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CBN cracks down on currency speculators

Nigerian currency traders are refusing to show rates to sell the U.S. dollar after the CBN vowed to crack down on speculators.

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Naira Exchange Rate

Nigerian currency traders are refusing to show rates to sell the U.S. dollar after the Central Bank of Nigeria (CBN) last week vowed to crack down on speculators in a bid to stop the Naira from depreciating, traders said yesterday.

The CBN recently announced it was collaborating with the Nigerian Financial Intelligence Unit (NFIU) to uncover speculation and would charge such dealers for economic sabotage. The bank added that market fundamentals did not support devaluation.

The Naira has been easing on the over-the-counter market on fears of a possible devaluation in the wake of an oil price collapse that has worsened dollar shortages in Africa’s biggest economy.

The currency was quoted at N370 per dollar a week ago versus N366.5 two weeks earlier. On the black market, the Naira traded at 375 while it steadied at 307 on the official market supported by the CBN.

[READ MORE: CBN suspends forex sales to BDC operators till further notice)

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Traders were willing to buy dollars between N368 and N370 on the OTC Market but there were no sellers, as liquidity was tight and traders were weighing CBN’s threat.

Foreign exchange market, Nigeria’s fixed income & money market update ending 13th March, 2020, Why the strong dollar is giving Nigeria headache

JP Morgan Chase analysts have said they expect the Naira to be devalued by around 10% to 400 Naira per dollar by the end of June.

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Meanwhile, Nigeria’s intelligence service has been asked to clamp down on money-changers and black-market currency dealers in a bid to defend the Naira.

Dealers, who trade at an exchange rate weaker than N400 per dollar, face arrest and prosecution from the State Security Service, according to Aminu Gwadabe, President of the Association of Bureau de Change Operators of Nigeria. Foreign-exchange bureau agreed “to control the market so we will have sanity” and they have the “backing” of the central bank on the new rates, he said by phone from Lagos, the commercial centre.

The Naira strengthened to around N400 per dollar on the black market from 460 on Thursday.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Featured Financial Market Analysis for a Fortune Global 500 Company. Member of the Chartered Financial Analyst Society. Follow Olumide on Twitter @tokunboadesina or email [email protected]

1 Comment

1 Comment

  1. Oluolub

    March 27, 2020 at 12:41 pm

    When Naira become 1000naira to a dollar Association of Bureau de Change Operators and their cohort speculator would hopefully rest. They may have dollars and business powers today but their children would definitely not have same level of opportunities. Their children will spend Naira. Greeeed!!! This government has lost realities of global economic management. They don’t mind the multiplier effects of Naira devaluation on common masses otherwise why this free fall of Naira? You devalued naira and making running abroad more lucrative. Surely you will all be held accountable one day.

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Coronavirus

Covid-19: African Union in talks with China and Russia over vaccine

The AU and Africa CDC have revealed that they have reached out to both China and Russia over the possibility of vaccine partnerships.

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Covid-19: African Union in talks with China and Russia over vaccine

The Africa Centres for Disease Control and Prevention and the African Union announced they have been in talks with China and Russia over the possibility of vaccine partnerships to ensure that Africa is not left behind when vaccines become available.

This was disclosed by John Nkengasong, Africa CDC Chief, at the Bloomberg Invest Africa online conference.

READ: Covid-19: Pfizer to file for emergency authorization for its vaccine, reaches safety milestone

Mr. Nkengasong said that Africa would not limit itself to only one vaccine partner and that Africa was willing to work with as many partners as possible to provide a vaccine for its 1.2 billion people.

“We are not limiting ourselves to any particular partner. As a continent of 1.2 billion people, we are willing to work with any partner who adheres to our strategic plan for vaccine development and access in Africa.

“The continent is taking the access and development of vaccine very, very seriously. We really need to see clinical trials being done on the continent, so they address issues like background infections from other diseases.”
He disclosed that the Africa CDC resumed talks last week with China, to discuss partnerships with Chinese Drug Manufacturers and also clinical trials in Africa. He added that Russia has been approached with a similar plan.

He said that the WHO Covax programme only covers 20% of the population, but Africa will need 60% of its population vaccinated to achieve herd immunity.

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There are multiple avenues being explored now to make sure Africa has the appropriate doses of vaccines and also that we have that in a timely fashion, not in a delayed manner,” Nkengasong said.

He revealed that the AFREXIM Bank agreed to finance vaccine procurement with $5 billion and is waiting to see how much it will receive from World Bank’s $12 billion vaccine procurement fund for developing nations.

READ: COVID-19: G-20 to extend debt relief to developing nations

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What you should know 

Nairametrics reported earlier this month that Pfizer Inc. disclosed that its experimental vaccine, which is jointly developed with BioNTech, was more than 90% effective in preventing COVID-19, based on initial data from a large study in the ongoing phase 3 trials.

(READ MORE: COVID-19: AstraZeneca vaccine could be 90% effective against the virus)

Last week, a pharmaceutical company, Moderna Inc., stated that its COVID-19 vaccine was 94.5% effective in treating coronavirus, after preliminary analysis of a large late-stage clinical trial.

