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Pressure Mounts on Nigerian Currency at FX Windows

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Nigerian Currency

By Adedapo Adesanya

More pressure piled on the Nigerian currency in the various segments of the foreign exchange (FX) market on Tuesday as its value against the United States Dollar further dropped at the close of business.

Business Post reports that the Naira had it very rough with the greenback at the black market, the Peer-to-Peer (P2P), and the Investors and Exporters (I&E) windows of the forex market yesterday.

In the parallel market, the domestic currency depreciated against the greenback by N5 or 0.66 per cent to trade at N765/$1 compared with the preceding day’s N760/$1.

At the P2P window, the value of the Nigerian currency depreciated against the greenback by N4 or 0.52 per cent to settle at N773/$1 compared with Monday’s N769/$1.

Also, the local currency weakened against the American currency by 29 Kobo or 0.07 per cent yesterday in the spot market to trade at N441.67/$1, in contrast to the preceding session’s value of N441.38/$1, according to data obtained from FMDQ Securities Exchange.

During the session, FX transactions worth $79.41 million were carried out, $39.94 million or 101.2 per cent higher than the $39.47 million executed a day earlier.

In the interbank segment, the Naira witnessed a further drop against the Pound Sterling on Tuesday by N2.27 to wrap up at N495.15/£1 compared with the previous day’s N492.88/£1 and against the Euro, it fell by N1.22 to close at N431.68/€1, in contrast to Monday’s value of N430.46/€1.

Meanwhile, the cryptocurrency market recorded a northward movement as earnings begin to filter in, with analysts hoping that the US Federal Reserve will soon calm its aggressive plan of interest rate raises.

Bitcoin (BTC) gained 4.4 per cent to sell at $20,170.03, Ethereum (ETH) recovered 10.1 per cent to quote at $1,479.61, Cardano (ADA) recorded an 11.4 per cent increase to settle at $0.4021, and Dogecoin (DOGE) made a 9.8 per cent jump to trade at $0.0659.

Further, Solana (SOL) appreciated by 9.6 per cent to $31.13, Litecoin (LTC) climbed by 6.4 per cent to trade at $56.11, Binance Coin (BNB) recorded a 4.2 per cent appreciation to $285.37, and Ripple (XRP) rose by 2.7 per cent to trade at $0.4607.

However, the values of Binance USD (BUSD) and the US Dollar Tether (USDT) remained unchanged on Tuesday at $1.00 each.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Economy

I Fully Agree Oil Has Been a Curse to Nigeria—Moghalu

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kingsley moghalu

By Aduragbemi Omiyale

A former deputy governor of the Central Bank of Nigeria (CBN), Mr Kingsley Moghalu, has said oil has been a curse to Nigeria.

He said this in reaction to the discovery of oil in the northern part of the country.

On Tuesday, President Muhammadu Buhari flagged off the Kolmani Integrated Development Project in Bauchi, and he said the country attracted $3 billion investment in fossil energy from the project at a time when the oil and gas sector was becoming less attractive.

“It is, therefore, to the credit of this administration that at a time when there is near zero appetites for investment in fossil energy, coupled with the location challenges, we are able to attract investment of over $3 billion to this project,” Mr Buhari said.

The Kolmani Integrated Development Project is a fully integrated in-situ development project comprising upstream production, oil refining, power generation and fertilizer.

The Kolmani River field has huge commercial deposits of hydrocarbons, which the President said is “over one billion barrels of oil reserves and 500 billion cubic feet of gas.”

But Mr Moghalu, who contested to be the President of Nigeria in 2019 under the Young Progressives Party (YPP), believes that the country has not gained anything meaningful from being an oil-producing nation.

Nigeria is one of the leading producers of crude oil in Africa. Most of the foreign exchange (FX) earnings come from the sale of the commodity. However, oil theft and corruption have subjected its citizens to abject poverty, with the government resorting to borrowing to fund its budgets.

“I fully agree with those who say oil has been a curse to Nigeria. Many of them question the ultimate value of the reported Kolmani oil find in Northern Nigeria.

“But I am also practical enough to know three things. First, some countries like Saudi Arabia, Gulf States, and Norway were smart enough to use oil to build their economies but diversified into other means of wealth creation and also built-up savings (reserves/Sovereign Wealth Funds) for the rainy day that have served them well.

“Secondly, the real secret of the wealth of nations does NOT lie in natural resources. It lies in economic complexity – the ability to prioritize technological innovation and use it to manufacture complex products that are value-added and competitively produced and then exported to dominate the world trading system. Singapore, South Korea, Japan, Switzerland and many other of the world’s wealthiest countries have NOTHING of value under their soil but have used this principle to create wealth for their citizens. That’s why they are rich, but we in Nigeria and most other African countries, with our so-called blessing of natural resources, are in a poverty trap.

“We in fact have the resource curse. 70% of the world’s strategic minerals are in Africa, but the continent’s share of world trade is just 3% in 2022.

