Naira falls to 230, dollar supply dries up

JULY 2, 2015 : OYETUNJI ABIOYE


These are definitely not interesting times for the nation’s economy, particularly the national currency, the naira, no thanks to the depleting reserves and the subsequent banning of importers of 41 items from the foreign exchange market by the Central Bank of Nigeria.

Barely 10 days after the CBN stopped forex sale to importers of rice, textile and 39 other items, the naira on Wednesday crashed to 230 against the United States dollar at the parallel market, down from 218 recorded on June 23 when the new forex rule was introduced.

The policy, which has pushed huge forex demand from the interbank (official) market to the parallel (black) market and the Bureau de Change retail segment, has led to artificial scarcity of dollar and other major foreign currencies as operators now hoard them in anticipation of higher prices.

The naira had fallen to 220, 223, 226.5 and 228 against the dollar in the past one week.

Black market and BDC operators, however, told our correspondent that serious dollar liquidity squeeze was already hitting the market and operators were no longer in possession of huge stock of forex to meet rising demands, especially from the importers of the banned items.

Using the CBN figures, analysts had estimated that about $5.7bn quarterly forex demand was being transferred from the official interbank market to the black market.

“The situation is getting critical now. There is serious dollar liquidity squeeze in the market now. The demand is overwhelming and both the black market and the BDC segment can no longer meet the demand,” a black market operator told our correspondent on Wednesday.

“The market is very volatile now as a result of the restrictions placed on about 41 items by the central bank. Most importers are now patronising the parallel market to source their dollars,” the head of a BDC, Mr. Harrison Owoh, told Reuters on Wednesday,.Meanwhile, the Association of Bureau De Change Operators has written to the CBN asking it to intervene in the dollar scarcity in the parallel market and the BDC segment to save the naira from crashing further.

In the letter, a copy of which was obtained by our correspondent, the association expressed its readiness to work with the CBN to stabilise the market.

The letter, signed by association’s President, Alhaji Aminu Gwadabe, and Executive Secretary, Uduma Cletus, advised the CBN to increase its weekly forex sale to the BDCs from $30,000 to $50,000.

The body also asked the central bank to reintroduce the autonomous market where it could sell about $100,000 to the operators.

Gwadabe told our correspondent that it was expedient for the CBN to increase its forex sale to the BDCs in order to stabilise the naira.

Some analysts believe the naira may hit 240 against the dollar in the coming days.

However, the naira traded at 198.95 to the dollar at the interbank market on Wednesday, according to Reuters.

The central bank had lowered its exchange rate peg to N196.95 to the dollar on Tuesday from N196.90 last week

Also, a trade of $735.74m went through on Nigeria’s interbank currency market at N198.45 on Wednesday, Thomson Reuters data showed.

Market sources said a foreign client had sold dollars to a bank in Nigeria. Total interbank market volumes stood at $1.12bn on Wednesday, far higher than typical trading sessions since the central bank introduced a naira peg in February.

Meanwhile, the CBN has reminded dealers and banks that their dollar cash sale for six items, including schools fees, insurance premium, basic travel allowance and monthly mortgage should not exceed $5,000.

In a new circular dated July 1, 2015, the CBN also warned banks not to sell forex to the importers of the 41 items that were banned from the forex market last week.


www.punchng.com/news/naira-falls-to-230-dollar-supply-dries-up/

Eleyi gidi gan oo0o0!!!!!!

Leading to crises and America will be happy to hear this.

Mbaka, what have you to say abi God no dey reveal to you the ones wey get good luck and the ones wey get bad luck?

Okay

ojimbo:
Mbaka, what have you to say abi God no dey reveal to you the ones wey get good luck and the ones wey get bad luck?

You don't judge that way, your yesterday is now hunting you; you're now crying foul.

when will they sack this man? he is ruining the economy

Buhari has destroyed our economy. I knew what I was saying when I was demanding for the Dullard's Certificate. He knows ziltch about economics. He's a confirmed dullard from Daura

[size=25pt]#ShowYourCertificate
#BabaOneChance
#DauraDullard[/size]

mistabiola:
Leading to crises and America will be happy to hear this.

America has got nothing to do with the devaluation if your Naira.

ojimbo:
Mbaka, what have you to say abi God no dey reveal to you the ones wey get good luck and the ones wey get bad luck?

Lolz
Can't possibly imagine how Jonathan would be feeling. I mean, that man was simply brought down by clueless people.

Following

Now what has changed since this Rudderless party took over power, on the contrary, things have gone worst.


The North just wanna be in Power at all cost without any iota of idea how to improve on the developmental progress of the country.

Unfortunately as it is the north always found a willing accomplice in their quest to continue ruining the nation.

A particular group of people has ran a country for over 40years with nothing to show for it other than their very region remaining the poorest even against another region that went through the bitter experience of civil war defeat.

