Monday, September 27Inside Business Africa
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Tag: forex

CBN to infuse more dollars through banks to improve forex supply

CBN to infuse more dollars through banks to improve forex supply

Business, Economy, Innovation
The Central Bank of Nigeria (CBN) has announced that it will inject extra dollars into approved banks in order to increase the economy’s foreign exchange supply. Senior CBN officials told ThisDay that the apex bank can handle all valid transactions channelled through banks. The black (parallel) market accounted for less than 1% of FX transactions, according to the officials, and should never be utilized to decide Nigeria’s dollar exchange rate. According to the news report, the apex bank met with ministries, agencies, and departments (MDAs), including airline operators, to discuss stopping the collection of foreign currency payments. Officials also stated that anyone who collect rent in dollars would face legal action, and that those in need of dollars for intern...
Forex shortage: A crisis foretold

Forex shortage: A crisis foretold

Finance
Managing a commodity currency, anywhere in the world comes with the challenge of a terminal ailment. Just when one thinks there is a breather somewhere, it breakdowns and returns with the ferocity of a tiger. Hence, several emerging economies are often in the ‘blues’ taming a currency crisis. And so is Nigeria, except that its cases are particularly more worrisome as the Central Bank of Nigeria (CBN), as Prof. Godwin Owoh, an economist, noted, seems to gamble more each time it throws a punch at what has become the economy’s most problematic enemy. At the weekend, it did so again in a manner Owoh described as banal and naive. This time, it is offering the remittance market service users a bonus to wire money to Nigeria through the expensive official routes. The apex bank unveiled...
‘Infrastructure, forex undermining real sector interventions’

‘Infrastructure, forex undermining real sector interventions’

Business
Improvement in local manufacturers’ confidence in the economy as well as sectoral recovery, remains challenged by parlous state of infrastructure and poor implementation of policies, especially those related to the palliative given to the manufacturing sector in the form of reduced interest rate, operators have said. With the manufacturing sector’s contributions to the latest Gross Domestic Product (GDP) remaining very low, despite acclaimed interventions from the Central Bank of Nigeria (CBN), local producers noted that the inability to control input costs and poor infrastructure affect productive output as well as confidence in the economy. The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, noted that while manufacturers are optimistic t...
Preserving forex reserves, raising local capacity through import substitution

Preserving forex reserves, raising local capacity through import substitution

Finance
For decades, successive governments in Nigerian resorted to protective measures, including import restrictions and exchange rate control, to manage its foreign exchange (forex) market, and deal with the problems of import and oil dependency. This import substitution policy is usually heralded by an economic crisis, often triggered by the collapse of the oil market, and a significant drop in Nigeria’s oil revenues, which account for 70% of the country’s total revenues. Expectedly, the Central Bank of Nigeria (CBN), followed this well-trodden path in efforts to ensure that Nigeria embraces import substitution and reduces the demand pressure on foreign exchange by importers, and ultimately conserves the nation’s hard-earned reserves. For instance, in June 2015, it ban...
Rising COVID-19 cases, unfavourable policies drag NSE’s index by 1.99%

Rising COVID-19 cases, unfavourable policies drag NSE’s index by 1.99%

Business
The Nigerian Stock Exchange (NSE) suffered another week of losses, amid rising COVID-19 cases, and the persisting foreign exchange (forex) illiquidity in the market. Consequently, the NSE All-Share index (ASI), and market capitalisation depreciated by 1.99% to close the week at 24,336.12 and N12.695 trillion, respectively. All other indices also finished lower. But analysts linked the persistent selloff to lack of coordination in policy articulation, formulation and direction. Specifically, the Chief Research Officer, Investdata Consulting Limited, Ambrose Omordion, said the proposed hike in electricity tariff and recent increase in the pump price of premium motor spirit (petrol) to N143.80 per litre, are clear indications that monetary and fiscal authorities are still not comple...