The Nigerian naira, on Wednesday, weakened to N707 a dollar at the parallel section of the foreign exchange market.
The figure represents N42 or 7.45 per cent depreciation compared to the N658 it traded last week — further losing value against the dollar.
Street traders said the free fall resulted from the lingering foreign exchange (FX) supply constraints.
With a profit margin of N17, the traders put the buying price at N690 and the selling price at N707.
This is even as the Central Bank of Nigeria (CBN) has often maintained that the parallel market is not the true reflection of the naira.
The difficulties getting dollars from the official market, make the option of the black market an important source to access forex.
Meanwhile, at the official market, FMDQ securities reports that Naira closed Wednesday trading at N436.50 to a dollar reversing the 0.10 per cent gain recorded on Tuesday.
The depreciation of the local currency comes as forex supply to the investors and importers window dropped to $65.95 million from $83.71million recorded on Monday.
The latest exchange rates imply that the disparity between the black and official markets now stands at N270.5.
Nigeria Considers China’s C919 Plane For New Airline
Nigeria would consider buying China’s newly-certified C919 passenger jet as it grows the country’s fledgling carrier, Nigeria Air to 30 planes by around 2025, Aviation Minister Hadi Sirika said on Saturday.
Sirika said the new airline would have a mixture of Airbus (AIR.PA) and Boeing (BA.N) planes, but added the carrier is also willing to look at the Chinese narrowbody jet, which Chinese regulators certified on Friday.
“We haven’t looked at that C919. But if it’s as good as the others then why not,” he said on the sidelines of the United Nation’s aviation agency’s triennial assembly in Montreal, Canada.
On Friday, China hailed the development of its first medium-haul passenger jet as the embodiment of the country’s drive towards self-sufficiency, with safety approval awarded to a plane that aims to challenge Western aircraft giants for orders.
The first C919 aircraft, designed to compete with popular single-aisle models made by Airbus and Boeing, will be delivered by the end of the year, state Xinhua News Agency said.
It remains unclear when the plane might be certified by the United States or Europe, opening the way to sales in most foreign markets, but industry analysts say it will be up to a decade before China can seriously tackle the existing Boeing-Airbus duopoly.
“China and Nigeria (have a) very cordial and friendly relationship with mutual benefits,” Sirika said.
For decades, China has loaned billions of dollars to Africa to build railroads, power plants and highways as it deepened ties with the continent while extracting minerals and oil.
Nigeria, Africa’s most populous nation, is the top importer of Chinese goods, hoovering up $23 billion worth in 2021.
Nigeria’s poor transport and power networks have stymied economic growth for decades, holding back the distribution of wealth in Africa’s biggest economy where 40% of people live below the national poverty line.
However, the country is growing its aviation sector, where traffic is now above pre-COVID-19 pandemic levels, Sirika said. The airline is one of President Muhammadu Buhari’s 2015 election campaign promises. (REUTERS)
Naira Collapses To N730/$ At Parallel Market
The Nigerian naira has collapsed to a new record low, trading at a minimum of N730/$1 on Thursday morning at the open market, a 0.69 percent drop from the previous day.
This is according to information from the black market operators interviewed on Thursday.
According to the traders, the fall can be attributed to the continuous scarcity of forex and increased demand in the market.
The fall in the exchange rate is following the move by the apex bank to raise the interest rate to a 20-year high of 15.5%, representing 150 basis points increase from the 14% stated at the previous MPC meeting.
The rate at N730/$1 is the highest on record, while traders told Nairametrics Research that they sell dollars for as high as N735/$1 and buy between N725/$1 and N730/$1.
Today marks exactly 14 months since the CBN discontinued the sale of forex to Bureau De Change operators, and the naira has been on a free fall since then, with liquidity tightening in the market.
A cursory look at the data tracked by Nairalytics, the exchange rate was trading at N518/$1 before the ban and has depreciated by a margin of N212/$1 in a little over a year.
Similarly, at the peer-to-peer cryptocurrency exchange, the exchange rate fell to N735/$1 against the US dollar on Thursday morning from N733.4/$1 recorded in the previous session.
The exchange rate at the official Investors and Exporters window closed at N436.37/$1 on Wednesday, 28th September 2022, a slight depreciation of 0.01% as against N436.33/$1 recorded on Tuesday, 27th September 2022.
A total of $119.49 million in FX value was traded at the official market on Wednesday, which is 20.17% higher than the $99.43 million that exchanged hands on Tuesday.
So far during the week, a total of $297.02 million has been traded at the official market, edging towards the $524.35 million that was traded in the previous week.
The Central Bank has been able to maintain the stability of the currency in the official market by constant intervention, which has helped the country’s foreign reserves.
According to the data from the CBN, Nigeria’s foreign reserve has already lost over $2 billion year-to-date to stand at $38.36 billion, from over $40 billion recorded as of the end of last year.
World Bank Launches Pandemic Trust Fund, Confirms Extreme Challenges In Developing Countries
The World Bank Group has launched a new trust fund for Pandemic Prevention, Preparedness, and Response (PPR).
The President, David Malpass said the United States-backed support will assess and strengthen health preparedness throughout the developing world.
The economic expert delivered a speech on Thursday at the Stanford Institute for Economic Policy Research (SIEPR) ahead of the 2022 WBG-IMF Annual Meetings.
Noting that a tough reality confronts the global economy, Malpass said a series of harsh events and unprecedented macroeconomic policies are throwing development into crisis.
The chief assured of World Bank’s commitment to alleviate poverty and boost shared prosperity, announcing that support for developing countries, especially for climate-related finance, reached $31.7billion in 2022.
He hinted that the Group’s upcoming Poverty and Shared Prosperity report suggests that the deterioration in development progress began well ahead of the COVID-19 pandemic.
Malpass noted that developing countries were facing an extremely challenging near-term outlook due to the shocks in recent years.
The factors include higher food, fertilizer and energy prices, rising interest rates and credit spreads, currency depreciation, and capital outflows.
Malpass said global energy production may take years to diversify away from Russia, prolonging the stagflation highlighted in the World Bank’s Global Economic Prospects.
“Many developing countries are also struggling in governance and rule of law; debt sustainability; climate adaptation and mitigation; and limited fiscal budgets to counteract the severe reversals in development from the COVID-19 pandemic.
“The pandemic – which alone led to over six million deaths – geopolitical conflicts, and extreme weather events have hurt countries and people worldwide, with the poor bearing the brunt, especially women and girls.”
“Developing countries are being hit by more severe climate-related disasters. Man-made greenhouse gas emissions are causing climate change, which in turn is having tragic impacts on development.”
“Adaptation by countries and people harmed by climate change and mitigation of greenhouse gas emissions are urgently needed,” the President added.
Stressing that the urgency is clear in daily news reports of inflation, climate change, famine, civil protests, and violence, Malpass said the World Bank is fully engaged in the challenges and eager to work on solutions.
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