable Minister of Education hereby invites interested and qualified Nigerians to participate in the 2021/2022 Federal Government Scholarship Awards Apply Here: https://t.co/y8FJD5Ocf5 https://t.co/LBYON30DCX
Post a Comment
Read more

Okomu Oil company gives 35 indigent students bursary awards in Edo

Okomu Oil company gives 35 indigent students bursary awards in Edo   Okomu Oil company has given out cheques of N90,000 each to no fewer than 35 students of tertiary institutions from about 20 host communities in three local government areas where it operates in Edo. The Managing Director of the company, Dr Graham Hefer, presentated cheques to the beneficiaries at a ceremony held in Okomu on Friday, in Ovia South West local government area (LGA) of Edo. The host communities from where the beneficiaries were drawn are located in Ovia South West, Ovia North-East and Uhunmwode LGAs. Hefer said the gesture was part of the company’s Corporate Social Responsibility (CSR) to encourage educational pursuit among indigent students in its host communities through award of bursary. ” It’s a fact that this year has been challenging and tough, but as a company, we are happy that we are able to still fulfil part of of CSR to our host communities. ” This year’s message is that ...
Post a Comment
Read more

Nigeria’s second-largest cement maker eyes new mega plant

Nigeria’s second-largest cement maker eyes new mega plant Nigeria’s BUA Cement plans to set up a mega plant in the Northeastern Adamawa State in furtherance of the company’s business expansion program, Chairman Abdulsamad Rabiu has said. The 3 million metric tonnes cement plant will be located in Guyuk and Lamurde local governments of the state, as preliminary findings show that the LGAs are reputed to have a good quality of limestone deposits, Rabiu said during a courtesy visit to the Adamawa State Governor, Ahmadu Umaru Fintiri in the Government House, Yola. The Guyuk Cement Plant will be accompanied by a 50 megawatts power plant to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing 3,000 direct and 5,000 indirect jobs, according to the Chairman.\ The planned investment in Adamawa will be BUA’s major investment in North-East Nigeria and its strategy of sourcing raw materials locally – the majority of the firm’...
Post a Comment
Read more