Ola Olukeyede, the chairman, Economic and Financial Crime Commission (EFCC), said a massive attack on the naira was planned by some forces but for the swift intervention of the commission.
He said this earlier in the week why justifying the reason his Commission moved for the freezing of more than 300 accounts in a quest to defending the naira.
EFCC office in Abuja
The naira on Thursday continued its downward trend against the United States dollar, depreciating to N1,309/$ at the official market and N1,420 at the parallel market.
The new rate which indicates a depreciation of N90 or 6.8 per cent from N1,330 quoted by currency traders on Wednesday followed renewed dollar demand pressure in the foreign exchange market.
Emerging fact revealed that operators bought the greenback note at N1,340 and sold it at N1,420, leaving a profit margin of N80
Thus with the current exchange rate, the naira has lost 26.2 per cent in two weeks when compared to N1,125 per dollar quoted on April 12, 2023, on the parallel market, popularly called the black market.
On Monday, the Central Bank of Nigeria approved the allocation of $15.83 million to 1,583 BDC operators. The move was aimed at enhancing liquidity in the unofficial market.
The CBN in a letter to BDCs announced the allocation of $10,000 to operators across the country. The allocation comes at a rate of N1,021 per US dollar, aimed at stabilsing the foreign exchange market and ensuring accessibility of foreign currency to eligible end users.
According to a letter released by the CBN to the Association of Bureau De Change Operators of Nigeria, all eligible BDCs are directed to initiate payments of the Naira deposit to specified CBN Naira Deposit Account Numbers starting from Monday, April 22, 2024.
Upon submission of confirmation of payment and necessary documentation, the CBN will disburse foreign exchange at the respective CBN branches.
At the official market, the naira depreciated to N1,309.88 against the dollar by the end of Thursday’s trading. This is a 0.10 per cent drop, from the previous rate of N1,308.52 recorded on Wednesday.
A summary of the forex transaction showed that the intra-day high depreciated by N68, closing at N1,435 per dollar from N1,367 per dollar. The intra-day low reduced to N1,100 from N1,098 recorded on Wednesday.
Naira
Meanwhile, Professor Graham Penn, a scholar of International Finance Law, University College London, has called on Deposit Money Banks (DMBs), to pay attention to balance sheet management as this will play a critical role in the Nigerian banking sector as a consequence of the Central Bank of Nigeria’s (CBN) new regime of minimum capital requirements.
He said this at the annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN), when speaking to the theme: ‘Improving Availability of Credit in the Nigerian Real Economy: The Critical Importance of Secondary Market Liquidity.’
Professor Penn, while delivering his speech as guest lecturer at the 2024 annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN), said the most important way that balance management can be achieved is by improving liquidity in the nascent Nigerian secondary debt market, thereby enabling Nigerian banks to diversify the way in which they fund their lending business.
This is just as the net domestic credit in the Nigerian economy surged to N96.1 trillion as at December 2023.Penn said the call for balance sheet management is in the context of capital adequacy, which needs to be carefully managed in order for Nigerian banks to be in a position to provide much-needed debt finance to the real economy.
According to him, DMBs should shift from traditional “relationship” lending that are held until maturity to securitisation.
He said, “CBN need to develop clear regulations governing the balance sheet and regulatory (capital carrying cost) effect of loan transfers for both the buyer and the seller of the loan/asset.
Those regulations need to cover both the transfer of individual loan assets and portfolios of assets in the case of securitisation transactions.”
The post Another Look at Reasons Naira Slumped to N1,420/$ appeared first on Tech | Business | Economy.
