Connect with us

Economy

Abuja BDC Operators Admit Speculators Crumbled Naira to N700/$1

Published

on

Abuja BDC operators

By Dipo Olowookere

Representatives of Bureaux de Change (BDC) operators in the Federal Capital Territory (FCT) Abuja have admitted that speculative activities of some of its members caused the crumbling of the Nigerian Naira to more than N700 to a Dollar at the parallel market segment of the foreign exchange (forex) market recently.

Last month, the indigenous legal tender sank to its lowest level by exchanging to the United States Dollar at N715/$1 in the unofficial FX segment.

This followed statements made by the governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, in Abuja after the Monetary Policy Committee (MPC) meeting.

After announcing the raising of the baseline interest rate in the country to 14.00 per cent, the apex bank chief said security operatives would begin to go after people withdrawing their Naira from banks with the purpose of hedging against the Dollar.

This triggered a panic in the financial system and investors and others started to liquidate their Naira holdings to buy the Dollar. With the country experiencing a shortage in the supply of Dollars, the local currency came under pressure, falling to an all-time low.

Worried that the Naira may eventually crumble, the Senate summoned Mr Emefiele and it was after this action of the lawmakers that officials of the Economic and Financial Crimes Commission (EFCC) began to raid some currency hawkers across major cities of the federation.

The arrest of FX traders on the streets eased the pressure on the local currency and last week, the Nigerian currency gained against the greenback and was sold at N638/$1 at a point.

On Friday, some Abuja BDC operators held a meeting with the chairman of the EFCC, Mr Abdulrasheed Bawa, in Abuja and during the gathering, they admitted that some speculators among them were behind the crashing of the Naira at the black market.

However, they promised to work in partnership with the agency to clean up the market, expressing optimism that the Naira’s rebound, which began after the EFCC’s intervention a few days ago, may eventually see the currency return to its pre-speculation value.

On his part, Mr Bawa said his meeting with forex traders was part of ongoing efforts to check the rising incidence of FX speculation which has brought pressure on the value of the Naira.

The EFCC boss said he wants to fashion out a collaborative stakeholders’ response to brazen forex speculation, especially in the parallel market which is hurting the country’s monetary policy by instigating a run on the value of the Naira.

According to him, similar meetings are planned for other BDC operators in the major commercial cities across Nigeria as well as with key players, regulators and operators of the Nigerian financial sector.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Economy

Naira Falls at Official Market, Gains at Unofficial FX Windows

Published

on

Official FX Market

By Adedapo Adesanya

The Naira continued its roller coaster ride at the foreign exchange (FX) segments in Nigeria on Thursday, depreciating at the Investors and Exporters (I&E) window and appreciating at the Peer-to-Peer (P2P) and parallel market windows.

In the official market, the Naira lost 53 Kobo or 0.12 per cent against the United States Dollar to settle at N445.83/$1 compared with the previous day’s value of N445.83/$1.

The local currency reported the fall despite the value of FX transactions going down during the session. Data showed that the turnover for the day stood at $99.50 million, 43.9 per cent or $77.94 million lower than the $177.44 million published on Wednesday.

In the interbank segment of the forex market, the domestic currency closed flat against the Pound Sterling and the Euro yesterday at N534.67/£1 and N461.79/€1, respectively.

However, in the P2P window, the Nigerian currency appreciated against its American counterpart by N4 to close at N762/$1, in contrast to the N766/$1 it was traded on Wednesday.

In the black market, which is an unofficial FX segment just like the P2P, the Nigerian Naira appreciated against the US Dollar yesterday by N5 to trade at N745/$1.

As for the digital currency market, there was a negative movement across the 10 tokens tracked by Business Post, with Dogecoin (DOGE) recording the heaviest fall, 4.1 per cent, to sell at $0.0990.

Solana (SOL) recorded a 2.9 per cent slump to trade at $13.56, Ripple (XRP) dipped by 2.6 per cent to quote at $0.3892, and Binance Coin (BNB) slid by 2.5 per cent to settle at $288.59.

Further, Bitcoin (BTC) fell by 0.9 per cent to close at $16,941.89, Cardano (ADA) depreciated by 0.7 per cent to finish at $0.3135, Ethereum (ETH) saw a 0.6 per cent depreciation to trade at $1,273.75, and Litecoin (LTC) went down by 0.4 per cent to close at $76.50.

However, the value of the US Dollar Tether (USDT) and the Binance USD (BUSD) remained unchanged during the session at $1.00 each.

