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CBN to “introduce” uniform exchange rate for naira

The Central Bank of Nigeria (CBN) has decided to collapse the multiple exchange rate policy which was used to determine the value of the Naira and move to a single exchange rate policy.

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The Central Bank of Nigeria (CBN) is allegedly planning to collapse the multiple exchange rate policy of the CBN moving to a single exchange rate policy. This is according to sources from the bank.

Some inside sources who want to remain anonymous disclosed that the country will merge the official rate, the rate for bureau de change (BDC) operators, the rate for importers and exporters, and some others.

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A senior central bank official who does not want to be identified, said, ‘Today we allowed the rate at the importer and exporters (I&E) window to adjust in response to market developments’

The CBN official admitted that in today’s transaction, that it had adjusted the rate at the I&E window for foreign investors from N366 per dollar to N380 per dollar.

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READ MORE: Foreign investors shun CBN as latest OMO bills record zero bids

Some economic and financial experts including global financial institutions like the International Monetary Fund (IMF) have been very critical of the multiple exchange rate system which has been operational in Nigeria. The country has been operating this system which pegged the official rate at about N305 per dollar, in a bid to control demand for dollars.

Government businesses and some selected priority companies like importers of petrol usually benefit from the supply of cheap foreign exchange. However, the CBN created an importer and exporter window in 2017 as a reaction to the economic recession in 2016, providing a market where forex can be traded at market-determined prices.

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The single exchange rate has been identified as a very effective tool for resource allocation. Analysts are of the opinion that the multiple exchange rate can be subject to abuse and manipulation, possibly aiding corruption.

Patricia

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

11 Comments

11 Comments

  1. Olalekan Johnson.

    March 21, 2020 at 9:11 am

    When it is time for election in Nigeria, Nigeria politicians will always do all it’s takes to be in that particular seat being contested for, and when they’ve finally achieved their aim; then they will be saying it is not easy, it is not easy. Nigerians please don’t be deceived. Fellow Nigerians please don’t be deceived. Our leaders know what should be done to make Nigeria better; but they failed to do it. Please!!.

  2. Olalekan Johnson.

    March 21, 2020 at 9:12 am

    When it is time for election in Nigeria, Nigeria politicians will always do all it’s takes to be in that particular seat being contested for, and when they’ve finally achieved their aim; then they will be saying it is not easy, it is not easy. Nigerians please don’t be deceived. Fellow Nigerians please don’t be deceived. Our leaders know what should be done to make Nigeria better; but they failed to do it. Please!!. The wise knows and the foolish also know he is foolish!!!.

    • Anonymous

      March 21, 2020 at 10:20 am

      Maybe you had an encounter with one of them??. Why so pissed?. Nigerian leaders have always been bad.. it’s no surprise but then among the bad ones lie the good ones who are not even given any chance.. Nigerian politics can never be meaningful

    • Elizabeth Adenike Kentebe

      March 21, 2020 at 11:33 am

      If by having uniform exchange rate, Nigeria and Nigerians will benefit. I go for it. I am really surprised that when dollar is falling all over the world, dollar keep on rising in Nigeria. Please I am begging people that are suppose to do things right to fear God.

      • Anonymous

        March 22, 2020 at 9:22 am

        Dollar is not rising. Naira is falling

  3. Momoh-Bello Isah

    March 21, 2020 at 4:00 pm

    I hope this move will benefit and boost Nigeria economy

  4. Ben Davis

    March 21, 2020 at 7:27 pm

    Why is Our leaders so selfish at the expense of our dear Country Nigeria? Over 15 years Dstv multi Choice has conveniently been extorting the Nigerian Masses yet Our Govt did nothing about it, is it new to our Govt that other African Countries like Kenya, Mozambique, Ghana etc are operating on pay per view package ? After they’ve connive with multi Choice to embezzle enough and something’s went wrong hence suddenly they realise that Multi Choice is Extorting from Nigerians, who is fooling who Nigeria Government?

  5. Saheed Akinyemi

    March 21, 2020 at 10:24 pm

    If u.s dollars are falling globally and the same currency is getting high in Nigeria that’s shows that we don’t have a good economy the so called leaders or rulers cares most about themselves and their family only they leave the masses at a peril, ordinary Nigeria are not helping neither

    • Olu

      March 22, 2020 at 10:04 am

      Your comments are correct about our leaders, however, the exchange rate is determined by the market which the govt has no control over. The issue of multiple exchange rate wasn’t a good idea and thankfully it’s now been adjusted to a single rate which will plug some holes that the privileged have been taking advantage of in the last few years.

      The Naira will fall as a result of the fall in oil prices because the country (Nigeria) now earns less than 50% of what it was earning in USD about a month ago. Furthermore, it is not correct that the USD is falling globally, infact, it is getting stronger as the demand for the USD is stronger in times like this as the currency of choice to back up your reserve. An example is the case of the sterling which has dropped significantly vs USD in the last couple of weeks – so also are other currencies

  6. Imo-owo J. Akpan

    March 21, 2020 at 10:50 pm

    We Nigerians are following the CBN’ s Single rate Policy , we Thank you our Dear CBN Governor God will Bless you in Jesus Name Amen.

  7. Anonymous

    March 23, 2020 at 2:48 pm

    This not good at all we have many problems to deal with not this one .

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Financial Services

CBN gives approval for Stirling Trust to start offering cash-in-transit services

Stirling Trust Company Limited specialises in financial services, investment, logistics & human capital management services.