“The third thing I am practical enough to know is that, as Nigeria is currently led and configured, the dominant mentality of its political leadership is still fixated on natural resources and resource rents. They simply do not share in, & do not care, about the secret of the wealth of nations.

“Their minds still haven’t evolved to that knowledge or, more accurately, the political will to de-emphasize natural resource thinking and shift to real wealth creation,” the respected economist said in a series of tweets via his verified Twitter handle, @MoghaluKingsley.

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Economy

Index Rises 2.04% on Interest Airtel Africa, MTN Nigeria Shares

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NSE lists Airtel Africa Shares

By Dipo Olowookere

It was another positive outing for the Nigerian Exchange (NGX) Limited on Friday as it closed higher by 2.04 per cent on the back of buying interest in Airtel Africa, MTN Nigeria and 16 others.

The sustained upward movement was buoyed yesterday by the 1.10 per cent growth posted by the insurance sector, the 0.26 per cent improvement in the industrial goods space, and the 0.25 per cent rise in the banking counter.

The trio offset the 2.37 per cent loss printed by the consumer goods counter, as the energy index closed flat when trading activities were brought to an end at 2:30 pm.

Consequently, the All-Share Index (ASI) closed higher by 949.40 points to 47,554.34 points from 46,604.94 points, as the market capitalisation grew by N517 billion to settle at N25.902 trillion compared with Thursday’s closing value of N25.385 trillion.

The stock market was quiet on Friday as the most active stock, FCMB, only traded 16.8 million units, while MTN Nigeria sold 16.4 million units. Fidelity Bank traded 7.5 million shares, Zenith Bank exchanged 6.4 million equities, and Access Holdings transacted 5.8 million equities.

From an analysis of the activity chart, a total of 99.0 million stocks worth N5.5 billion were traded by investors yesterday in 2,780 deals compared with the 138.6 million stocks worth N2.2 billion traded in 3,434 deals, indicating an increase in the trading value of 154.41 per cent, a decline in the number of deals by 19.04 deals and a drop in the trading volume by 28.58 per cent.

Red Star Express ended the day on top of the gainers’ chart after its value rose by 9.66 per cent to N2.27, Regency Assurance appreciated by 8.70 per cent to 25 Kobo, Livestock Feeds grew by 8.16 per cent to N1.06, Prestige Assurance expanded by 7.50 per cent to 43 Kobo, and Airtel Africa improved by 7.41 per cent to N1,450.00.

Conversely, Capital Hotel topped the losers’ log yesterday after it went down by 10.00 per cent to N3.06, Nestle Nigeria fell by 10.00 per cent to N963.90, International Breweries drained by 2.27 per cent to N4.30, GTCO lost 1.48 per cent to N20.00, and Wema Bank depreciated by 0.97 per cent to N3.07.

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Economy

Naira Gains at P2P, Weakens at I&E

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naira value

By Adedapo Adesanya

The Naira closed stronger against the United States Dollar at the Peer-to-Peer (P2P) window of the foreign exchange (FX) market on the last trading session of the week by N1 to sell at N786/$1 compared with the previous day’s exchange rate of N787/$1.

Similarly, in the black market, the Naira appreciated against the American Dollar by N2 to trade at N775/$1 yesterday, in contrast to the N777/$1 it closed on Thursday.

However, in the Investors and Exporters (I&E) segment of the forex market, the domestic currency depreciated against its US counterpart by 0.3 per cent or N1.33 to settle at N446.33/$1 compared with the preceding session’s N445/$1.

Data from FMDQ Securities Exchange indicated that the FX turnover at the I&E window on Friday was $117.26 million, lower than the $145.89 million reported a day earlier by $28.63 million or 19.6 per cent.

In the interbank segment, the Nigerian Naira closed flat against the Pound Sterling and the Euro yesterday at N526.97/£1 or N455.56/€1, respectively.

Meanwhile, in the cryptocurrency market, there were recoveries as a majority of the 10 cryptos tracked by Business Post pointed north, with Dogecoin (DOGE) surging by 14.6 per cent to trade at $0.093.

This happened as the crypto market is still reeling after a brutal month, with investor confidence shattered following news that FTX, once one of the biggest and most popular crypto exchanges, went bust.

Binance Coin (BNB) recorded a 5.5 per cent appreciation to trade at $311.11, Ethereum (ETH) saw its value go up by 3.8 per cent to sell at $1,220.31, Cardano (ADA) recorded a 2.9 per cent rise to quote at $0.319, and Solana (SOL) appreciated by 2.8 per cent to trade at $14.41.

Further, Ripple (XRP) recorded a 2.4 per cent gain to settle at $0.4079, Bitcoin (BTC) made a 1.4 per cent improvement to sell at $16,626.37, Litecoin (LTC) jumped by 1.3 per cent to trade at $77.20.

But the US Dollar Tether (USDT) and Binance USD (BUSD) remained unchanged at $0.9995 and $1.00 apiece.

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