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Official exchange rate settles at N1551.24/$1 as P2P market crosses N1800/$1

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The foreign exchange turnover saw a significant rise of 76.61% to $117.32 million, coinciding with the Nigerian naira’s strengthening against the dollar in the official market on Tuesday, February 20th, 2024.   

However, despite this improvement, the intra-day high remained elevated, reaching N1,701 against the dollar by the close of trading. 

In contrast, the exchange rate experienced a decline in the black market, slipping to N1,700/$1, representing a 2.65% decrease compared to the previous day’s rate.  

Despite the Central Bank of Nigeria (CBN)’s implementation of various policies aimed at enhancing forex supply, challenges in this regard persist. 

According to data from the NAFEM (Nigeria Autonomous Foreign Exchange Market), where forex is officially traded, the domestic currency appreciated by 3.03%, closing at N1,551.24 to a dollar at the end of the business day. 

This represents an N47.00 gain or a 3.03% increase in the local currency compared to the N1,598.24 closed on Monday.  

The intraday high recorded a N1701/$1, while the intraday low was N1100/$1, representing a wide spread of N601/$1.  

According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $117.32 million, representing a 76.61% increase compared to the previous day.  

However, the Naira depreciated against dollar in the parallel forex market, where forex is unofficially traded, with the exchange rate quoted at N1,700/$1, reflecting a 2.65% decrease from the N1,655 rate it closed at the previous day.   

Additionally, the Naira weakened against the Euro by 4.97%, closing at N1810/EUR1 compared to N1720/EUR1 reported the previous day.  

The Great British Pound (GBP) closed at £1/N2120, a decline from £1/N2,040 recorded the previous day, this marks a notable decrease of 3.77% compared to the N2,040 rate recorded the previous day.  

In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,802.44/$1.  

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Georgieva re-elected as IMF managing director

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The executive board of the International Monetary Fund (IMF) says Kristalina Georgieva has been re-elected to serve as the lender’s managing director (MD) for a second term of five years.

In a statement on Friday, the board said Georgieva’s second tenure would begin on October 1, 2024.

The IMF had, on April 4, announced Georgieva as the sole candidate nominated for the position.

The board, coordinated by Afonso Bevilaqua and Abdullah BinZarah, said its decision on her reappointment was taken by consensus.

According to the statement, the board held several discussions with Georgieva, in line with the selection process it established on March 13, before making its decision.

“In taking this decision, the Board commended Ms. Georgieva’s strong and agile leadership during her term, navigating a series of major global shocks,” the statement reads.

“Ms. Georgieva led the IMF’s unprecedented response to these shocks, including the approval of more than $360 billion in new financing since the start of the pandemic for 97 countries, debt service relief to the Fund’s poorest, most vulnerable members, and a historic Special Drawing Rights (SDR) allocation equivalent to $650 billion.

“Under her leadership, the Fund introduced innovative new financing facilities, including the Resilience and Sustainability Facility and the Food Shock Window.

“It replenished the Poverty Reduction and Growth Trust, with the capacity to mobilize concessional loans to its poorest members, and co-created the Global Sovereign Debt Roundtable.

“It also secured a 50 percent quota increase to bolster the Fund’s permanent resources and agreed to add a third Sub-Saharan African chair to the IMF Board.

“Looking ahead, the Board welcomes Ms. Georgieva’s ongoing emphasis on issues of macroeconomic and financial stability, while also ensuring that the Fund continues to adapt and evolve to meet the needs of its entire membership.”

The board also acknowledged Georgieva’s focus on strengthening the IMF’s support to its members through effective policy advice, capacity development and financing and pledged to continue to work closely with the managing director.

Georgieva, a Bulgarian economist, has been leading the Bretton Wood organisation since October 1, 2019, when she took over from Christine Lagarde.

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Naira strengthens in parallel market, trades at N1,150/$

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Naira appreciates to N1,419/$ at official market

The naira, on Friday, appreciated to N1,150 per dollar at the parallel section of the foreign exchange (FX) market.

Currency traders in Lagos, also known as bureau de change (BDCs) operators, quoted the buying rate of the greenback at N1,110 and the selling price at N1,150 — leaving a profit margin of N40.

The naira appreciated by 0.86 percent from the N1,160 recorded on April 11.

“The dollar is falling and it is not my fault. It is how the FX market is now,” Lawal, a BDC operator, said.

Also, FMDQ Exchange, a platform that oversees official foreign exchange (FX) trading in Nigeria, said the naira rose by 7.16 percent or N88.23 to N1,142.38/$ on Friday — from N1,230.61/$ on Monday.

The appreciation of the naira is coming a few days after the CBN opened the third tranche of sales to BDC operations.

The apex bank began the sale of foreign exchange to BDC operators at the rate of N1,101/$ on April 8.

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Electricity tariff will reduce if FX rate drops below N1,000, says Adelabu

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Adebayo Adelabu, minister of power, says the electricity tariff will reduce if the foreign exchange (FX) rate drops below N1,000.

On April 3, the Nigerian Electricity Regulatory Commission (NERC) approved an increase in electricity tariff for customers under the Band A classification.

The regulator had said customers under this category receive over 20 hours of electricity supply daily, and will now pay N225 per kilowatt (kW) from April 3 — up from N66.

Criticising the policy, stakeholders had described the increase as “ill-timed” considering the harsh economic reality in Nigeria.

However, on April 5, Adelabu said the tariff hike only affects 1.5 million customers — out of 12 million.

Speaking on Channels television’s Politics Today programme on Thursday, the minister said by cutting the inefficiencies of some operators in the sector, coupled with the gains by the naira against the dollar, the tariff paid by Nigerians should change positively.

“The tariff is flexible and I can tell you that even if naira gains more and the exchange rate comes down below N1,000, it must positively affect the tariff and the tariff even for the Band A will come down below the N225 kilowatt per hour that we are currently charging,” he said.

“There are variable factors that go into the complication of the tariff and we are not closing our eyes to this.

“We are transparent. We are publishing it and we are talking to Nigerians, the consumers and all the power sector stakeholders.

“This administration is very serious and we are committed to transforming the sector.”

Adelabu also said the government is working tirelessly to ramp up power generation from about 4,000 megawatts to 6,000 megawatts in the next six months — “for the first time in the country’s history”.

He said 25 percent of Nigeria’s power generation is from hydropower while the remaining 75 percent is from gas plants.

On the Siemens project, Adelabu said the pilot phase is being concluded, which involves the importation of 10 power transformers and 10 mobile substations.

According to the minister, five of the transformers have been installed and commissioned at various locations across the country; while three of the mobile substations have been installed and are ready to be commissioned within the next two weeks.

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