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CBN sandbox operations, Stirling Trust Company Limited

The Central Bank of Nigeria (CBN) has approved Stirling Trust Company Limited’s bid to commence cash-in-transit operations in the country.

The approval, which became effective in April this year, was just recently announced by the apex bank in a circular that was signed by the Director of Currency Operations Department, Ahmed B Umar, and addressed to all deposit money banks as well as all licensed CITs and CPCs in the country.

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The circular also encouraged all respective stakeholders to “assist” Stirling Trust Company Limited in the discharge of their new duty. The circular said:

“Please be informed that Stirling Trust Company Limited has been granted approval by the Central Bank of Nigeria (CBN) to commence Cash-in-Transit operations in Nigeria with effect from April 23, 2020.

“kindly accord Stirling Trust Company Limited all necessary assistance in the discharge of their functions as Cash-in-Transit service provider.”

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Stirling Trust Company Limited, which is a Lagos-based company incorporated in 1989, specialises in financial services, investment, logistics & human capital management services. Following its newest license, the company will now utilise its state-of-the-art armored vehicles (bullion vans) to transport cash across the country. Already, Stirling Trust Company Limited has a notable list of clientele which include First Bank of Nigeria Limited.

It should be noted that cash-in-transit operation is very critical to the Nigerian economy, as cash needs to be constantly moved around in order to keep the economy running.

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Appointments

Segun Agbaje elected into PepsiCo Board of directors

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GTB releases FY result for 2019, grows PBT by 7.5%

Segun Agbaje, the Managing Director of Guaranty Trust Bank of Nigeria has been elected as an independent member of the Board of Directors of PepsiCo, the American owners of popular beverage Pepsi and Moutain Dew.

According to the press release seen by Nairametrics, the Board of Directors elected Segun Agbaje as an independent member of the Board. Mr. Agbaje, 56, will join the Board and the Audit Committee effective July 15, 2020.

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In his remark, Pepsico Chairman and CEO Ramon Laguarta expressed delight in welcoming Mr. Agbaje to the Pepsico Board.

“Segun is a well-respected and proven business leader with a deep understanding of complex businesses and fast-growing markets, particularly Sub-Saharan Africa where we recently acquired Pioneer Foods as part of our strategy to expand in the region. His experience in business transformation and passion for delivering consumer value will serve PepsiCo well as we continue our journey to be the global leader in convenient foods and beverages by winning with purpose.”

PepsiCo recently acquired Pioneer Foods, makers of Butterfield Bread. Pioneer Foods also acquired a major stake in Food ConceptPioneer, a leading baked goods company. Food Concepts are also the owners of the popular Chicken Republic quick-service restaurant chain in Nigeria.

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The Chair of PepsiCo’s Board’s Nominating and Corporate Governance Committee, Daniel Vasells remarked,

“We look forward to Segun joining the PepsiCo Board and to the valued global perspective he will add to our team..His knowledge and experience of embracing and scaling new technologies and critical capabilities will be valuable as we continue to invest in opportunities that create shareholder value and deliver long-term sustainable growth.”

Segun Agbaje also currently serves as a director of MasterCard Advisory Board Middle East and Africa. He holds a Bachelor of Science in Accounting and a Masters in Business Administration from the University of San Francisco.

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Economy & Politics

NCC creates digital economy department to harness technology in Nigeria

The commission announced that its Governing Board had approved the creation of the new department.

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NCC orders immediate suspension of USSD charges by telcos, 5G Network to undergo 3 months trial before approval - NCC , NCC licenses 20 new Internet service providers amidst challenges , 150 million Nigerians risk being defrauded – NCC , NCC warns telcos against cyber fraudsters , NCC rolls out new regulations on drone use, NCC licenses 10 new VAS providers as it projects market to hit $500 million , NCC, Infracos set to develop broadband infrastructure with N265 billion raise , Telecommunications: Broadband penetration set to grow, Telecoms operators fined N2.9 billion over infractions , NCC reacts to claims that minister chased away diaspora commission staff from office complex

The Nigerian Communications Commission (NCC) has approved the creation of a Digital Economy Department, which will be responsible for promoting the digital economic agenda of the federal government.

Among other things, this department will renew the commission’s strategy for delivering its programmes and policies, and give the necessary push to promote the national digital economy.

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In a press release signed by the Director, Public Affairs, Dr. Ikechukwu Adinde, and published by NCC on Tuesday evening, the commission announced that its Governing Board had approved the creation of the new department which would be structurally under the Office of the Executive Vice Chairman/CEO of NCC.

According to the Executive Vice Chairman, Prof. Umar Danbatta, the decision to place the newly-created department under the Office of the EVC also underscores the “importance the Commission places on the need to successfully drive the overall national digital economy strategy of the government through ensuring its effective monitoring and supervision.”

All staff members of the Special Duties Department are to move to the newly-created Digital Economy Department. which will be headed by Engr. Babagana Digima, an Assistant Director in the Special Duties Department who will now serve as pioneer Head of the new department.

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Danbatta noted that the department would be guided by the eight pillars of the National Digital Economy Policy and Strategy (NDEPS) document, the Broadband Implementation Unit in the Commission.

The eight pillars contained include: Developmental Regulation; Digital Literacy and Skills; Solid Infrastructure; Service Infrastructure; Soft Infrastructure; Digital Services Development and Promotion; Digital Society and Emerging Technologies; and Indigenous Content Development and Adoption.

The NDEPS was unveiled in November 2019 by President Muhammadu Buhari as a guide for the national digital economy which will lead to the Economy Recovery and Growth Plan (ERGP).

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