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Naira Gains 9.3% At Parallel Market (See New Rate)
Naira vs Dollar

 

Nigerian currency, Naira has gained 9.3% as it strengthened to N435 to a dollar at the parallel market yesterday. This is against about N480 to a dollar it had been trading in the past days.

However, this showed a gain of N45, representing about 9.3% rise.

Currency dealers attributed the development to the planned resumption of forex sales by the Central Bank of Nigeria (CBN) to operators of Bureau De Change (BDC), which according to them is expected to bolster dollar liquidity in the market.

Meanwhile, The apex bank on Monday, is expected to resume forex sales to BDCs on Monday.

The bank had announced its intention to resume forex sales to the retail segment of the market. It was forced to postpone it because of the extension of the date for resumption of international flights to September 5.

 

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Finance Naija gathered that, the President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said the announcement of the plan to resume forex sales to the currency dealers was the major factor that led to the gain recorded by the nation’s currency against the greenback.

Aminu said:

The plan to resume forex sales to BDCs was what broke the camel’s back. Dollar supply to BDCs is a potent weapon to fight against speculation.

For those still speculating in the market, they are already burning their fingers and taking losses.

“So, my advice is that when you don’t have a genuine and effective need to use dollars, stop stockpiling the currency.

 

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From what we are seeing, this trajectory is going to continue and I advise members of the public to always buy when you have a purpose for it and not buying to keep.

“What we saw in the market in the past few weeks was not a true reflection of the value of the naira against the dollar.

We saw, even during the lockdown when flights were not flying, everybody literally became a forex dealer. It is unfortunate. That cannot happen in other countries.

When you don’t need to make payments abroad, what are you hoarding dollars for? It’s unfortunate.

 

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CBN Sets Exchange Rate At N386/$1 On Parallel Market

The Central Bank Of Nigeria (CBN) has set the exchange rate at N386 per $1 On Parallel Market as Dollar Sales Commence On Monday.

 

The Central Bank of Nigeria, CBN, on Thursday, in restarting forex trade, directed licensed bureaux de change, BDC, operators to sell dollars to customers at a rate not higher than N386 to the dollar.

This came as the Federal Government, Thursday, said despite the N2.3 trillion Economic Stimulus Plan put in place to contain impact of the Coronavirus (COVID-19) pandemic on the economy, there is the possibility that the third quarter, 2020 (Q3’20) Gross Domestic Product, GDP, growth rate will be negative, while the economy will relapse into a recession.

The apex bank in a circular by the Director, Trade and Exchange Department, O. S. Nnaji, said the directive would take effect on Monday.

 

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According to Nnaji,

As part of efforts to enhance accessibility to foreign exchange, particularly to travellers, following the announcement of the limited resumption of international flights by the Minister of Aviation, commencing with Abuja and Lagos, the CBN, hereby, wishes to inform the general public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from August 31.

“Please, be advised that the application exchange rate for the disbursement of proceeds of IMTOs for the period, Monday, August 31, to Friday, September 4, as follows:

“IMTOs to banks N382/1USD; Banks to CBN N383/1USD; CBN to BDCs N384/1USD; BDCs to end users, not more than N386/1USD; volume of sale for each market is USD 10,000 per BDC.”

 

Source: Vanguard

 

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CBN Extends Minimum Capital Requirement Deadlines For MFBs

Central Bank of Nigeria, CBN, has extended the deadlines for compliance with the revised minimum capital requirements for Microfinance Banks. 

 

CBN has considered the impact of the Covid-19 pandemic on general economic activities to extend the deadlines for compliance with the minimum capital requirements for Microfinance Banks (MFBs) in Nigeria.

 

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The circular reads;

Consequently, the CBN has extended the deadlines for compliance with the revised minimum capital requirements for all categories of MFBs by one year as follows:

1) MFBs operating in rural, unbanked and under banked areas (Tier 2) shall meet      the N35 million capital threshold by April 2021 and N50 million by April 2022:

2) MFBs operating in urban and high density banked areas (Tier 1) are expected to meet the N100 million capital threshold by April 2021 and N200million by April 2022;

3) State MFBs shall increase their capital to N500 million by April 2021 and N1billion by April 2022; and

4) National MFBs are expected to meet minimum capital of N3.5 billion capital by April 2021 and N65 billion by April 2022.

 

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How To Apply For CBN 50B Loan For COVID-19 Intervention

The Central Bank of Nigeria (CBN) has launched a Covid-19 Intervention loan of N50 Billion to support Nigerians and Businesses, see how to apply.

 

COVID-19 intervention loan.

In line with the ongoing world deadliest pandemic of our time, citing damages and losses suffered by businesses and lockdown has led the Central Bank of Nigeria (CBN) to rolled out a loan aimed at ameliorating the effect on businesses.

The CBN has introduced a N50b Targeted Credit Facility as a stimulus package to support households and Micro, Small and Medium Enterprises affected by the COVID-19 pandemic, and guidelines to access the funds.

However, The Central Bank of Nigeria says interested stakeholders must meet its set criteria to access the N50bn intervention loan for small and medium businesses.

 

How To Apply For COVID-19 Intervention Loan

Eligible households or MSMEs; shall submit applications directly to NIRSAL Microfinance Bank; and the application must, among others, contain;

  • BVN number
  • Business registration (where applicable)
  • Business plan with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic.

 

NMFB shall appraise and conduct due diligence applications; upon satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval.

CBN will review the applications and gives final approval for disbursement to NMFB.

The bank stated that eligible participants for the COVID-19 intervention loan were households and existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic.

The enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 Pandemic.

Activities covered under the guidelines include; Agricultural value chain activities, Hospitality (accommodation and food services), Health (pharmaceuticals and medical supplies), Airline service providers, Manufacturing/value addition, trading, and any other income generating activities as may be prescribed by the CBN.

It stated that the eligible participating financial institution for the scheme is NIRSAL Microfinance Bank.

The CBN further revealed that the loan amount would be determined based on the activity, cashflow and industry/segment size of beneficiary, subject to a maximum of N25m for SMEs; and households could access a maximum of N3m.

It stated that working capital would be a maximum of 25 per cent of the average of the previous three years’ annual turnover (where the enterprise was not up to three years in operation, 25 per cent of the previous year’s turnover would suffice).

It added that interest rate under the intervention would be five per cent per annum (all inclusive) up to 28th February 2021 and thereafter, the interest on the facility would revert to nine per cent (all inclusive) as from 1st March 2021.

The regulator stated that working capital would be for a maximum period of one year, with no option for rollover, while term loan would have a maximum tenor of not more than three years with, at least, one year moratorium.

It stated that the collateral to be pledged by beneficiaries under the COVID-19 intervention loan must be acceptable by NIRSAL MFB, but may include any one or more of others which are moveable assets duly registered on the National Collateral Registry; simple deposit of title documents, in perfectible state; and deed of debenture (for stocks), in perfectible state.

Others were irrevocable domiciliation of proceeds; two acceptable guarantors; personal guarantee of the promoter of the business; life insurance of the key-man, with NMFB noted as the first loss payee; and comprehensive insurance over the asset.

Source: Punch NG

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