Continue Reading

Economy

Oil Trades Mixed on Weaker Dollar, China COVID-19 Curbs

Published

on

Worsening Oil Demand

By Adedapo Adesanya

The crude oil market traded mixed on Thursday, retreating from an early rally built on weakness in the US Dollar and hopes for improved fuel demand in China after COVID-19 curbs were eased in two major Chinese cities.

Brent crude futures settled 9 cents lower at $86.88 a barrel, while the US West Texas Intermediate (WTI) crude futures settled 67 cents higher at $81.22 a barrel.

The shift in China’s zero-COVID strategy raised optimism about a recovery in oil demand there. The cities of Guangzhou and Chongqing announced an easing of COVID curbs on Wednesday.

Demonstrations in the world’s largest oil importer, which spread over the weekend to Shanghai, Beijing and elsewhere, have become a show of public defiance unprecedented since President Xi Jinping came to power in 2012.

The southwestern city of Chongqing will allow close contact with people with COVID-19 who meet certain conditions to quarantine at home.

Guangzhou, near Hong Kong, also announced an easing of curbs, but with record numbers of cases nationwide, there seems little prospect of a major reversal in the zero-COVID policy.

Oil was however supported through most of Thursday’s session by a slump in the dollar index to its lowest since August after the US Federal Reserve Chair Jerome Powell said rate hikes could slow this month.

A weaker dollar makes oil cheaper for other currency holders.

The greenback dipped to 16-week lows against a basket of major currencies on Thursday after data showed that US consumer spending increased solidly in October while inflation moderated, adding to expectations that the Federal Reserve is closer to reaching a peak in interest rates.

Mr Powell said on Wednesday that it was time to slow rate hikes, noting that slowing down at this point is a good way to balance the risks.

The prospect of a lower price cap on Russian oil is also lending support, analysts said. European Union governments tentatively agreed on Thursday on a $60 cap on Russian sea-borne oil.

Meanwhile, the market will await what the meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and allies, OPEC+, will bring come December 4, although a policy change is seen as unlikely.

“OPEC+ would rather sit on the bench at this time and assess the outcome of what happens on Monday,” an unnamed source told the news agency, Reuters, this week.

OPEC also made a meeting of its ministers planned for Saturday a virtual gathering, and OPEC+ cancelled a meeting of oil market experts, the Joint Technical Committee, that had been scheduled for Friday.

Continue Reading

Economy

Honeywell Flour, MTN, Others Pull Market Back by 0.01%

Published

on

Honeywell Flour

By Dipo Olowookere

The depreciation printed by the shares of Honeywell Flour, MTN Nigeria, Ecobank and 10 others pulled back the Nigerian Exchange (NGX) Limited from the bulls’ territory into the danger zone by 0.01 per cent on Thursday.

It was the first trading session in December, and the stock market could not sustain the positive moment it recorded on the last day of the previous month due to the selling pressure on the equities mentioned above, though investor sentiment remained strong.

According to data from the bourse, the market breadth was positive yesterday as there were 15 price advancers and 13 price decliners led by Honeywell Flour, which dropped 7.89 per cent to trade at N2.10. RT Briscoe went down by 7.41 per cent to 25 Kobo, Wema Bank declined by 5.45 per cent to N3.12, FCMB contracted by 4.18 per cent to N3.21, and Cutix retreated by 2.84 per cent to N2.05.

On top of the gainers’ log was UPDC REIT, which improved its share value by 9.09 per cent to N3.00, McNichols rose by 8.93 per cent to 61 Kobo, Japaul jumped by 7.41 per cent to 29 Kobo, Nigerian Breweries 7.14 per cent to N45.00, and Royal Exchange grew by 4.76 per cent to 66 Kobo.

Yesterday, investors transacted 172.9 million shares valued at N2.8 billion in 3,073 deals compared with the 107.0 million shares valued at N1.3 billion traded in 3,227 deals in the midweek session, representing a decline in the number of deals by 4.77 per cent, an increase in the trading volume by 61.55 per cent, and a surge in the trading value by 115.63 per cent.

The increase in the market turnover was driven by the 49.8 million shares of FCMB traded by investors during the session. Courteville traded 16.9 million stocks, Access Holdings sold 12.0 million equities, UBA traded 10.8 million shares, and Zenith Bank exchanged 9.8 million shares.

Business Post reports that the insurance and energy counters went down by 0.12 per cent and 0.08 per cent, respectively, while the banking and consumer goods sectors went up by 2.16 per cent and 0.77 per cent apiece, with the industrial goods space closing flat.

At the close of trades, the All-Share Index (ASI) receded by 3.40 points to 47,656.64 points from 47,660.04 points, and the market capitalisation retreated by N2 billion to N25.957 trillion from N25.959 trillion.

Continue Reading
%d bloggers like this: