• Again, Naira falls abysmally low against major currencies, see exchange rate

    07/Nov/2016 // 1766 Viewers

     

    PARIS, NOVEMBER 7, 2016: (DGW) THE  Naira has  again fallen at the inter-bank and the parallel markets respectively on Monday, the News Agency of Nigeria has reported.

    The naira exchanged at N350 to a dollar from N328 it traded last Friday.
    At the Bureau De Change (BDC) segment, the naira closed at N385 against the dollar, CBN rate, while the Pound Sterling and the Euro closed at N564 and N510 respectively.

    Trading at the parallel market saw the naira exchanged at N470 to the dollar, while the Pound Sterling and the Euro traded at N560 and N510 respectively.

    Traders at the market express hope that the naira would see better days as Diaspora remittances was expected to boost liquidity at the yuletide season.


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  • Volkswagen to start recalling cars in January

    07/Oct/2015 // 254 Viewers

    Volkswagen is to start recalling diesel cars fitted with emissions test-cheating software from January. The carmaker's new chief executive, Matthias Mueller, made the comments in an interview with a German newspaper, ahead of a deadline to submit the plan to regulators. Also today: the French bakers fined for providing customers with their daily bread.


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  • Air France pilots call for French government to intervene in dispute

    07/Oct/2015 // 283 Viewers

    After the violent scuffles at a meeting between unions and Air France management on Monday, the union representing pilots has called for the French government to intervene in the dispute over the carrier's cost-cutting plans. The head of the SNPL union says the state should be represented in a fresh round of talks.


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  • BRIEF-NPF Microfinance Bank posts FY pre-tax profit of 689 mln naira versus 617 mln naira last year

    08/Apr/2016 // 254 Viewers

     

    April 8 (Reuters) - Npf Microfinance Bank Plc :

    * Fy pre-tax profit of 689 million naira versus 617 million naira last year

    * Fy gross earnings 2.593 billion naira versus 2.135 billion naira last year Source text for Eikon: Further company coverage:


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  • IMF Chief Christine Largarde's devaluation proposal flawed but Nigeria's economy could be in serious trouble

    08/Feb/2016 // 465 Viewers

     

    Nigeria's foreign reserves are feeling pain of both its reliance on oil for forex inflows and its attempts to arrest the slide in the Naira as oil prices tumble
     
    The IMF Chief Christine Largarde's view on Nigeria's economic diversification is misleading and can at best be described as a 'cosmetic assessment' in terms of revenue generation.— Ken UwotuLONDON, UNITED KINGDOM, February 8, 2016 /EINPresswire.com/ -- Nigeria's foreign reserves are feeling the pain of both its reliance on oil for forex inflows and its attempts to arrest the slide in the Naira as the price of oil continues to spiral downwards. The Central Bank of Nigeria has warned a recession is imminent if proactive steps are not taken to revive growth in key economic sectors as the country face its worst financial crisis in years. Nigeria’s economic growth in the past decade has not always been about oil but the government’s inability to tax services and agriculture industries has left it heavily reliant on revenue from oil.
     
    The fall in oil price has created some challenges for the government with the country's budget deficit expected to double to 2.2 trillion naira ($11bn, £7.4bn) this year. In a reaction to the global oil crisis President Muhammadu Buhari has stated his government would seek funding overseas of 900bn naira as well as 984bn naira domestically in an attempt to plug gaps in the budget.
     
    The International Monetary Fund (IMF) Managing Director, Mrs. Christine Largarde on her recent visit to Nigeria stated “The economy is well diversified; it is no longer dominated by agriculture and oil with services accounting for almost half of Gross Domestic Product (GDP), including a significant home-grown film industry and innovative start-ups from fashion to software development”. Mrs. Christine Largarde's view on Nigeria's economic diversification is misleading and can at best be described as a 'cosmetic assessment' in terms of revenue generation. The Nigerian government has failed to generate taxes from agriculture and services industries and according to the World Bank, Nigeria’s tax revenue is one of the lowest in the world today. Some would argue true diversification is measured by a country’s export volumes and the overall contributions of export revenue to a nation’s foreign reserves. Nigeria derives 90% of its foreign exchange from crude oil while all other sectors collectively contribute just 10%.
     