The G-20 nations also announced a pledge to pay for vaccine distribution to developing nations that could not afford it. The leaders also unveiled a debt extension programme to developing nations during the weekend’s G-20 summit.

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The Federal Government of Nigeria also announced through the Ministry of Health, that it would inaugurate an 18-man Covid-19 Vaccine Task Team, in a bid to ensure vaccine security In Nigeria.

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Coronavirus

Covid-19: EU considers skipping vaccine patents to boost vaccine access

The EU has disclosed plans to increase its access to Covid-19 vaccines by offering financial incentives to vaccine production companies.

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AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

The European Union (EU) says its planning emergency measures to increase its access to Covid-19 vaccines including sidestepping patent rights and offering financial incentives to vaccine production companies to move production to Europe.

This was revealed in an EU document on Wednesday and reported by Reuters. The Document says the EU may create an emergency coordination mechanism to be issued at short notice when the EU needs a vaccine license, which is different from fully patent waivers, discussed in the WTO last week.

READ: COVID-19: EU to buy up to 300million doses of BioNTech-Pfizer’s COVID-19 vaccine

The EU says the new move will ensure faster procedures during a pandemic, which will enable generic production in the EU without the consent of patent holders.

The Commission sees the need to ensure that effective systems for issuing compulsory licenses are in place, to be used as a means of last resort and a safety net, when all other efforts to make IP (intellectual property) available have failed,” the EU’s document said.

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READ: COVID-19 boosts Fidson Healthcare Plc’s Q2 2020 performance

The EU’s actions may be triggered by its inability to access the antiviral drug, remdesivir, during the pandemic, as the United States ordered most of the stock.

READ: U.S dollar drops, Currency traders fear increasing COVID-19 caseloads

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The EU also disclosed that it will begin a consultation process with pharmaceutical companies next year to address issues in its pharmaceutical value chains. They added that measures could be imposed to encourage manufacturers to move pharmaceutical production to Europe from China and India.

“The Commission calls on member states to ensure that the tools they have are as effective as possible; for instance, by putting in place fast-track procedures for issuing compulsory licenses in emergency situations,” the EU said.

READ: COVID-19: Vaccine Alliance says vaccine might cost a maximum of $40 per dose

They added that it is urgent “to assess whether manufacturing capacity for certain critical medicines may be required in the EU.”

“We need to be able to rely on ourselves, not on others,” the Commission’s Vice President, Margaritis Schinas said. He disclosed that the EU is working on more compliance with drug supply need and increased stock levels by 2022.

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What you should know

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This comes as surprise considering the EU rejected a World Trade Organization (WTO) proposal last week to waive the intellectual property rights needed for the manufacturing of Covid-19 vaccines. The waiver would have made the vaccine access cheaper for developing nations.

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ENDSARS

#EndSARS Sanctions: Nigeria has reached out to the UK Government – Foreign Minister

Onyeama has stated that the FG has reached out to the UK Government over the parliamentary debate on the #EndSARS protests.

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#EndSARS Sanctions: Nigeria has reached out to the UK Government - Foreign Minister, Chinese Visa Restriction: Ministry of Foreign Affairs issues clarification, London evacuation flight rescheduled to July 14

The Minister of Foreign Affairs, Mr Geoffrey Onyeama, said that the Nigerian Government has reached out to the UK Government over the parliamentary debate on the #EndSARS protests.

The Minister disclosed this to Newsmen at the Federal Executive Council (FEC) meeting on Thursday, which was recorded by Channels TV.

READ: Gov. Makinde presents N266 billion budget to Oyo State House of Assembly

He added that the UK Parliament did not speak for the UK government, and that the UK had heard the Nigerian government’s side regarding the incident at Lekki.

READ: FG reacts to CNN report, describes Lekki shooting as massacre without bodies

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“On the issue of the UK parliament, yes, we have reached out to the UK government on this question. The meeting that took place was of Parliamentarians, they don’t speak for the UK government and the UK government which acts for the United Kingdom has also heard the side of the (Nigerian) government regarding everything that happened.

READ: #EndSARS: Bankers’ Committee, Private sector lead Lagos rebuilding team to raise trust fund

“So we are in touch with them and engaging with them. But, of course, as in any democracy, the Members of Parliament are able to also air their views, but what is important is that a balanced picture is made available to them all before they take any decision,” Onyeama said.

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READ: DPR approves new Liquefied Petroleum Gas guidelines for investors, operators

What you should know 

Nairametrics reported earlier this week that the British Parliament had announced it would consider a petition by some groups and individuals, asking it to apply sanctions against the Nigerian government and officials for alleged human rights violations during the #EndSARS protest and Lekki shooting incident.

Also, the presidency earlier disclosed that the Vice President, Yemi Osinbajo, had a meeting with the UK Special Envoy for Humanitarian Affairs, Nick Dyer, accompanied by the UK High Commissioner to Nigeria.

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