This is not about pessimism, but I can assure everyone that until Nigeria is restructured to place Merit above such mediocre policies like Federal Character & Quota System, nigeria would remain stagnant even for a hundred years from now.

Lucasbalo:
America has got nothing to do with the devaluation if your Naira.

The devalued naira will drive export of local products, which do not exist in the required volume for now, but will create an additional burden on the populace, the reason being that the cost of consumables, across the board, will escalate.

As the direct consequence of the raise in the base lending rate the cost of loanable funds would have risen. In such case the development will be counterproductive, and against the thrust of the government’s touted plan to create jobs.

The prices of local products serve as an incentive and a toast for foreign buyers which the America is one of them and it will only cause more damage than good to Nigeria economy.

Very soon, zoo's money will be more worthless than Zimbabwean currency.

mistabiola:


The devalued naira will drive export of local products, which do not exist in the required volume for now, but will create an additional burden on the populace, the reason being that the cost of consumables, across the board, will escalate.

As the direct consequence of the raise in the base lending rate the cost of loanable funds would have risen. In such case the development will be counterproductive, and against the thrust of the government’s touted plan to create jobs.

The prices of local products serve as an incentive and a toast for foreign buyers which the America is one of them and it will only cause more damage than good to Nigeria economy.

Na today?
What do u produce that you export?

mistabiola:


The devalued naira will drive export of local products, which do not exist in the required volume for now, but will create an additional burden on the populace, the reason being that the cost of consumables, across the board, will escalate.

As the direct consequence of the raise in the base lending rate the cost of loanable funds would have risen. In such case the development will be counterproductive, and against the thrust of the government’s touted plan to create jobs.

The prices of local products serve as an incentive and a toast for foreign buyers which the America is one of them and it will only cause more damage than good to Nigeria economy.

And you say that to put the blame on America for the bastardization of Nigeria's economy by so many of the past worthless leaders of Nigeria.

EasternPride:


Na today?
What do u produce that you export?

Petroleum and Petroleum products, Cocoa, Rubber, Machinery, Processed foods, Entertainment etc. Have a nice day.

Lucasbalo:
And you say that to put the blame on America for the bastardization of Nigeria's economy by so many of the past worthless leaders of Nigeria.

I'm not blaming them, I mean it's going to be an economic advantage for them.

mistabiola:


I'm not blaming them, I mean it's going to be an economic advantage for them.

Believe me my brother, it doesn't make a difference if 1Naira is equivalent of 1$. America's economy doesn't need Naira.

This is bad news for big importers I swear

Lucasbalo:
Believe me my brother, it doesn't make a difference if 1Naira is equivalent of 1$. America's economy doesn't need Naira.

But it's going to affect our economy negatively.

I'm worried about my country, I can't deny I'm a Nigerian.

Jesus wept

mistabiola:


But it's going to affect our economy negatively.

I'm worried about my country, I can't deny I'm a Nigerian.

I see your point. I don't like it myself and it's kind of advantageous to me because I have business dealings in Nigeria. I have to feel for Nigerians since I am of both stock and I am very frequent to Nigeria both for business and holidays . Hopefully, the leaders will turn the economy around for the benefit of all Nigerians.

I think buhari should sack Godwin emefiele before he ruins his govt for him.

Lucasbalo:
I see your point. I don't like it myself and it's kind of advantageous to me because I have business dealings in Nigeria. I have to feel for Nigerians since I am of both stock and I am very frequent to Nigeria both for business and holidays . Hopefully, the leaders will turn the economy around for the benefit of all Nigerians.

Which business are you into I saw Money (laundering) on your signature . The main problem of our leaders apart from insecurity is Money Mismanagement.

richidinho:
Chai..if this man stays beyond 2019 our currency will be like Zimbabwe dollars

Oboy!!! This is a curse. It seems you're saying this out of ignorance . I wish Nigeria all the best

Even the previous government told us that we should tighten our belts especially this year, the minister of finance painted a very gloomy picture


Now a new government is in place we expect that things will change, but things must get bad then get better

mistabiola:


Which business are you into I saw Money (laundering) on your signature . The main problem of our leaders apart from insecurity is Money Mismanagement.

I am not into money laundering. I work for a big investment firm with offices in all continents of the world including Africa where my firm hqtrs is based in Johannesburg. I frequent S/A and Nigeria a lots and i have real estate investments in the two countries.

Lucasbalo:
I am not into money laundering. I work for a big investment firm with offices in all continents of the world including Africa where my firm hqtrs is based in Johannesburg. I frequent S/A and Nigeria a lots and I real estate investment in the two countries.

Can we partner with you. . abi you wan employ us ni We are like 500 precisely

[quolte author=mistabiola post=35386800]

Can we partner with you. . abi you wan employ us ni We are like 500 precisely [/quote]You are doing quite well. You're a very intelligent guy. Wishing you the best. It's about 2.13am and about to kick the sack here.