    The IMF has helped out a number of African nations in difficult times, it approved a $918 million bailout package for Ghana in April 2015 to restore debt sustainability and macroeconomic stability but it hasn’t always been a beacon of support in Africa; the IMF backed a structural adjustment program in Nigeria which failed to address a number of economic problems. Instead, external debt swelled, the fiscal gap widened and economic growth became far-fetched. It is therefore prudent for the Minister of Finance, Mrs Kemi Adeosun and the Nigerian government to take on board advice offered by international financial organisations but the Minister must review both the macroeconomic and microeconomic factors that affect Nigeria's economy before deciding on a fiscal policy and strategy to tackle the challenges facing the economy.
     
    Currency devaluation is intended to make exports become cheaper and more competitive to foreign buyers thereby providing a boost for domestic demand; higher level of exports should lead to an improvement in the current account deficit however, the devaluation of Nigeria's currency, the Naira may fail to deliver these benefits because revenue generated from Nigeria's exports is currently in decline with non-oil exports dropping significantly from $664 million in the second quarter of 2014 to $391 million during the corresponding period of 2015.
     
    The Nigerian government favours forex restriction over the devaluation of the Naira but the government may be forced to officially devalue the Naira if the price of oil continues to fall and the Central Bank of Nigeria can no longer justify using the country's fast depleting foreign reserves ($29.13 billion as of 29/12/2015) to continue propping up the Naira. The present restrictions on the autonomous foreign exchange market by the government should only be considered as a temporary measure as this approach may significantly affect Nigeria’s already dwindling export earnings.
     
    The Oil Petroleum Exporting Countries (OPEC) lead by Saudi Arabia is desperately trying to recover market shares from US Shale oil producers; this battle for dominance in the oil market has led to the drastic drop in oil prices. Africa's biggest economy Nigeria could be heading into uncharted territory as the price of oil has now dropped to $30.98/barrel, a price less than Nigeria's total cost of oil production at $31.6/barrel (source - OPEC). The national budget recently submitted to the Nigerian parliament by President Buhari is based on an oil price benchmark of $38 per barrel.
     
    Nigeria's budget shortfall of $11 billion has forced the government to source for emergency loans totaling $3.5 billion from the World Bank and the African Development Bank. The IMF and World Bank have long been advocates for the devaluation of the Naira and are mostly likely ask Nigeria to officially devalue its currency as a prerequisite for any emergency loans. Mrs. Kemi Adeosun, Nigeria's Finance Minister further clarified the government’s position on the issue of emergency loans; she states the government seeks loans at "concessionary rates" as low as 1.5 percent from international agencies to fund infrastructure projects before returning to the eurobond market. The Nigerian government is now in exploratory talks with China Exim Bank for a possible loan.
     
    The Nigerian government is likely to stand firm on its policy of attempting to spend its way out of its current economic crisis. The government intends to borrow money in the form of loans to try and plug the financial gaps in the 2016 budget with the hope oil prices will return to 'profitable levels' for the country in the near future however with the demand for oil in China slowing down and Iran set to pump 500,000 additional barrels of oil into the market a day, it is unlike oil prices will rise significantly in the short to medium term.
     
    Ken Uwotu 
    Political Analyst On Nigerian Affairs, London


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  • Naira crashes, trades at N250 against US Dollar

    09/Dec/2015 // 348 Viewers

     

    PARIS, DECEMBER 9, 2015: Reports reaching us Wednesday say Naira, the Nigerian domestic currency hit another record low against the US dollar. Naira traded N250 to $1 at the parallel market.

    Financial experts attribute this to steep  drop in Nigeria's foreign reserve probably caused by the dwindling oil prices. The British pound traded at N400 at the parallel market.

    Nigeria's Central Banks says the Naira crash has nothing to do with the dwindling foreign reserves insisting that the bank refused to make the dollar available to Bureau de Change operators, a source told our reporter in Lagos.

    However, the IMF and Nigerian financial experts  have been mounting pressure on the Buhari administration to further devalue the Naira in order to achieve equilibrum price against the dollar, but the president has consistently refused this.

     


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  • Forex Scarcity: Naira remains stable on the parallel market at an outrageous rate (See exchange rate on Friday)

    09/Dec/2016 // 870 Viewers

     

    PARIS, DECEMBER 9, 2016: (DGW) The Nigerian Naira , according to reports, remains stable on the parallel market on Friday exchanging for much as N485 to the US dollar.

    The Pound Sterling and the Euro closed at N602 and N515, respectively.
    At the interbank market, the Naira also remained stable at N305.50 to a dollar.

    Trading at the Bureau De Change (BDC) window saw the Naira sold at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro exchanged at N606 and N515, respectively.

