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FX MARKET
MTN Nigeria has said that it utilized the improved liquidity in the FX market to reduce the balance of outstanding letters of credit (LC) obligations to $243.4 million as of 31st March 2024, from $416.6 million as at December 2023.
Exchange rate volatility increased in March 2024 as the Naira traded within an exchange rate range of $/N1,300.43 – $/N1,627.40 compared to $/N1,418.78 – $/N1,665.50 recorded in February
Adebayo Adelabu, the Minister of Power, has said that the revised electricity tariff for Band A customers could decrease if the Naira strengthens against the Dollar in the foreign exchange market, indicating that the rates are not fixed.
The Chairman of the Bank Directors Association of Nigeria, Mustafa Chike-Obi, has stated that the Central Bank of Nigeria (CBN)’s decision to hike interest rates in the past two Monetary Policy Committee (MPC) meetings will severely harm the real economy, leading to limited economic growth and increased unemployment levels.
The Nigerian Electricity Regulatory Commission (NERC) has applied an exchange rate of N1463.3/$ in calculating the new electricity tariff for Band A consumers in the recent electricity tariff review.
The Nigerian local currency is running out of time, and the U.S. dollar index is hovering around two-month lows as markets await significant additional indicators of when the Federal Reserve will lower interest rates and consult inflation data.
Data from the Nigerian Exchange (NGX) reveals that foreign participation in the Nigerian equities market dropped to 8.15% in January 2024, a decline compared to 13.92% and 12.76% recorded in the previous and corresponding month of 2023.
Mr. Olayemi Cardoso, the CBN headmaster, is implementing a strategy involving the removal of subsidies, floating the Naira, and encouraging foreign portfolio investment (FPI). The goal is to stabilize the Naira and create breathing space for the fiscal team to address underlying economic dysfunctions.
Governor Yemi Cardoso has disclosed that the foreign exchange market received a boost of over $1 billion in liquidity in the past few days.
The naira remained near its lows on the P2P market often regarded as the most accessible FX market, as weak dollar inflows have made it difficult for the CBN to support the Nigerian currency in the FX market.
The Minister of Finance, Wale Edun, says the federal budget cannot be sustained by the Ways and Means advances from the Central Bank of Nigeria.
The past week has been unpleasant for Africa's largest economy's currency as the naira hit a fresh low in the official market.