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Forex Scarcity Persists As CBN Resumes Intervention



There are indications that banks are ignoring the Central Bank of Nigeria, CBN, directive that they should grant their customers unfettered withdrawal of foreign currencies from domiciliary accounts.

Meanwhile, Nigeria’s foreign exchange market has recorded a drastic change following the market reforms introduced by the CBN, previous week.

Findings show that the banks are still restricting the amount of foreign currency that customers can withdraw from their accounts saying the currencies are still scarce.

Dealers and the customers lamented that the situation has impeded supply of foreign currency to the market.

But the drastic change in both structure and operations of the foreign exchange market, has resulted in exchange rate convergence by default as the US dollar traded within narrow band across the three segments of the market, namely, the Investors and Exporters (I&E) window, the Bureau De Changes (BDCs) and the black market.

However, for the first time, the exchange rate in the official market (I&E) surpassed what obtained in the black market.

Meanwhile, dealers across all the segments are facing acute scarcity of the US dollars while CBN resumed supply of the foreign currency last week, though at a very low volume.

Findings by Financial Vanguard show that Naira last week depreciated further to N770.17 per dollar in the I&E window, with currency dealers projecting further deterioration of the dollar scarcity, a situation which may propel further depreciation of the local currency this week.

According to data from FMDQ, the I&E window exchange rate closed at N770.17 per dollar on Friday. This represents 16.2 per cent week-on-week, WoW, depreciation of the Naira when compared with the closing rate of N663.04 per dollar the previous week.

The Naira also depreciated in the parallel market, where the dollar traded within the range of N765 and N770 per dollar, at the close of business, up from N759 per dollar the previous week.

The Naira has been on the downward trend in both the official market and parallel market, since the Central Bank of Nigeria, CBN announced, “Operational Changes to the Foreign Exchange Market,” including elimination of multiple exchange rates/segments and re-introduction of willing seller, willing buyer model in the I&E window.

Since the changes were announced the previous week, the Naira has depreciated by 63 per cent in the I&E window, from N471.67 per dollar on Tuesday June 13th.

During the same period, the Naira also depreciated by 20 per cent in the parallel market from N755 per dollar.

Dollar scarcity

Financial Vanguard findings from currency dealers showed that the depreciation is driven by acute dollar scarcity in both I&E and the parallel market.

A banker and forex market analyst who spoke on condition of anonymity said, “Though the CBN intervened in the I&E window on Thursday, the market is still very short, in terms of supply. The volume of sales by the CBN was not much. The highest volume sold per buyer was $5 million dollars. Some others got $2.5 million while others got between $250,000 and $1 million.

“They, however, sold only to people that bided at an exchange rate above $761 per dollar.

“After the CBN’s sales, some international organisations also sold but the volume was small compared to the demand, especially given the backlog of matured obligations. I will say the market is still evolving and going through a price discovery process. The volatility will continue with the Naira further depreciating, depending on dollar supply coming into the I&E window.

“The true exchange rate will only emerge when all the backlog of dollar demand has been satisfied.”

Operators react

Bureaux De Change, BDC, operators and parallel market operators who spoke to Financial Vanguard lamented the dollar scarcity in the market, noting that banks are yet to comply with the directive of the CBN that they should allow customers have unfettered access to funds in their domiciliary accounts.

Mallam Ahmed Yunusa, a black market trader in Lagos, said: “The market has been very busy since last week after the CBN eased its restrictions on forex trading in banks.

“A dollar was sold for N770 today (last Friday) because I bought a dollar for N765 making just N5 profit. However, over the week, the dollar has been traded at N745 to N770.

“The reason for this is because most of our customers who visited the banks complained the demand for dollars is higher than the supply and that the banks don’t have enough dollars to go round hence the rise in the price for the willing buyers.

“Most traders at the parallel market decided to sell a bit less or higher within the price range of banks to keep our customers as the competition becomes tougher.

“I see a continuous rise in the volume of demand for the dollar as we approach the end of the year and an appreciation of the Naira to N500 or N600 per dollar in the near term if dollar supply increases.”

On his part, Mallam Umoru Mohammed, another black market trader in Lagos, said: “The dollar has been trading since last week from N740 to N770. Today the dollar was traded at N750.

“Here in Ikorodu, businesses have been dull as not many sold dollars to us hence I was not able to get supply of dollars due to the higher demand of dollars than supply.

“I see the Naira depreciating to N800 per dollar due to the inability of traders to meet the demands of buyers as we approach the remaining half of the year but if there is more forex inflows the reverse will be the case.”

Similarly, Garuba Hassan, a parallel market operator also in Lagos, said: “Today (last Friday) we are buying at N750 per dollar, but yesterday the rate was between N760 and N770 per dollar. If you go to the banks, they will tell you no dollars. You will have to visit about three banks before you can get the dollars, and this is affecting the market and the rate.”

Speaking on condition of anonymity, a Bureaux De Change, BDC, operator, and executive member of Association of Bureaux De Change Operators of Nigeria, ABCON, said: “There is nothing like BDC exchange rate because the CBN is not selling dollars to BDCs. We all compete with the parallel market operators for dollars and as such we have to ensure our rates match theirs.

“The situation in the market now is that demand is high but dollars are still scarce because there is no supply.

“People that want to withdraw dollars from their domiciliary account are not able to do so. The banks keep telling them there are no dollars.

“But I believe the Naira will appreciate in the coming weeks. The sharp depreciation of the Naira in the I&E window, I believe, is to encourage investors and Nigerians in Diaspora to bring in their dollars.

“Once this happens, the exchange rate in both I&E and the parallel market will gradually go down.”


Navy disowns list of successful candidate for Batch 35 recruitment



The Nigerian Navy (NN) has disowned the purported list of successful candidate for its Basic Training School (NNBTS) Batch 35 Recruitment, saying it is fake.

Commodore Adedotun Ayo-Vaughan, the Director of Naval Information, said this in a statement in Abuja.

Ayo-Vaughan said the exercise was conducted in three centres across the country, namely; Lagos, Rivers and Kaduna States.

He described the information, being circulated recently as fake, and handiwork of fraudulent miscreants who were trying to dupe some unsuspecting applicants.

He said the list of successful candidates had not been released and that no form of invitation for training, via text message had also been disseminated by the Nigerian Navy.

‘’The alarming rate of circulation of fake information by unscrupulous individuals, regarding enlistment or recruitment into Navy is quite worrisome.

‘’Efforts are on to track and arrest the miscreants.

“Members of the public especially prospecting applicants who participated in the said recruitment are strongly enjoined to always authenticate information from the NN official website,, and other official social media handles, as well as other credible mainstream media platforms.

“Similarly, miscreants and mischief makers are warned to desist from this unwholesome practice, otherwise they will face the full wrath of the law,” he said.

Ayo-Vaughan said the text message, had invited unsuspecting applicants to report for military training at NNBTS Onne, Rivers, following their purported selection.

He said the criminals further claimed in the text message that the exercise would commence on Oct. 6.

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Gov. Alia condemns kidnapping of commissioner, one other



Gov Alia Hyacinth Alia

Gov. Hyacinth Alia has strongly condemned the kidnaping of Mr. Matthew Abo, his Commissioner for Information, culture and Tourism, and former Chairman Ukum Local Government Area (LGA), Mr. Iorwashima Erukaa.

This is contained in a press statement on Monday, signed by his Chief Press Secretary (CPS), Sir Tersoo Kula, and made available to the News Agency of Nigeria (NAN) in Makurdi.

According to the statement, while Mr Abo was kidnapped by unknown gunmen in his Sankara home at about 8pm on Sunday, September 24, Mr. Erukaa was taken away by a yet-to-be identified gunmen on Saturday, September 23.

The Governor, who described the act as barbaric and unacceptable, has directed security agencies to immediately commence operations to ensure the safe release of the duo.

He called on the people of the State to remain calm, as his administration would do everything possible to make the State safe for all.

“The kidnappers have made contacts with the family of Mr Erukaa but are yet to contact Mr Abo’s family,” the statement stated

Several gunmen had stormed the the commissioner’s residence in Zaki-Biam, Ukum LGA and kidnapped him.

Eyewitnesses who spoke to NAN, said that the kidnappers who came on four motorcycles, ordered everyone in the house, including the his wife and children, to lie face down and took him away to an unknown destination.

The witnesses said the abductors compelled the commissioner at gun point to sit behind the rider of one of the motorcycles while a gunman sandwitched him.

Mr Abo was sworn in as a member of the Benue State Executive Council on August 29.

He hails from Ukum Local Government Area of Sankera axis, a major flashpoint of criminal activities with rampant killings and kidnappings for years now.

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