Economy
Banks to Begin Dollar Loans as Naira Soars
By Modupe Gbadeyanka
There are strong indications that Deposit Money Banks (DMBs) in the country will soon begin to raise Dollar-denominated loans, particularly Eurobonds, as the Naira keeps on increasing in value.
Punch gathered that banks were currently positively arranged to raise Dollar loans taking after the making of the Investor and Exporters FX window by the Central Bank of Nigeria (CBN) and the subsequent appreciation of the Naira.
Another reason the banks are thinking about Eurobonds, according to top banking sources, is on the grounds that some of them are taking a look at re-negotiating their dollar loans, which will soon begin falling due.
The top bank official stated, “Many banks must choose between limited options than to raise dollar loans or Eurobonds incompletely to re-negotiate their Eurobonds falling due, or to exploit the gratefulness in the naira value to raise dollar funding.”
While Guaranty Trust Bank Plc’s $400m Eurobond is expected in November, Fidelity Bank Plc’s $300m is expected next May. Access Bank Plc has $350m of bonds due in July.
GTBank has said it has no arrangements to issue new Eurobonds, yet Fidelity Bank and Access Bank presently can’t seem to choose.
Monetary and financial expert concur that the banks will begin to raise dollar-denominated loans.
All things being equal, more banks will issue Eurobonds in light of the fact that they require dollars to offer advances in the United States cash or to repay debt, an investigator at Vetiva Capital Management Limited, Mr Lekan Olabode, told Bloomberg, including that more banks would issue Eurobonds, in light of the fact that they required dollars to offer loans and to repay debt.
As of now, Ecobank Transnational Incorporated has said it is wanting to raise $400m five-year convertible security this month to renegotiate debt and provide short-term bridge funding to non-performing loans at its Nigerian unit.
Experts trust more banks will raise dollar credits this year and next year.
Officially, United Bank for Africa Plc has brought $500 million up in its first Eurobond deal.
It issued the bond on June 1. This took a comparable issue seven days prior by Zenith Bank Plc in an arrangement that was four times oversubscribed.
It is hard on putting a figure to what the normal dollar loans will be yet analyst trust that as the I and E FX window keeps on enhancing, more banks will exploit to raise additional dollar loans.
The CBN on Thursday said its currency window for investors had dealt with $2.2bn of exchange a month and a half.
It likewise said it represented just about 30 percent of the $2.2bn exchanges, adding this was intended to keep the window working.
The CBN had around 6 weeks back made the Investors and Exporters FX Window to attract foreign investors and at the same time maintain a strong currency to ward off inflation.
Experts have praised the activity as a stage in the correct direction.
In any case, some few experts, including a former Governor of the CBN, Prof Charles Soludo, said despite the fact that the activity, among others taken by the controller lately, had propelled the forex showcase by 10 stages, there was a need to find a way to get the economy to where it should be.
Source: Punch
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices gained more than 3 per cent on Friday, after comments by US President Donald Trump and Iran’s foreign minister further dented hopes of a deal.
Brent crude settled at $109.26 a barrel after chalking up $3.54 or 3.35 per cent, and the US West Texas Intermediate (WTI) finished at $105.42 a barrel, up $4.25 or 4.2 per cent. Over the week, Brent has climbed 7.84 per cent and WTI 10.48 per cent on uncertainty over the shaky ceasefire in the Iran war.
President Trump said he was running out of patience with Iran and has agreed with Chinese President Xi Jinping that the Middle East nation cannot be allowed to have a nuclear weapon and must reopen the Strait of Hormuz, which is the waterway where about a fifth of the world’s oil and liquefied natural gas normally passes.
On his part, Iran’s Foreign Minister Abbas Araqchi said on Friday that it does not trust the US and is interested in negotiating only if the US is serious, adding that Iran is prepared to go back to fighting but also prepared for diplomatic solutions.
On the US-China front, while the Chinese President did not directly make a comment on Iran, a statement from the foreign ministry spoke out against the conflict.
Among the deals the market was looking for from the US-China summit, President Trump said China wants to buy oil from the US, also saying he could lift sanctions on Chinese companies that buy Iranian oil.
Iran’s Revolutionary Guards said 30 vessels had crossed the strait between Wednesday evening and Thursday, far from 140 a day that was typical before the war. Two of the 30 vessels that reportedly cleared the Strait of Hormuz earlier this week were tankers, one en route to Japan and the other headed to China.
A prolonged closure of the Strait of Hormuz points toward tighter physical markets, potential refined product shortages, and upward pressure on prices in the coming weeks and months.
Even though the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) announced production increases in recent weeks, traders saw little immediate benefit because many barrels still cannot move efficiently through the Gulf region.
By Adedapo Adesanya
Nigeria received its first credit rating upgrade since 2012 from S&P Global Ratings, driven by improved oil market conditions and the country’s growing ability to refine and export crude locally.
The credit ratings agency upgraded the country’s rating by one notch to B, five levels below investment grade, according to a statement on Friday.
It raised its long-term foreign and local currency sovereign credit ratings on Nigeria to ‘B’ from ‘B-‘ and affirmed its ‘B’ short-term ratings. It also raised its long- and short-term Nigeria national scale ratings on the sovereign to ‘ngA+/ngA-1’ from ‘ngBBB+/ngA-2’.
S&P also cited Nigeria’s decision to liberalise the exchange rate as crucial to the development, and changed the outlook to stable.
The decision also comes as the federal government ruled out the reintroduction of subsidies on refined petroleum products, in order to avoid a return to larger budgetary deficits and drains on foreign currency (FX) liquidity.
S&P projected the general government deficit will widen to over 4 per cent of GDP on average during 2026 and 2027, a year of a general election.
It added that the implementation of reforms to broaden the tax base from very narrow levels is underpinning a steady decline in Nigeria’s debt-to-revenue ratio to 338 per cent in 2026 versus 500 per cent in 2023.
The agency said it could raise ratings over the next two years if fiscal outcomes improve significantly, either due to fiscal consolidation or structurally higher revenue, resulting in lower debt service costs.
It, however, warned that it could also lower the ratings if the implementation of Nigeria’s reform programme, particularly the series of critical steps taken to liberalise the exchange rate in 2023, reverses.
On the oil production forecast, S&P expects 2026 production to average approximately 1.66 million barrels per day, including condensates.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn