Parallel Market Accounts for 5% of FX Market Share—CBN Governor

Image

By Dipo Olowookere

Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has claimed that the parallel segment of the foreign exchange (FX) market only accounts for 5 per cent of the total market share.

Mr Emefiele made this claim in Abuja on Tuesday while reacting to a question on the value of the Naira on the black market, which stands at over N480/$1.

According to him, the parallel market is an illegal market, wondering why analysts, who he said should know better, are quoting rates from the segment as the standard exchange rate for the local currency.

The former GMD of the Zenith Bank described the black market as a trading system that encourages corruption and corrupt practises, noting that the value of the Naira to the United States Dollar should be quoted from the approved windows; the interbank, Investors and Exporters (I&E) and the Bureaux De Change (BDC) segments.

“I heard some analysts talking about the parallel market saying that the exchange rate is at N480. I want to say this, it is unfortunate and really unfair that even analysts who are supposed to know will play with numbers and begin to determine the exchange rate of our currency using parallel market rate.

“For the information of everybody, parallel market as far as we know it and the data that we have is a shallow market in Nigeria with no more than 5 per cent of market share.

“Parallel market and quote me is a tainted market in Nigeria, where people who desire to deal in illegal foreign exchange transactions including sourcing of FX cash for purposes of offering bribes, corruption, that is where they deal,” the apex bank chief said.

The central bank has not hidden its intention to close the wide gap between the official exchange rate and the parallel market rate. However, all its efforts seem not to yield the needed results.

One of the factors responsible for this could be the various policies put in place by the CBN for the sourcing of FX by customers.

For example, many items have received forex ban, giving those in need of FX to complete their transactions to seek alternative, which is always the black market.

Even for the approval transactions like the BTAs and others, customers have complained of the difficulty in getting forex from banks and the BDC operators because of limits placed by the authorised dealers. This has made the parallel market to thrive and further raised the value of the Dollar higher over the Naira because of the huge demand for the foreign currency.

Share
Related Stories
Image
08-December-2023

NASD OTC Exchange Extends Rally by 0.55%

By Adedapo Adesanya The NASD Over-the-Counter (OTC) Securities Exchange recorded a further rise of 0.55 per cent, extending its stay in the green territory to a fourth straight session on Thursday, November 7. This increased the NASD Unlisted Security Index (NSI) by 4.81 points to wrap the session at 872.54 points compared with 867.73 points in the previous session, as the market capitalisation of the OTC exchange jumped by N6.52 billion to settle at N1.182 trillion, in contrast to the preceding trading day’s N1.176 trillion. The unlisted securities market ended the trading session with two price gainers, 11 Plc and

Image
09-December-2023

Nigerian Exchange Rises 0.12% Amid Weak Investor Sentiment

By Dipo Olowookere A 0.12 per cent appreciation was recorded by the Nigerian Exchange (NGX) Limited on Friday, reversing the previous day’s losses triggered by profit-taking in the banking sector. Business Post reports that it was the same banking space that influenced the growth posted yesterday, rising by 1.60 per cent, supported by the consumer goods indices, which appreciated by 0.15 per cent. However, there were pockets of profit-taking during the last trading session of the week, with the insurance sector shedding 0.78 per cent, the industrial goods sector losing 0.65 per cent, and the energy counter declining by 0.57

Image
08-December-2023

Selling Pressure Weakens Nigerian Stock Market by 0.49%

By Dipo Olowookere The Nigerian Exchange (NGX) Limited depreciated by 0.49 per cent on Thursday, driven by selling pressure on banking equities, especially those in the tier-1 category. The likes of GTCO, FBN Holdings, Access Holdings witnessed sell-offs during the trading session, contributing to the weak investor sentiment observed at the Nigerian stock market. According to data obtained by Business Post, the NGX ended with 29 price losers and 24 price gainers, indicating a negative market breadth index. FBN Holdings ended as the heaviest price decliner after it shed 9.86 per cent to settle at N26.50, Secure Electronic Technology fell

Image
09-December-2023

Naira Crashes to N1,099.05/$1 at Official Market

By Adedapo Adesanya The Nigerian Naira weakened to a new low on the American Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, December 8, amid speculations that the Central Bank of Nigeria (CBN) has again devalued the local currency. In the previous trading session, there were reports that the exchange rate for clearing cargoes has been raised to N952/$1, sparking rumours that domestic currency would hit N1,000/$1 in the spot market. On the last trading session of the week, the Naira lost N255.98 or 30.4 per cent of its value on the greenback to trade at N1,099.05/$1

More Stories
Image
03-June-2020

Majek Fashek’s Death Huge Loss to Creative Industry—Minister

By Modupe Gbadeyanka The death of legendary Reggae musician, Majekodunmi Fasheke, otherwise known as Majek Fashek, has been described as a huge loss to the creative industry in Nigeria. The rain maker, as he was fondly called following his late 80s hit single, Send Down the Rain, breathed his last on Tuesday in New York, one of his most loved cities in the world, after a battle with an illness. While mourning him, the Minister of Information and Culture, Mr Lai Mohammed, said the demise of the global music icon has left a big hole in the showbiz sector, saying

Image
02-July-2018

How We Transformed Keystone Bank Under One Year–Ohiwerei

Mr Obeahon Ohiwerei is the Group Managing Director/CEO of one of the fastest growing financial institutions in Nigeria, Keystone Bank Limited. In this interview with International Banker Magazine, UK, the banking guru speaks on the achievements of the bank in the last few months since assuming office. In less than one year of AMCON’s divestment from Keystone Bank, the lender has experienced tremendous transformation in all ramifications. Aside revamping all its branches across the country and bolstering its workforce, it has invested substantially in technology and developed fully integrated service models that enable customers access banking services through a wide

Image
13-March-2018

Dubai Targets 35.5m Occupied Hotel Room Nights by 2019

By Dipo Olowookere Dubai’s diverse and vibrant hospitality sector is forecast to experience strong, sustained growth over the coming years, with occupied room nights set to reach 35.5 million annually in 2019, representing a robust 10.2 percent compound annual growth rate (CAGR) over the next 24 months. According to a comprehensive study of the market by Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism), the emirate’s room supply is set to reach 132,000 by the end of 2019, growing at a 2-year (2017-2019) CAGR of 11.1 percent. Meanwhile, occupancy levels are forecast to remain at an extremely healthy 76-78

Image
08-June-2020

Seplat Able to Withstand Low Oil Prices

By Modupe Gbadeyanka The ability of Seplat Petroleum Development Company Plc to remain strong in the face of falling crude oil prices at the global oil market has been reaffirmed. Seplat is a company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE). In recent times, the price of the company’s stock at the NSE had been declining, causing some shareholders to fret over it. Prices of crude oil have not been too positive this year due to the coronavirus disease pandemic, which caused decline in demand for the commodity. In April 2020, members of

Image
03-November-2023

Norrsken22 Raises $205m to Boost New Investment in Nigeria, Others

By Adedapo Adesanya Norrsken22, an Africa-focused venture capital firm, has received the backing of more than 30 unicorn founders and institutions to raise $205 million for new tech investments in Africa. Investments will largely be focused on startups in South Africa, Nigeria, Ghana, Kenya and Egypt. This is coming at a time when funding into startups has slowed due to macro conditions. The fund, dubbed the Norrsken22 African Tech Growth Fund, was supported by local and foreign unicorn founders, including Mr Olugbenga Agboola, co-founder and CEO of Flutterwave; Mr Niklas Zennström, co-founder Skype; Mr Jacob de Geer, co-founder iZettle; Mr

Image
15-March-2019

Sheraton Marks Transformation Milestone With New Logo

By Modupe Gbadeyanka Marriott International’s most global brand, Sheraton Hotels & Resorts, has continued its transformation journey with a nod to its timeless pioneering legacy, unveiling a new logo that pays homage to its past and depicts its vision for the future. The new design reflects the brand’s holistic vision for the future, making Sheraton the central gathering place of communities around the world, welcoming guests and locals into a public space that embodies the modern town square vibe. “The logo’s evolution reflects the renewed energy and firm commitment we are making to our owners and guests to the resurgence

Image
25-November-2021

Market Further Drops 0.02% as Investors Sell-off Honeywell in Panic

By Dipo Olowookere The Nigerian Exchange (NGX) Limited further depreciated by 0.02 per cent on Wednesday on the back of profit-taking in some equities, including Honeywell Flour Mills. The company closed the session as the heaviest price loser as some traders sold off their stake in a panic over news that Ecobank has warned the new buyers of the firm of an existing court case involving a huge debt. The boards of Honeywell Flour and Flour Mills of Nigeria, which is taking over the company, had to release statements to calm nerves. However, the damage was already done during the

Image
13-August-2018

Cancer Research, Prayers, RCCG, Adeboye, Daddy Freeze and Smarts

By Nneka Okumazie Some direct and indirect supporters of Daddy Freeze took to social media to point as wrongdoing, the prayers for healing against cancer in the body of Christ by Pastor Adeboye of RCCG, at the recently concluded program of their church. They said the church should instead fund cancer research and not pray about it, Okay. In trying very fast to sound smart and thoughtful – on church issues – their foolishness is apparent. Cancer is – mostly – incurable regardless of research anywhere in the world. Though trying is better, however, if RCCG or their university funds

Ad
Ad
Recent Stories
Image
09-December-2023

Moody’s Upgrades Nigeria’s Outlook to Positive After Economic Reforms

By Aduragbemi Omiyale Moody’s outlook on Nigeria has been upgraded from stable to positive after the federal government implemented a few economic reforms. In a statement on Friday, the rating agency said the decisions to remove the costly petrol subsidies, devaluation of the Naira and the unification of the foreign exchange (FX) market were good for the economy. When Mr Bola Tinubu assumed office in May 2023, he announced an end to the payment of subsidies on premium motor spirit (PMS). A month later, the Central Bank of Nigeria (CBN) announced the unification of the forex market, while the Naira

Image
09-December-2023

Value of Nigeria’s Unlisted Stock Exchange Reaches N1.2trn

By Adedapo Adesanya The NASD Over-the-Counter (OTC) Securities Exchange recorded a 1.6 per cent appreciation on Friday, December 8, as investors gained about N19.12 billion to push the valuation of the unlisted bourse to N1.202 trillion from the N1.182 trillion it closed in the preceding session. This achievement was influenced by the gains recorded by the trio of Aradel Holdings Plc, FrieslandCampina Wamco Nigeria Plc, and Central Securities Clearing System (CSCS) Plc. Data showed that Aradel Holdings Plc improved its value by N30 to settle at N900.00 per unit compared with the previous day’s N870.00 per unit, FrieslandCampina Wamco Nigeria

Image
09-December-2023

Naira Crashes to N1,099.05/$1 at Official Market

By Adedapo Adesanya The Nigerian Naira weakened to a new low on the American Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, December 8, amid speculations that the Central Bank of Nigeria (CBN) has again devalued the local currency. In the previous trading session, there were reports that the exchange rate for clearing cargoes has been raised to N952/$1, sparking rumours that domestic currency would hit N1,000/$1 in the spot market. On the last trading session of the week, the Naira lost N255.98 or 30.4 per cent of its value on the greenback to trade at N1,099.05/$1

Image
09-December-2023

Nigerian Exchange Rises 0.12% Amid Weak Investor Sentiment

By Dipo Olowookere A 0.12 per cent appreciation was recorded by the Nigerian Exchange (NGX) Limited on Friday, reversing the previous day’s losses triggered by profit-taking in the banking sector. Business Post reports that it was the same banking space that influenced the growth posted yesterday, rising by 1.60 per cent, supported by the consumer goods indices, which appreciated by 0.15 per cent. However, there were pockets of profit-taking during the last trading session of the week, with the insurance sector shedding 0.78 per cent, the industrial goods sector losing 0.65 per cent, and the energy counter declining by 0.57

Image
09-December-2023

Crude Prices Up 2% on US Demand Growth Expectations

By Adedapo Adesanya Crude oil prices rose more than 2 per cent on Friday after data from the world’s largest oil producer, the United States, supported expectations of demand growth. Brent crude futures settled at $75.84 a barrel after chalking up $1.79 or 2.4 per cent, as the US West Texas Intermediate (WTI) crude futures traded at $71.23 after gaining $1.89 or 2.7 per cent. Despite the gain at the final session of the week, both benchmarks fell for a seventh straight week, their longest streak of weekly declines in half a decade, on lingering oversupply concerns. For the week,

Image
08-December-2023

PZ Cussons Nigeria Publishes List of 61,628 Shareholders With Unclaimed Dividends

By Aduragbemi Omiyale One of the players in the personal healthcare and consumer goods sectors, PZ Cussons Nigeria Plc, has published a list of its shareholders with unclaimed dividends. Unclaimed dividends are cash rewards given to investors, mainly from the profits from the company’s operations, but are yet to be collected by the beneficiaries. This has been a major source of sleepless nights for the Securities and Exchange Commission (SEC), which is working to bring down the number of unclaimed dividends. It has been reported that the value of unclaimed dividends in the nation’s stock market is over N185 billion.

Image
08-December-2023

CBN Raises Alarm on Fake Naira Notes, Threatens Prosecution

By Adedapo Adesanya The Central Bank of Nigeria (CBN) has cautioned Nigerians to be wary of fake Naira notes currently in circulation, vowing to prosecute those engaged in the illicit acts. The apex bank in a release signed by Mrs Hakama Sidi Ali, the acting Director of Corporate Communications, said the counterfeit notes have been spread by some individuals for transactions in food markets and other places where commerce takes place across the country, noting that this is a punishable offence. “The attention of the Central Bank of Nigeria (CBN) has been drawn to the circulation of counterfeit banknotes, especially

Image
08-December-2023

Nigeria’s Crude Output Falls 30,000 Barrels Daily to 1.43mbpd in November

By Adedapo Adesanya Nigerian crude output fell by 30,000 barrels per day to 1.43 million barrels per day in November, according to data from an S&P Global Commodity Insight. This was lower than the 1.46 million barrels produced in October by Africa’s largest oil producer and 312,000 barrels per day short of its 1.742 million barrels per day target in 2023. Angola, Africa’s second-largest oil producer, saw output drop 20,000 barrels per day to 1.13 million barrels per day, according to the survey, compared with its quota of 1.46 million barrels per day. The drops impacted the wider output of

Image
08-December-2023

New Survey: Some Nigerian Bank Adverts Are Misleading—Customers

By Aduragbemi Omiyale Some aggrieved customers have accused Nigerian banks of lying about a few of their services in adverts in the media and not doing enough to assist when needed, despite using the provided platforms to lodge their complaints. In a survey conducted recently by a foremost perception consulting firm in the country, CMC Connect LLP, it was observed that some financial services consumers in Nigeria are not satisfied with what they get from their banks. The perception study carried out by the Strategy & Intelligence Service unit of CMC Connect showed that, “Consumers do not have enough information

Image
08-December-2023

Delta State Proposed Budget 2024 and Critical Concerns

By Jerome-Mario Utomi It is common knowledge that Delta State Governor, Sheriff Oborevwori, recently, presented a N714.4 billion Appropriation Bill tagged ‘Budget of Hope and Optimism,’ for the 2024 fiscal year to the state House of Assembly. What is, however, uncertain to Deltans and the watching world is whose interest the bill, if passed, is meant to serve or protect. There is also the concern as to whether it will herald into the political geography called Delta state, a just or an unjust law. As we are now, a just law is ‘a man-made code that squares with moral laws