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Currencies

CBN to sanction banks, BDCs for rejecting old, smaller denomination of US dollars

The CBN cautioned forex dealers to desist from defacing or stamping dollar banknotes as such notes always failed authentication tests during sorting.

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The Central Bank of Nigeria (CBN) has ordered Deposit Money Banks (DMBs) and Bureau De Change (BDC) operators to, henceforth, accept from their customers, old and lower denomination of US dollars as legal tender or face sanctions.

This follows numerous complaints from members of the public on the rejection of old/lower denominations of the dollar by these banks and other authorised forex dealers.

The CBN directive is contained in a circular signed by its Director for Currency Operations Department, Mr Ahmed Umar.

Umar, in his statement, said that the apex bank had been faced with complaints of the rejection of old/lower denomination US dollar deposits in the banks, adding that the CBN would sanction any of the banks or forex dealers, who failed to accept such denominations from their customers.

READ: CBN to support maize farmers, projects 12.5 million metric tons in 18 months

What the CBN’s Director of Currency Operations is saying

Ahmed said, “The CBN has, in recent times, been inundated with complaints from members of the public on the rejection of old/lower denominations of the US dollar bills by DMBs and other authorised forex dealers. All DMBs and authorised forex dealers should, henceforth, accept both old series and lower denominations of USD that are legal tender for deposit by their customers.

READ: CBN raises alarm over fake tweet posts on N50 billion COVID-19 fund

“The CBN will not hesitate to sanction any DMB or other authorised forex dealers who refused to accept old series or lower denominations of the USD bills from their customers,” he warned.

He also cautioned forex dealers to desist from the habit of defacing or stamping dollar banknotes as such notes always failed authentication tests during sorting.

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]

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    Currencies

    Naira appreciates across forex markets as dollar supply improves by 38%

    The naira appreciated at the parallel market to close at N483/$1 on Friday, representing a N2 gain compared to N485/$1 recorded on Thursday.

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    on

    FOREX, Dollar scarcity worsens as exchange rate falls to N472/$1 at black market , Naira falls to N460/$1 as CBN intervention fails to contain speculation

    Friday, 7th May 2021: The exchange rate between the naira and the US dollar closed at N410.33/$1 at the Importers and Exporters window, where forex is traded officially.

    Naira appreciated against the US dollar to close at N410.33 to a dollar on Friday, 7th May 2021, representing a 67 kobo gain when compared to N411/$1 that was recorded on Thursday, 6th May 2021.

    Also, the naira appreciated at the parallel market as it closed at N483/$1, representing a N2 gain when compared to N485/$1 that was recorded on Thursday, May 6, 2021, as forex market liquidity improved by 38%.

    Trading at the official NAFEX window

    The naira appreciated against the US dollar at the Investors and Exporters window on Friday to close at N410.33/$1, representing a 67 kobo gain when compared to the N411/$1 that was recorded on Thursday.

    • The opening indicative rate closed at N410.34 to a dollar on Friday, 7th May 2021, representing a 2 kobo gain when compared to the N410.37/$1 recorded on Thursday.
    • Also, an exchange rate of N437.41 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.33/$1. It, however, sold for as low as N400/$1 during intra-day trading.
    • Forex turnover at the Investor and Exporters (I&E) window rose by 37.8% on Friday, 7th May 2021.
    • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $106.34 million recorded on Thursday, 6th May 2021 to $146.52 million on Friday, 7th May 2021.

    Cryptocurrency watch

    Bitcoin, the world’s most popular cryptocurrency, slumped by 1.52% as of Sunday evening to trade at $57,951.21.

    • An amount of 12,354 bitcoins was recently withdrawn from Coinbase totalling over $700 million. The massive outflow could be related to institutional investors.
    • Large financial institutions have started offering bitcoin custody services to their clients.
    • Recently, American multinational investment bank Morgan Stanley began offering BTC custody to clients. Goldman Sachs also recently announced that clients would be able to invest in bitcoin.
    • Ethereum recorded a growth of 1.43% to close at $3,923.43, reaching an all-time high.
    • Meanwhile, payments giant Visa and financial services provider TALA have partnered to boost cryptocurrency adoption in emerging markets.
    • This partnership is aimed at easing the process of converting, storing and using cryptocurrencies by underbanked consumers.

    Crude oil price stalls

    Crude oil prices moved towards $70 as the oil markets remain optimistic with strong bullish sentiments as summer approaches.

