…Lack of hedge exposes foreign investors
The Nigerian naira on Thursday fell to N1,400 against the US dollar on the black market, following renewed demand pressure in the foreign exchange (FX) market.

With the current exchange rate, the naira has lost 19.64 percent in two weeks when compared to N1,125 per dollar quoted on April 12, 2023 on the parallel market, popularly called the black market.

At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira depreciated to N1,308.52 per dollar on Wednesday.


Compared to the level on April 12, 2024, the naira has weakened by 12.69 percent from N1,142.38 per dollar in the last two weeks, according to data from the FMDQ Securities Exchange.

Lack of hedge exposes foreign investors
The naira has retreated this week as dollar liquidity dips on the back of the exit of some foreign portfolio investors who have been spooked by the Israel-Hamas war and a stronger dollar.


“There’s a lack of hdege- no NDFs and no ETDs- so FPIs are exposed to the Israel-Hamas war and with a statement of no intention to intervene by the CBN, they are selling their fixed income securities to take out their capital,” a source familiar with the matter told BusinessDay.


“The market needs exchange rate hedging products to manage volatility,” the source said.

On Monday, the Central Bank of Nigeria (CBN) approved the allocation of $15.83 million to 1,583 Bureau De Change (BDC) Operators.


The CBN in a letter to BDCs announced the allocation of $10,000 to Bureau De Change operators across the country. The allocation comes at a rate of N1,021 per US dollar, aimed at stabilizing the foreign exchange market and ensuring accessibility of foreign currency to eligible end users.

According to a letter released by the CBN to the President Association of Bureau De Change Operators of Nigeria, all eligible BDCs are directed to initiate payments of the Naira deposit to specified CBN Naira Deposit Account Numbers starting from Monday, April 22, 2024. Upon submission of confirmation of payment and necessary documentation, the CBN will disburse foreign exchange at the respective CBN branches.


The directive emphasizes that BDCs are obligated to sell the allocated foreign currency to eligible end users at a spread not exceeding 1.5 percent above the purchase price. This measure aims to ensure transparency and fair pricing in the foreign exchange market, thereby benefiting both BDC operators and end users.

Hassan Mahmud, director of the trade and exchange department at the CBN, reiterated the importance of BDCs adhering to the rules and conditions outlined in previous communications and operational guidelines.

“The latest move by the CBN reflects ongoing efforts to stabilize the foreign exchange market, promote transparency, and facilitate access to foreign currency for businesses and individuals in Nigeria. The allocation of $10,000 to BDC operators is expected to have a positive impact on the economy, particularly in facilitating international trade and investment,” BDC operator said.


https://businessday.ng/news/article/naira-retreats-to-1400-on-renewed-demand-pressure

Cardoso is doing well. The naira will strengthen against the dollar again very soon

So who are they going to blame now?


Don't float Naira you horridly went and float it now

and agbado people defended it with all thier might.

Now we are paying more in subsidy due to naira devaluation

We've also dropped to 3rd place in Africa


they'll still come here and defend again watch

BrodaBenad:
So who are they going to blame now?


Don't float Naira you horridly went and float it now

and agbado people defended it with all thier might.

Now we are paying more in subsidy due to naira devaluation

We've also dropped to 3rd place in Africa


they'll still come here and defend again watch

Full local production of petroleum products will strengthen the Naira in the long run once and for all.

Relax!

Speculators are back again. Cardoso was busy subsidising the dollar now here we are.

Damn! It's seriously 1402 now o.

Tinubu should stop fighting to stabilize naira. He should however channel the energy to produce most of the things we import.

When we are self sufficient, we can start exporting. Watch Facebook/Instagram reels and see how Indians produce almost everything from their backyard. FG can send brilliant minds to go learn, come back and reproduce them here while they work on electricity.

Not even brilliant minds sef, he should enter Aba here, pack people and send them to China/India.

Oops! Those ones no go gree come back sef.

BrodaBenad:
So who are they going to blame now?


Don't float Naira you horridly went and float it now

and agbado people defended it with all thier might.

Now we are paying more in subsidy due to naira devaluation

We've also dropped to 3rd place in Africa


they'll still come here and defend again watch

The problem wasn't even the float. The problem was the fact that they floated and then reversed the float by defending the naira with subsidy. The BDCs were simply collecting the forex and stocking up because clearly it wasn't going to be sustainable.

Paraman:
Cardoso is doing well. The naira will strengthen against the dollar again very soon

You've been saying this for the past 8yrs under buhari... propaganda no dey tire you


You people killed this country

Tinubu is the worse thing to happen to Nigeria.

BrodaBenad:
So who are they going to blame now?


Don't float Naira you horridly went and float it now

and agbado people defended it with all thier might.

Now we are paying more in subsidy due to naira devaluation

We've also dropped to 3rd place in Africa


they'll still come here and defend again watch

Peter obi as usual

Reno o mockery come with ur shoe, ur attention is needed here

They are thieves.
They will deliberately manipulate the dollar and then mop it up and go back to manipulate it again and resell.

Racoon:
Speculators are back again. Cardoso was busy subsidising the dollar now here we are.

So he has stopped subsidizing it? Can you show with clear evidence how and how much he used to subsidize the naira?

Tinubu came to destroy our economy. They are systematically converting our reserves to their personal monies.

Reserve don deplete, yet dollar still Dey rise.

