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.”

READ MORE

NAIRA FX

Naira weakens further as FX turnover declines by 70.95%

by with No Comment Businessfinance

Nigeria’s currency, Naira on Wednesday weakened further by 0.12 percent following strong demand for and shortage of dollars at the Investors and Exporters (I&E) Forex window. (FX)

READ ALSO: Jobberman to develop Nigeria’s e-commerce sector through behavioral profiling

The foreign exchange daily turnover declined significantly by 70.96 percent to $11.85 million on Wednesday compared with $40.80 million recorded on Tuesday.

Consequently, after trading on Wednesday naira/dollar exchange rate closed at N411.00k as against N410.50k quoted on the previous day at the FX I&E window, data from the FMDQ showed.

Currency traders who participated in the trading on Wednesday maintained bids at between N405.00k and N438.00k/$.

Exchange rate remained flat at N485 at the Bureau De Change (BDC) segment of the foreign exchange market and the parallel market.

Read Also: Improved forex inflow strengthens naira

At the money market, the Nigeria treasury bills secondary market closed on a flat note on Wednesday, with the average yield across the curve remaining unchanged at 3.97 percent, according to a report by FSDH research. Average yields across short-term, medium-term, and long-term maturities closed at 2.40 percent, 3.30 percent, and 5.46 percent, respectively.

The Overnight (O/N) rate decreased by 0.25 percent to close at 13.50 percent on Wednesday as against the last close of 13.75 percent on Tuesday, and the Open Buy Back (OBB) rate decreased by 0.83 percent to close at 12.67 percent from 13.50 percent on the previous day. FX

“We expect money market rates to remain at elevated levels due to a possible OMO auction by the CBN,” analysts at FSDH said.

In the Open Market Operation (OMO) bills market, the average yield across the curve increased by 13 bps to close at 6.46 percent on Wednesday as against the last close of 6.33 percent the previous day.

Selling pressure was seen across medium-term and long-term maturities with average yields rising by 22 bps and 13 bps, respectively. However, the average yield across short-term maturities closed flat at 4.20 percent.

Yields on 15 bills advanced with the 28-Sep-21 maturity bill registering the highest yield increase of 62 bps, while yields on 11 bills remained unchanged.

The Debt Management Office (DMO) has released its FGN Bonds Issuance Calendar for the second quarter of 2021, indicating plans to raise funds in the range of N450 billion-N540 billion to finance the budget deficit over the next three months.

Furthermore, the DMO is expected to offer bonds during the quarter through re-opening of 10-year (N150 billion – N180 billion), 15-year (N150 billion – N180 billion), 25-year (N100 billion – N120 billion), and 30-year (N50 billion – N60 billion) tenors.

FGN bonds secondary market closed on a mildly negative note on Wednesday as the average bond yield across the curve cleared higher by 3 bps to close at 6.80 percent from 6.77 percent on the previous day.

Naira FX

READ MORE

Naira dollar

Naira gains 0.21% at investors window amid low dollar supply

by with No Comment financeNews

Nigeria’s currency, Naira, on Monday gained 0.21 percent in its value against the dollar, which closed at N409.13k compared to N410.00k closed on Friday at the Investors and Exporters (I&E) forex window.

READ ALSO: N538bn ports revenue shows private sector can generate more for govt

The naira appreciation was attributed to moderation in the demand for the dollars by the end users who buy to meet their import obligations.

Currency traders who participated in the trading on Monday maintained bids at between N400.00k and N410.50k/$, data from the FMDQ show.

The daily foreign exchange market turnover declined by 57.42 percent to $30.84 million on Monday from $72.43 million recorded on Friday.

Exchange rate remained flat at N485 at the Bureau De Change (BDC) segment of the foreign exchange market and the parallel market.

The money market on Monday, the Nigeria Treasury Bills secondary market closed on a flat note, with the average yield across the curve remaining unchanged at 4.22 percent, according to a report by FSDH Research. Average yields across short-term, medium-term, and long-term maturities closed at 2.47 percent, 3.95 percent, and 5.34 percent, respectively.

In the Open Market Operation (OMO) bills market, the average yield across the curve decreased by 6 bps to close at 6.49 percent on Monday as against the last close of 6.55 percent. Buying interest was seen across long-term maturities with average yield declining by 8 bps.

However, the average yields across short-term and medium-term maturities remained unchanged at 4.21 percent and 5.86 percent, respectively.

Yields on 13 bills compressed with the 12-Oct-21 maturity bill recording the highest yield decline of 32 bps, while yields on 12 bills remained unchanged.

READ MORE

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.

READ MORE

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.

READ MORE