GTB 737 banner Yudala banner

Nigeria moves closer to single naira rate

By News Express on 03/08/2017

Share on facebook Yahoo mail icon Gmail icon

Views: 419

•CBN Headquarters
•CBN Headquarters

 Nigeria took a step to unify its multiple exchange rates by allowing banks to use a currency window for investors when quoting the naira rather than the official rate. The naira weakened on the interbank market.

FMDQ OTC Securities Exchange, the Lagos-based platform that oversees interbank trading, asked lenders this week to publish quotes reflecting trades in the Investors’ & Exporters’ FX Window, according to Ecobank Transnational Inc. and Access Bank Plc. The window was opened in late April in a bid to attract inflows to the dollar-starved nation.

The interbank rate weakened 14 percent to 366.04 per dollar as of 5:42 p.m. in Lagos, close to 367.08 for the so-called Nafex rate, the daily fixing published by FMDQ for the Investors’ & Exporters’ FX window. Naira three-month forward contracts based on the official rate rose as much as 1.3 percent to 342 against the greenback, the highest level on a closing basis since June 6.

“FMDQ and traders reached agreement to try to move toward a single exchange rate,” Kunle Ezun, an analyst at Ecobank in Lagos, said by phone. The idea is “to show the true reflection of the naira in the market. The I&E window in terms of transparency and price discovery seems to reflect where the naira should trade. All banks are now putting quotes at that rate.”

Nigeria has faced dollar shortages since the price of oil, its main export, crashed in 2014 and the central bank responded by tightening capital controls. As the squeeze worsened, Nigeria opted for a system of multiple exchange rates rather than floating its currency like other crude producers such as Russia and Kazakhstan.

The change this week was made because banks have been trading with each other mainly via the Nafex market since its introduction, according to Bola Onadele, FMDQ’s chief executive.

Banks “should quote where naira is trading with integrity and transparency,” he said in a text message.

While the move will be welcomed by investors, who have long criticised the existence of several exchange rates, a full unification may still be some way off, according to Standard Chartered Plc. The central bank maintains an official rate as strong as 305 per dollar, which is uses to ensure fuel importers get cheap dollars.

“It is probably a positive step toward greater transparency in the FX market,” said Samir Gadio, head of Africa strategy at Standard Chartered in London. But “exchange rate unification across the board could imply higher fuel prices, or larger implicit subsidies, which will require national consensus. So it is not a straightforward step.” (Bloomberg)

 

Source News Express

Posted 03/08/2017 3:04:44 PM

 

Share on facebook Yahoo mail icon Gmail icon


 

CLASSIFIED ADS

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!

 

You may also like...
Boko Haram: Police deploy 3,000 personnel

Hammer falls on 23 Customs officers

Lagos State commits to ending violence against children...

I’ll complete all road projects within Ibadan metropolis...

Ojo Maduekwe emerges PDP BoT Secretary, Senator Jibril...

Minister briefs BON on digitization progress, stresses need...

Fidelity Bank COO mulls better customer data use...

EFCC detains Ex-FCT Minister Bala Mohammed

PDP removes Ali-Modu Sheriff as Chairman, sets up...

BREAKING NEWS: Buhari, Osinbajo publicly declare assets •Details...

HURIWA tasks Supreme Court to resolve PDP crisis...

CAN rejoices with Buhari, Nigeria; calls for more...

 

Latest News BREAKING NEWS: IPOB makes U-Turn, withdraws threat to stop Anambra governorship election Anambra lawyers turn against IPOB, blame Nnamdi Kanu for Ekwulobia tragedy Kwara confirms outbreak of Lassa Fever Whereabouts of 3 Bayelsa indigenes arrested by soldiers remain unknown 15 months after •Families lament Nigeria needs to return to true federalism — Anyaoku NMA charges FG to improve health sector Boko Haram steps up attacks on refugee camps in Northeast Freed Chibok girls not living in solitary confinement: FG Rain of eulogies as Justice Obaseki is buried in Benin NLC condemns attack on EFCC NiMet foresees isolated cases of rain today in South East, clouds and thunderstorms elsewhere Court remands 12 kidnap suspects in prison custody

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (271,609 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (253,380 views) Shameless Genevieve Nnaji exposes breasts in public (205,878 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (174,213 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (172,775 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (154,202 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (133,547 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (124,963 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (117,596 views) Lagos plane crash: Journalist releases victims’ names (109,078 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (108,545 views) APC cries foul as PDP’s Fayose takes early lead in Ekiti governorship election (101,020 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (27) Business (2,661) Business Verdict (19) Columnists (727) Complaints & Requests (92) Enterprise & Opportunities (172) Entertainment (351) Features (476) Global Business Monitor (170) International (1,492) Interviews (128) Live Commentary (28) Love Matters (67) News (27,558) Opinion (780) Pidgin (8) Politics (3,856) Religion (595) Sports (1,305) Stock Watch (23) AMA & Al Jazeera Global Update

 

UBA mobile app

CBN words on marble advert

 

 

Senator Adeleke on the dancing steps in London

 

APO Newsbreak logo

 

CLASSIFIED ADS

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement



 

 

CLASSIFIED ADS

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!