Connect with us

Business

Forex Scarcity Persists As CBN Resumes Intervention

Published

on

…Banks ignore CBN’s directive on domiciliary accounts

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.

Advertisement

Financial Vanguard 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 who spoke to Financial Vanguard 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, according to the Financial Vanguard findings 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.

Advertisement

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.

Advertisement

READ ALSO: Naira Depreciates Further In Investors, Exporters Window.

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.

Advertisement

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.

Advertisement

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 told Vanguard, “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.

Advertisement

READ ALSO: Naira Appreciates by 1.79% At Investors, Exporters Window

“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.

Advertisement

“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.

Advertisement

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.

Advertisement

“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.”

READ ALSO: Naira Float: Nigerian Billionaires Lose $5.85bn — Bloomberg

Advertisement

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.”

Advertisement

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.

Advertisement

“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.”
VANGUARD

Advertisement

Business

FG Offers Up To 16.54% Yield On September Savings Bonds

Published

on

The Federal Government, through the Debt Management Office, is offering investors annual yields of up to 16.541% on its September 2025 Federal Government of Nigeria Savings Bonds.

The DMO, in a circular on its website on Monday, announced that the subscription window opens immediately and will close on Friday, September 5, 2025, with settlement scheduled for September 10, 2025.

Advertisement

Coupon payments will be made quarterly on March 10, June 10, September 10, and December 10 and will be paid directly to investors.

The DMO offered investors two subscription categories of the Federal Government Savings Bond.

READ ALSO:DMO Unveils July FGN Savings Bond As CBN Offers N250bn In Treasury Bills

Advertisement

The first is a two-year bond, which will mature on September 10, 2027, and attracts an annual interest rate of 15.541 per cent.

The second is a three-year bond, set to mature on September 10, 2028, with a higher annual interest rate of 16.541 per cent.

The two-year bond interest rate rose to 15.541% in September 2025, up from 14.401% in August.

Advertisement

Similarly, the three-year bond recorded an increase to 16.541% in September, compared to 15.401% in the previous month.

The FGN Savings Bond programme, launched in 2017, aims to deepen the domestic bond market, promote financial inclusion, and give retail investors access to secure, low-risk government securities.

READ ALSO:Family Kicks As UK Varsity Sacks Nigerian Grandmother

Advertisement

Each bond unit is priced at ₦1,000, with a minimum subscription of ₦5,000 and additional subscriptions in multiples of ₦1,000. Individual investors can subscribe up to ₦50 million.

On the status of FGN Savings Bonds, DMO noted it “qualifies as securities in which trustees can invest under the Trustee Investment Act; Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors.

“Listed on The Nigerian Exchange Limited (and); qualifies as a liquid asset for liquidity ratio calculation for banks.”

Advertisement

The office said the bond is “backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.”

Advertisement
Continue Reading

Business

NNPCL Reduces Fuel Price After Dangote Refinery’s Adjustment

Published

on

The Nigerian National Petroleum Company Limited has reduced its premium motor spirit pump price on Thursday, according to DAILY POST.

It was confirmed that NNPCL retail outlets in the Federal Capital Territory, Abuja, have reduced their pump price to N890 per litre from N945.

Advertisement

This new fuel price has been reflected in NNPCL retail outlets such as mega station Danziyal Plaza, Central Area, Wuse Zone 4, Wuse Zone 6, and other of its filling stations in the nation’s capital.

READ ALSO:N5bn Damage: NNPCL Secures Appeal Court Victory Against Ararume

The latest downward review of fuel price in NNPCL outlets represents an N55 reduction in fuel pump price.

Advertisement

It was reduced to N890 per litre this afternoon, down from N945,” an NNPCL fuel attendant told DAILY POST anonymously on Thursday.

This comes a Nigerian filling station, MRS Empire Energy, on Thursday adjusted their fuel pump price to N885 and N946 per litre, down from N910 and N955 per litre.

The latest fuel price reduction trend is unconnected to Dangote Refinery’s ex-depot petrol price adjustment by N30 to N820 per litre from N850 and the price of crude oil in the international market.

Advertisement

 

Advertisement
Continue Reading

Business

Dangote Refinery Reduces Fuel Price

Published

on

Dangote Petroleum Refinery has announced a reduction in the ex-depot (gantry) price of Premium Motor Spirit, PMS, commonly known as petrol, by N30, from N850 to N820 per litre, effective from August 12, 2025.

This was disclosed in a statement by the company’s spokesman, Anthony Chijiena, on Tuesday.

Advertisement

The 650,000-barrel-per-day plant said the move is part of its unwavering commitment to national development, assuring the public of a consistent and uninterrupted supply of petroleum products.

READ ALSO:Dangote Refinery Gets New CEO

In line with our dedication to operational excellence and sustainable energy solutions, Dangote Petroleum Refinery will commence the phased deployment of 4,000 CNG-powered trucks for fuel distribution across Nigeria, effective August 15, 2025,” said Chijiena.

Advertisement

The announcement comes as the refinery prepares to commence direct fuel distribution nationwide. The development is expected to lead petroleum product marketers to reduce their pump prices in the coming days.

In Abuja, the retail fuel price stood between N885 and N970 per litre as of Tuesday evening.

Advertisement
Continue Reading

Trending