    Traders at the market said that the scarcity of dollar persisted, leading to slow activities.


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  • Lamido Sanusi criticises Nigerian President Buhari's naira policy

    09/Feb/2016 // 364 Viewers

     

    Mr Sanusi said the drawbacks of the policy "far outweigh its dubious benefits", the Financial Times reports.
    President Muhammadu Buhari told the BBC last week that he was not convinced of the need to "murder" the naira.
     
    The falling oil price has put pressure on his currency policy.
    The authorities are keeping the official naira rate at around 200 to the US dollar, but the black market rate is closer to 300.
     
    The government relies on oil exports for vital foreign exchange and the declining price means there are fewer dollars in the country.
    "The government does not have the reserves to keep the exchange rate at its official level in the market," Mr Sanusi told the Financial Times.
    The policy has "never worked" wherever it has been tried, he added.
     
    But Mr Buhari told the BBC that he is yet to be convinced that he should allow the currency to be devalued.
    In an effort to sustain the policy, the government has imposed currency restrictions, and halted the importation of certain goods in order to stop dollars leaving the country.
    Mr Sanusi was the central bank governor from 2009 to 2014, when he was suspended by then-President Goodluck Jonathan following a row over corruption in the oil sector.
     
    He is now the emir of Kano, an influential religious post among Muslims in Nigeria.
     
    BBC


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  • Again, NIGERIA's external reserves show a decline of $3.22 billion compared with $29.06 billion in 2015 under BUHARI

    09/Jan/2017 // 376 Viewers

     

    The nation’s external reserves closed last year with a total balance of $25.84 billion - 30 December - showing a decline of $3.22 billion  compared with $29.06 billion it stood as at December 31, 2015.

    The figure from the Central Bank of Nigeria (CBN) indicates a 12.7 per cent decline year on year (y/y), but increased by 4.2 per cent month-on-month, up from $24.69 billion on November 28 to $25.781, due to a slight recovery in global oil prices.

    Despite demand pressure, the nation’s external reserves and the volume of money or other assets held by the apex bank recorded an increase of $642 million in one month, after weeks of consistent and gradual gains.

    These are in spite of a US$2.3 billion decline in average inflows of foreign exchange into the CBN every month over the last 26 months as revealed by the apex bank governor, Dr Godwin Emefiele.

    CBN had disclosed in its data on foreign exchange utilisation for October 2016, that it granted  access to about 7,792 requests for foreign exchange, valued at over $867 million through the inter-bank window to enable them source vital raw materials and spare parts for their respective industries.

    The accretion of Nigeria’s foreign exchange (forex) reserves, which started about two months ago, continued in the new year, as the data by the apex bank showed that reserves had grown to $26.094 billion, signifying a slow but steady improvement in the country’s current account balance.

    The present value of the reserves, derived mostly from the proceeds of crude oil sale, represents an appreciation by $2.137 billion or nine per cent, compared with $23.957 billion as of November  2016.

     


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  • Again, Naira depreciates on the parallel market, see exchange rate as of Wednesday

    09/Mar/2017 // 5730 Viewers

     

    The naira yesterday again depreciated sharply against dollar on the parallel market due to upsurge in demand for dollars importers travelling to China and the rest of the world.

    Vanguard reports  that the parallel market exchange rate rose from N448 per dollar on Tuesday to close at N465 per dollar at the close of business yesterday, indicating N17 depreciation.

    It was gathered that the market experienced upsurge in demand for dollars yesterday for end-users travelling to China for import business.
    A bureau de change Chief Executive who spoke on condition of anonymity said that the number of end-users travelling to China for business purposes  has been on the increase since the conclusion of the recent holiday season in China, adding these are the source of increased demand for dollars in the parallel market. He said that the situation is aggravated by the fact that most of the items to be imported are part of the 41 items excluded from the official foreign exchange market.

    He, however, expressed optimism that the demand pressure may subside this week in view of the expected dollar sales to BDCs by the Central Bank of Nigeria tomorrow, especially given the increase in number of BDCs accessing the dollar sales from around 2000 to 3000.

    The parallel market exchange rate had dropped from a high of N520 per dollar on February 20 to N448 per dollar on Tuesday in response to $1.12 billion supply into the foreign exchange market by the CBN.

    Since Monday February 20, 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has intervened in the forex market six times as follows: Tuesday February 21, $417 million; Thursday February 23, $231 million; Monday February 27, $180 million; Friday March 3, $350 million, Monday March 6, N367 million; and on Tuesday with $100 million.


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