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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 Resumes Sales Of Dollars To Nigerian Students, SMEs

 

CBN has resumed the sales of US dollars to Nigerian students in foreign schools, SMEs for important usage.

 

The Central Bank of Nigeria revealed the body has resumed sales of dollars to Nigerian students who study abroad and need to pay their school fees. This also applies to Small-Medium Enterprises who really needs foreign exchange for essential imports.

 

The statement reads;

“In view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria.

The Central Bank of Nigeria (CBN) has resumed provision of foreign exchange to all commercial banks for onward sales to parents wishing to pay school feels and students and SMEs wishing to make essential imports needed to revamp economic activities across the country.

In particular, the CBN is resuming the provision of over USD$ 100 per week for both categories.”

“There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.”

Meanwhile, the CBN said it has intensified its surveillance efforts in a bid to detect the activities of market speculators, Forex smugglers, and illegal users. Those found guilty will be prosecuted and receive the penalty for his/her crimes committed without wasting time.

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3 Nigerian Banks Lower Dollar Spending Limit On Debit Cards

 

Three Nigerian Banks has reduced the monthly Dollar spending limit on debit cards due to the falling of cruide oil price and the suffering of Naira against Dollar.

In response to the decline in dollar supply as well as rising demand, some banks, namely GTBank, Zenith, Fidelity reduced the monthly dollar spending limit on debit their cards.

However, Zenith Bank reduced monthly limits to $1,000 and Guaranty Trust Bank reduced monthly limits to $500. Fidelity Bank on its part reduced monthly limits to $1,000 from $3,000.

Other banks may follow their steps very soon.

In addition to Covid-19 Pandemic rattling effect on the foreign exchange and fixed income markets, this pandemic has also caused massive disruption in banking services, as banks implement social distancing rules, in a bid to battle the spread of deadly Coronavirus.

The banking service was also reduced to skeletal operations in across the country, with transactions restricted to electronic payment channels and ATMs for cash withdrawals.

For example, from the third week in March and prior to the lockdown of Lagos, Ogun States and Abuja, most banks directed non essential staff to work home.

Meanwhile, Banks also restricted the number of customers allowed inside the banking halls per time to 25 people, leading to massive crowds outside banking halls with customers spending more time to gain entry into the banking hall.

The lockdown in Lagos, Ogun and Abuja has led the CBN to suspend cheque clearing activities till further notice.

 

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