Nawo oo. Na false alarm be all de defending.

Donaldoni:


Full local production of petroleum products will strengthen the Naira in the long run once and for all.

Relax!

Why did tinubu not wait till the full local production of petroleum products before floating the Naira

Racoon:
Speculators are back again. Cardoso was busy subsidising the dollar now here we are.

The same thing the last cbn governor did. New BDC millionaires will soon emerge again.

I been dey happy say dollar dey fall.

nonesense people

BrodaBenad:
So who are they going to blame now?


Don't float Naira you horridly went and float it now

and agbado people defended it with all thier might.

Now we are paying more in subsidy due to naira devaluation

We've also dropped to 3rd place in Africa


they'll still come here and defend again watch

It's better to float the naira, the US economy is also going through it's own turbulence.
Argentina is into a big crisis, Nigeria was headed that way too except we float the currency.
Truth is that we should have floated the Nigeria years ago

ogododo:





…Lack of hedge exposes foreign investors
The Nigerian naira on Thursday fell to N1,400 against the US dollar on the black market, following renewed demand pressure in the foreign exchange (FX) market.

With the current exchange rate, the naira has lost 19.64 percent in two weeks when compared to N1,125 per dollar quoted on April 12, 2023 on the parallel market, popularly called the black market.

At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira depreciated to N1,308.52 per dollar on Wednesday.


Compared to the level on April 12, 2024, the naira has weakened by 12.69 percent from N1,142.38 per dollar in the last two weeks, according to data from the FMDQ Securities Exchange.

Lack of hedge exposes foreign investors
The naira has retreated this week as dollar liquidity dips on the back of the exit of some foreign portfolio investors who have been spooked by the Israel-Hamas war and a stronger dollar.


“There’s a lack of hdege- no NDFs and no ETDs- so FPIs are exposed to the Israel-Hamas war and with a statement of no intention to intervene by the CBN, they are selling their fixed income securities to take out their capital,” a source familiar with the matter told BusinessDay.


“The market needs exchange rate hedging products to manage volatility,” the source said.

On Monday, the Central Bank of Nigeria (CBN) approved the allocation of $15.83 million to 1,583 Bureau De Change (BDC) Operators.


The CBN in a letter to BDCs announced the allocation of $10,000 to Bureau De Change operators across the country. The allocation comes at a rate of N1,021 per US dollar, aimed at stabilizing the foreign exchange market and ensuring accessibility of foreign currency to eligible end users.

According to a letter released by the CBN to the President Association of Bureau De Change Operators of Nigeria, all eligible BDCs are directed to initiate payments of the Naira deposit to specified CBN Naira Deposit Account Numbers starting from Monday, April 22, 2024. Upon submission of confirmation of payment and necessary documentation, the CBN will disburse foreign exchange at the respective CBN branches.


The directive emphasizes that BDCs are obligated to sell the allocated foreign currency to eligible end users at a spread not exceeding 1.5 percent above the purchase price. This measure aims to ensure transparency and fair pricing in the foreign exchange market, thereby benefiting both BDC operators and end users.

Hassan Mahmud, director of the trade and exchange department at the CBN, reiterated the importance of BDCs adhering to the rules and conditions outlined in previous communications and operational guidelines.

“The latest move by the CBN reflects ongoing efforts to stabilize the foreign exchange market, promote transparency, and facilitate access to foreign currency for businesses and individuals in Nigeria. The allocation of $10,000 to BDC operators is expected to have a positive impact on the economy, particularly in facilitating international trade and investment,” BDC operator said.


https://businessday.ng/news/article/naira-retreats-to-1400-on-renewed-demand-pressure

Nlfpmod, they will call us name, but truth is until we start exporting, we may be in serious water, but kids will be here praising Balabluuu.

Where are those people that kept insulting Igbos and Obidient because of this Naira issue...

Can you apologize now

peleson1:

Why did tinubu not wait till the full local production of petroleum products before floating the Naira

Nobody will like to produce locally to sell at a loss. Nigerians had to be prepared for the forthcoming reality.

The economy of a nation should not be entrusted into the hands of BDCs
They should be proscribed.
Commercial banks is more manageable by CBN to handle forex than BDCs

BrodaBenad:
So who are they going to blame now?


Don't float Naira you horridly went and float it now

and agbado people defended it with all thier might.

Now we are paying more in subsidy due to naira devaluation

We've also dropped to 3rd place in Africa


they'll still come here and defend again watch

of course it is Peter Obi they will blame for their incompetent

Flesh and blood did not reveal this to Bwala

Have we started producing?

Paraman:
Cardoso is doing well. The naira will strengthen against the dollar again very soon

Sell the refinery 100% then we can take the govt seriously but if they decide to run them, they'll never work

Donaldoni:


Full local production of petroleum products will strengthen the Naira in the long run once and for all.

Relax!

Racoon:
Speculators are back again. Cardoso was busy subsidising the dollar now here we are.

We need more Loans or let's kukuma clear the reserves

DMerciful:
Have we started producing?

We're just starting.

iwaeda:


Nlfpmod, they will call us name, but truth is until we start exporting, we may be in serious water, but kids will be here praising Balabluuu.

Nawa oo.

politician is the worse thing to happen to Nigeria.

DMerciful:
Sell the refinery 100% then we can take the govt seriously but if they decide to run them, they'll never work

Even if you sell the refineries, the new owners will not want to run at a loss