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Naira in steady rally, gains 15k on new forex regime

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Naira

• May go for N300 at interbank market
• NEC endorses new policy

Nigeria’s currency, the naira, yesterday continued to gain more value against foreign currencies a day after the Central Bank of Nigeria (CBN) released the details of the flexible policy for the management of the foreign exchange in the country.

Checks among Bureaux de Change ( BDCs) operators in Abuja indicated that the naira gained 15 kobo and 17 kobo respectively between Wednesday and yesterday following the apprehension and latter release of the details of the policy which restricted the market to a single window, thereby blocking opportunities for easy round- tripping and arbitrage by speculators .

Ahead of the takeoff of the interbank operations under the new regime of flexible exchange rate policy, there are indications that the naira float will terminate at N300 per dollar beginning from Monday.

And barely 24 hours following the introduction of the new foreign exchange regime, the National Economic Council (NEC) rose from its 69th meeting yesterday endorsing the policy and describing it as a means of boosting the nation’s economy.

Capital market participants who spoke with The Guardian yesterday noted that expectations are high; that the new policy would enable the high currency volatility risk to subside, thereby encouraging foreign investors  to take advantage of the opportunities in naira-denominated instruments.

The exchange rate against the naira fell from the N370 / $ level it traded on Wednesday to N365/ $ yesterday morning and by evening settled at N355 / $, a development that excited some NDCs operators, who before now had resorted to the importation of hard currencies from Britain, Saudi Arabia and until recently, neighbouring Ghana.

One of the operators, Prince Nuhu., who is the Managing Director of Dommo BDC Ltd. located at the Wuse Zone 4 District of the Abuja City told The Guardian that the new flexible forex policy of the CBN is a welcome development as it is capable of assisting the naira to gain more value and address the rising spate of inflation in the country.

The new policy, which remains under the ‘managed float’ system, is also billed to operate with a circuit breaker, to contain any eventual free-fall during trade.

Already, a forum slated for yesterday in Abuja between currency dealers and Financial Market Dealers Association, may have determined the “fair value” for the naira exchange against major currencies, especially the dollar, which would benchmark forex trading at inter-bank on Monday.

Meanwhile, a renewed strategy to remain in business has been scripted by the bureaux de change operators, as they plan a N600 billion capital base as a group.

The capital base forms a major part of the requirements for primary dealership in the new forex policy. Of the N600 billion capital base requirements, N200 billion will represent shareholders fund, while N400 billion stands as evidence of foreign assets, to be admitted into the primary dealership of the new foreign exchange business.



17 Comments
  • Thor

    What happened to N1 = $1?? Yeah, it unrealistic like all APC promises… ?

    • Artful ºDodger

      One of the thieves even on the cross and dying also resulted to mockery when he asked Jesus; ¨ If you are the Christ, save thyself and us¨.

      Hypocrisy also come with the package nowadays when you are igbo of latrine value. Enjoy o!

      • Thor

        Your reply is off point, uneducated and hugely pathetic..

      • Jonathan

        You have the psych of Pathological begot.

    • bigbang

      NDA happened.

      • Thor

        Better put, ignorance happened..

    • vic

      this is how we define buhari, a liar!!!

    • Curseless

      Those days are gone for now. Since Nigeria does not have any meaningful foreign reserve to back up the Naira it will continue on a free fall, thanks to the last administration if I may add.

      • Thor

        Well, Jonathan defended the naira against imf and other international bodies.. I pray there be more internal investment.. Buhari should also focus in this.. If real money (not corrupt ones) start flowing, it may help stabilize the naira and check our ever increasing inflation..

  • Mekino

    @artful most you be nepotic in all your write ups ?

  • Mekino

    Try and be civil in all your comments and response!

  • Daniel Ohakwe

    Guys I think you should give the FG some credit here. You should understand that FG is not a “person”; but an institution. As a matter if fsct , Buhari should be hailed for maintaining that idea of FG being an institution. He would have jetissoned all GEJ’s policies and projects, as typical with Nigerian leaderships, but he incorporated these policies and made them better. Today we have TSA, ePayment of workers salaries and as a matter of fact the new Forex Policy. CBN started working in this policy even before the election in 2015.

    As a matter of fact, there’s no government that had been more committed to Nigeria and Nigerians than this government. GEJ’s government was; but they lacked the will power and boldness to stand the monstrous corrupt politicians.

    I’d rather that we think and read well before we criticize… Of course criticisms help a focused man work harder and improve.

    • oloriakojo

      Daniel, Very good and reasonable comments. We tend to look at the cup half empty that takes us no where ..rather than half full which will help us to see opportunities in the future.

      I believe we have a bright future….if we can get rid of corruption in our system. I commend Buhari for his stable approach to govt as apposed to what obtained in the past. For example, he has not changed the CBN governor despite some damaging allegations to him…….including the $2.1B arms funds sharing deal under his watch!!!! ……..Does Buhari have a game plan he is executing????

    • Okpomo

      Before now, there have been series of calls on the govt to allow the naira to find its true value, instead of pegging it unrealistically in the face of dwindling oil fortunes. But this govt. refused. Therefore, this move, though a welcome one, is a little belated. With inflation at 16% and still rising, a 0.4% economic contraction and foreign investment draw-down, there wasn’t much choice left for the govt. But as the saying goes, better late than never.

    • lovely comment. if we can forget our tribal and religious differences and see reason to issues as this, we will go places. Nice comment Daniel Ohakwe.

    • Omooba A

      Well written Daniel. I believe that some people on this forum will not see anything good in this administration if they turned Aso Rock, I mean the real rock behind the villa, into gold. What these hypocrites refused to remember and understand is that GEJ was our candidate, i.e. most Nigerians during his first election. Six years is more than enough time to determine what the next four years will bring if GEJ was still in power. Those crying foul now would have been ready to stone GEJ motorcade anytime he ventured outside the villa. Thanks to the good thinking Nigerians to prevent that from happening. Has GEJ won the last election, would there be Dasukigate, Ekitigate, and those gates yet to open? The answer is no. I will prefer responding to those that make use of their given common sense than those that attached tribal sentiments to their thoughts.

  • Ademola

    I would like to suggest that biafrans and their ilk should leave out comments on issues that are way above their intellectual capacity and limit their posts to issues such as ” MASSOB, IPOB, etc. You know, mundane stuff!