Shell Energy Entrepreneurs 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: 789

•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...
Wike’s latest offer on criminals, another smokescreen to...

Foreign Affairs Minister makes FDI top priority

Boko Haram devices strategies to dodge military's bombs...

Delta Gov’s wife donates borehole to prison

Ohanaeze youths kick against Biafra •Tell MASSOB: ‘Let’s...

Buhari, Atiku, others in fight to finish, as...

TUC boss rues negative impact of oil theft,...

2 final-year varsity students in ‘soup’ over armed...

Northern group warns defenders of Igbo quit notice...

Trump indicts Obama over Russia’s meddling in U.S....

Biafra: Army relocates tactical headquarters to Aba

Senators get formal notice of Buhari’s sick leave,...

 

Latest News Man divorces wife after 44 years of marriage based on information received in his dream Rice farm: Bayelsa community disowns ex-militant leader, demands his arrest Gowon, others shun book launch in memory of Tafawa Balewa Restructuring: Urhobo seek return to Midwest Region Expert links bush burning to asthma, cancer, premature death 2019: Fani-Kayode lashes 7 Northern governors for mobilisng for Buhari’s re-election •Dismisses them as parasites, vampires Benue Killings: I never ignored Ortom’s warning — Osinbajo My 10-year ban from holding public office in Ekiti a big joke — Fayemi Kidnapped lawmaker found dead Kano commissioner, sons in police net over ‘stone devil Kwankwaso’ remark OBJ sets record as Open University graduates 14,769 Okah, other Kuje Maximum Prisons inmates in safe custody — Prisons Service

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (314,130 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (303,141 views) Shameless Genevieve Nnaji exposes breasts in public (243,430 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (200,773 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (189,534 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (178,781 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (155,029 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (138,966 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (135,749 views) Lagos plane crash: Journalist releases victims’ names (124,044 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (121,058 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (118,561 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (33) Business (2,848) Business Verdict (32) Columnists (790) Complaints & Requests (94) Enterprise & Opportunities (200) Entertainment (431) Features (541) Global Business Monitor (222) International (1,738) Interviews (139) Live Commentary (28) Love Matters (100) News (31,928) Opinion (864) Pidgin (10) Politics (4,349) Religion (666) Sports (1,405) Stock Watch (25) AMA & Al Jazeera Global Update

 

CBN Banner advert

CBN Words on marble

 

 

Thierry Henry in Lagos Nigeria

 

APO Group Partner

 

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!

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement



 

 

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!