Naira Dollar Forex

CBN To Sanction Dealers Who Reject Old, Lower Dollar Notes

by with No Comment Uncategorized

The Central Bank of Nigeria, CBN, has said it will sanction foreign exchange dealers that reject old and lower denominations of the dollar notes.

READ ALSO: FG to support MSMEs contribution to economy to boost development – Minister

It gave the warning on Tuesday in a circular to all Deposit Money Banks, Bureau De Change Operators and the general public signed by the Director, Currency Operations Department, CBN, Ahmed Umar, titled ‘The rejection of old, lower denomination of United States dollar by DMBs/ forex dealers’.

The circular read, “The Central Bank of Nigeria has in recent times been inundated with complaints from members of the public on the rejection of old/lower denominations of the US dollar bills by Deposit Money Banks and other authorized forex deals.

“All DMBs/authorized Forex dealers should henceforth accept both old series and lower denominations of the United States dollars that are legal tender for deposit from their customers.

“The CBN will not hesitate to sanction any DMB or other authorised forex dealers who refuse to accept old/ lower denominations of US dollar bills form their customers.

“In addition, all authorised forex dealers are advised to desist from defacing/stamping US dollar banknotes as such notes always fail authentication test during processing/sorting.”

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Liquidity Naira

Liquidity rises, external reserves grow but naira falls

by with No Comment Businessfinance

Nigeria’s currency, Naira, on Thursday weakened against the dollar despite increased liquidity and growing external reserves.

READ ALSO: Agricultural Development Fund is Coming.

After trading on Thursday, the foreign exchange market closed with Naira losing 0.24 percent to the dollar at N409.75k compared to N408.75k closed on Wednesday at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

The Naira depreciation was attributed to strong demand for dollars by the end users to meet their import obligations.

Currency traders who participated in the trading on Thursday maintained bids at between N393.00k and N411.40k/$.

The daily foreign exchange market turnover rose significantly by 394.36 percent to $171.84 million on Thursday from $34.76 million recorded on Wednesday.

Nigeria’s external reserves grew by 0.61 percent to $34.62 billion as at March 24, 2021 from $34.41 billion as of March 18, 2021 according to data obtained from the Central Bank of Nigeria (CBN)’s website.

At the end of the Monetary Policy Committee (MPC) meeting on Tuesday, Godwin Emefiele, governor of the CBN noted the committee’s satisfaction over the improvement in the level of external reserves, which he said stood at US$36.46 billion at end-February 2021, compared with US$34.94 billion at end-January 2021.

This, he said reflects the recent upsurge in crude oil prices on the backdrop of the renewed optimism on the successful deployment of COVID-19 vaccines across the globe.

At the black market and Bureau De Change (BDC) segment of the foreign exchange market, Naira remained unchanged on Thursday at N485 and N486 per dollar, respectively.

The Nigerian Treasury Bills secondary market closed on a negative note on Thursday with average yield across the curve increasing by 14 bps to close at 4.04 percent from 3.90 percent on the previous day, according to a report by FSDH research.

Average yield across the medium-term maturities expanded by 47 bps. However, the average yields across short-term and long-term maturities closed flat at 2.06 percent and 5.32 percent, respectively.

Yields on 6 bills advanced with the 16-Sep-21 maturity bill recording the highest yield increase of 75 bps, while yields on 14 bills remained unchanged.

The Overnight (O/N) rate increased by 1.75 percent to close at 15.75 percent on Thursday as against the last close of 14.00 percent on Wednesday, and the Open Buy Back (OBB) rate increased by 2.00 percent to close at 15.50 percent from 13.50 percent on the previous day.

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Diaspora Investment

Nigeria to reward every diaspora dollar inflow with N5

by with No Comment financeNews

Nigeria will reward every diaspora dollar inflow with five Naira additional payment as the country seeks to maximise foreign exchange flows from its citizens abroad.

READ ALSO: Govt. Cushioning the Effects of COVID-19 on MSMEs

According to a statement by the central bank, recipients of diaspora flows who use formal channels to get U.S. dollars from abroad, will be paid N5 fir every dollar received and this will be on top of proceeds of the cash sent.

It is the latest move by authorities to increase the flow of remittances amid a shortage of hard currency.

Recipients will get 5 naira for every $1 they remit through licensed international money transfer operators and commercial banks, the central bank said.

The program will run from March 8 till May 8.

The West African nation’s currency has been devalued twice since March last year after a sharp drop in oil sales and remittances from workers abroad led to a shortage of dollars.

Measures by the central bank to bolster inflows and a rebound in oil prices could reduce pressure on the currency, which last traded at 411 per dollar at the exchange platform for investors and exporters known as Nafex.

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Dollar Bill

What to expect of CBN “naira for dollar” scheme

by with No Comment financeNews

What to expect as CBN’s naira for dollar scheme begins
Starting today, March 8, Nigerians who use formal channels to receive dollars from abroad will get 5 naira extra for every $1 they remit through licensed international money transfer operators and commercial banks.

READ ALSO: High demand for OMO bills as yields top 10%

The program will initially run for 60 days, according to the CBN, which is betting on the move to improve dollar liquidity in the official window.
Based on the policy, Deposit Money Banks reached out to their customers on Sunday telling them that N5 would be given for every dollar received by the customers.

Nigeria is turning its attention to diaspora remittances as it seeks to boost dollar inflows into the country after a difficult past year that saw dollar flows dry up on the back of lower oil exports, causing shortages of the greenback.

In December 2020, the CBN also unveiled new rules on remittances allowing people getting cash from friends or family abroad to be paid in US dollars. This marked a divergence from the usual practice of paying in naira which discouraged diaspora inflows via official channels.
Economists say the latest incentive by the CBN to boost diaspora inflows could indeed help direct some dollars through the official channel and ease the pressure on the naira which last traded at N411 per dollar at the investors and exporters window.
The big question on the minds of analysts is the cost implication of the scheme.

New week, old worries for equities
Bearish sentiments again dominated the Nigerian equities market last week, dragging the All Share Index to its fifth consecutive negative close.
The NSEASI shed 1.18% WoW to 39,331.61pts, while the year-to-date return sunk deeper into negative territory, settling at -2.33%.
All sectoral indices closed negative with the exception of the Insurance index which climbed 1.39 percent. MORISON (+20.00%) topped the gainers’ chart, while CHAMPION shed -33.33% to emerge as the week’s biggest loser.
As yields in the fixed income market continue to rise, the equities market is expected to continue to see outflows.
It remains to be seen however if the ongoing corporate earnings season can swing sentiments in favour of embattled stocks.

Mixed corporate earnings
A number of audited financial results were released last week, with mixed performance across board. While Dangote Sugar recorded strong top and bottom-line growth (+33.03% and +33.16% respectively), Ardova Plc managed to grow its revenues (+2.90%), although after-tax profit dipped by 47.30% compared to last year. SEPLAT, on the other hand, recorded declines in both top and bottom-line.
MTN Nigeria also released its 2020 audited financial statements that showed an 8.5 percent increase in operating profits to N426.73 billion, as data revenues surged by 51 percent to N332.37 billion.
This week will see more corporate results and there are expectations that the financial performance of companies in 2020 will reflect the impact of the pandemic on the economy which slipped into a second recession in five years last year.

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