    • Brent Crude rose by 0.28% on Sunday evening to close at $68.28 compared to its closing price of the previous day’s trading session.
    • The WTI rose by 0.29% on Sunday to close at $64.90, Bonny light crude dropped by 0.43% to close at $66.82, while the OPEC basket rose by 2.29% to close at $68.20.
    • Oil prices recorded a weekly gain against the backdrop of optimism over a global economic recovery, despite the Covid-19 crisis in India which is biting hard.
    • In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

    External reserve

    Nigeria’s external reserve plunged for the 13th consecutive day on Thursday, 6th May 2021 as it dropped by about $22 million to close at $34.74 billion.

    • The nation’s foreign reserve declined from $34.76 billion recorded as of Wednesday, 5th May 2021 to $34.74 billion on Thursday, representing a 0.63% decline.
    • Nigeria’s foreign reserve has dipped $519.36 million since 16th April 2021 to date.
    • Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN extends its naira 4 dollar initiative.

    Continue Reading

    Currencies

    Naira falls against US dollar as CBN extends Naira4dollar scheme indefinitely

    The exchange rate between the naira and the US dollar, closed at N411/$1 at the I&E Window.

    Published

    on

    Thursday, 6th May 2021: The exchange rate between the naira and the US dollar, closed at N411/$1 at the Importers and Exporters window, where forex is traded officially.

    Naira fell against the US dollar to close at N411 to a dollar on Thursday, 6th May 2021, representing a 50 kobo decline when compared to N410.5/$1 that was recorded on Wednesday, 5th May 2021.

    Meanwhile, the naira maintained stability at the parallel market as it closed at N485/$1, while Nigeria’s external reserve plunged $28.94 million to close at $34.76 billion on Wednesday, 5th May 2021.

    Also, the apex bank issued an indefinite extension to its Naira4dollar scheme for foreign remittances, which was introduced some months ago. This is aimed at sustaining the country’s foreign exchange market liquidity.

    READ: Naira gains at NAFEX window as dollar supply improves by 305%

    Trading at the official NAFEX window

    The naira depreciated against the US dollar at the Investors and Exporters window on Thursday to close at N411/$1, representing a 50 kobo decline when compared to the N410.5/$1 that was recorded on Wednesday.

    • The opening indicative rate closed at N410.37 to a dollar on Thursday, 6th May 2021, representing a 12 kobo depreciation when compared to the N410.25/$1 recorded on Wednesday.
    • Also, an exchange rate of N420.9 to a dollar was the highest rate recorded during intra-day trading before it settled at N411/$1. It, however, sold for as low as N400/$1 during intra-day trading.
    • Forex turnover at the Investor and Exporters (I&E) window declined by 38.4% on Thursday, 6th May 2021.
    • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover decreased from $172.52 million recorded on Wednesday, 5th May 2021 to $106.34 million on Thursday, 6th May 2021.

    READ: Exchange rate depreciates at NAFEX window as Bitcoin slumps by over 5%

    Cryptocurrency watch

    Bitcoin, the world’s most popular cryptocurrency, slumped by 2% on Thursday to trade at $56,358.03.

    • As of 11:31 pm on Thursday, the highly valued cryptocurrency asset witnessed a decline despite soaring as high as 5.5% on Wednesday.
    • However, Ethereum recorded a marginal growth of 0.07% to close at $3,530.75, capitalising on the 9.1% gain recorded in the previous day.
    • The total crypto market capitalisation depreciated by 0.53% to close at $2.33 trillion on Thursday.
    • Meanwhile, payments giant, Visa and financial services provider TALA have partnered to boost cryptocurrency adoption in emerging markets.
    • This partnership is aimed at easing the process of converting, storing and using cryptocurrencies by the underbanked consumers.

    READ: Naira depreciates as dollar sales top $100m a day at I&E window

    Crude oil price stalls

    Crude oil prices witnessed a bearish trading session on Thursday, 6th May 2021 as the oil price rally stalled due to the worsening covid-19 crisis in India.

    • Brent Crude dipped by 0.97% on Thursday to close at $68.29 compared to its closing price of $68.96 recorded at Wednesday’s trading session.
    • The decline in oil prices, which cut short the rally to $70 a barrel was due to a fresh record of new daily coronavirus cases reported by the third-largest importer of oil in the world.
    • Also, according to energy analytics firm OilX, China’s crude oil imports fell by 11% in April 2021 to stand at 10.41 million barrels per day.

    External reserve

    Nigeria’s external reserve plunged for the 12th consecutive day on Wednesday, 5th May 2021 as it dipped $28.91 million to close at $34.76 billion.

    • The nation’s foreign reserve declined from $34.79 billion recorded as of Tuesday, 4th May 2021 to $34.76 billion on Wednesday, representing a 0.28% decline.
    • Nigeria’s foreign reserve has dipped $497.36 million since 16th April 2021 to date.
    • Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN intensified effort to encourage dollar remittances into the country.

    Continue Reading

      





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