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Naira Drops In Value, Now Sells For N410 Per Dollar

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Naira Drops In Value, Now Sells For N410 Per Dollar

The Central Bank of Nigeria (CBN) has officially adopted the Nigerian autonomous foreign exchange (NAFEX) rate, a development that has seen naira weakened by 8 percent to N410.25 per $1.

As seen on its website, the apex bank referenced the new rate as “NAFEX Exch, Rate (USD) as at Monday, May 24, 2021”.

This development was however no surprise, as the CBN had removed the exchange rate of N379/$1 from its website homepage, conforming with the bank’s policy that the NAFEX rate is now the default reference exchange rate for official and legitimate transactions.

Since the Central Bank last adjusted the exchange rate in August 2020, it has retained the exchange rate of N379/$1 on its website homepage which in the past, represented the official exchange rate.

The exchange rate displayed on the website has historically been referenced as the official exchange rate of the country.

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Economy

Naira Dips Further At Parallel Market After CBN’s Clampdown On BDCs

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Naira Dips Further At Parallel Market After CBN's Clampdown On BDCs

The naira slumped further to 523/$ at the parallel market on Wednesday, July 28, 2021, a day after the Central Bank of Nigeria (CBN) stopped the allocation of foreign exchange to Bureau de Change (BDC) operators in the country.

The naira, which exchanged to the dollar at 503 on Monday, fell to 505 on Tuesday, few hours after the CBN announced it would no longer sell forex to the BDCs and stopped approval of new licences to the operators.

According to naijabdcs.com, the official website of the BDCs, the dollar was bought at N515 and sold at N523 on Wednesday.

At the Investors & Exporters forex window, the naira hit a high of 413/$1 but closed at 411.60/$1.

The CBN, however, maintained the official rate of N410.16/$1 on its website.

Before the new regulation, the CBN had been supplying each BDC $10,000 twice a week at the rate of N393.

After the Monetary Policy Committee meeting on Tuesday, the Governor, CBN, Godwin Emefiele, had accused the BDCs of abusing the privilege given to them and sabotaging efforts to ensure naira stability in the country.

Expressing the displeasure of the MPC, he said, “The facts abound that BDCs have turned themselves into agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria and we will go after all of them.

“Throughout this meeting of the MPC, we extensively debated this matter, and independently with each member of the committee exhibited accurate and deep understanding of issue at stake.

“After these exhaustive and extensive deliberations, the management of the Central Bank with the support of the committee reached the following decisions which will take the following effect. Hence, the CBN will henceforth discontinue the  sale of foreign exchange to BDC operators.”

Emefiele added that the CBN would henceforth channel significant portion of its weekly allocation currently meant for BDCs to commercial banks, to meet legitimate forex demand for ordinary Nigerians and businesses, whether for small-scale imports, medical bills, educational expenditure, personal and business travels or any other legitimate needs as prescribed by the CBN’s foreign exchange manual.

He said by this, all commercial banks in the country would with immediate effect create a designated teller point in designated branches, for sale and disbursement of foreign exchange to customers who deserve forex for legitimate purposes.

He said, “For emphasis, the public should note that once a customer provides the basic documentation to provide forex, all banks must immediately pay that on demand or within a stipulated time frame sell foreign exchange to the customer.

“Any customer who does not receive foreign exchange must report this to their bank and where they are unsatisfied with the resolution, they are required to contact the CBN on our toll free line 07002255226 or email cpd@cbn.gov.ng to lodge the complaint with details of the bank’s transactions.”

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Economy

ABCON Keeps Mum On CBN’s Sanction

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ABCON Keeps Mum On CBN's Sanction

Alhaji Aminu Gwadabe, the President of the Association of Bureaux de Change Operators of Nigeria (ABCON), has refused to comment on the action of the Central Bank of Nigeria (CBN) against his members.

As reported on Newsrand, CBN blew hot, stopping the licensing of BDC operators in the country.

According to CBN governor Godwin Emefiele, who made the disclosure of this development, while the apex bank will no longer license new BDC operators, all current processes of new licenses have equally been halted.

Defending the CBN action, Emefiele explained that BDC operators were fond of carrying out illegal forex trading.

However, when contacted for comment, Gwadabe didn’t answer his phone but replied with an SMS that there was no comment on the clampdown at the moment.

“In a meeting with BDCs operators. For now, no comment,” he replied.

Meanwhile, Dr. Muda Yusuf, Economist, and former Director-General, Lagos Chamber of Commerce and Industry (LCC), has reacted to the development, warning that there will be consequences.

According to Yusuf, the CBN action would only worsen the situation raised rather than addressing why the action had to be taken.

His words: “It is a policy regime that has created a huge enterprise around foreign exchange – round-tripping, speculation, over-invoicing, capital flight, etc.

“The action of the apex bank amounts to tackling the symptoms rather than dealing with the causative factors, which is not a sustainable solution.

“It is regrettable that the CBN does not believe in the market mechanism. Yet market systems are time tested as instruments of efficient resource allocation in leading economies around the world.”

“Moving retail forex transactions from BDCs to the banks was like kicking the can down the road. The same issues would manifest even with the banks.

“The CBN needs to give the market a chance. Its current approach would continue to deepen distortions in the economy, perpetuate round-tripping, fuel speculation, suppress forex supply, and boost the underground economy.”

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Economy

PenCom Develops App To Automate Pre-Retirement Enrollment

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PenCom Develops App To Automate Pre-Retirement Enrollment

The National Pension Commission (PenCom) on Tuesday announced that it had developed an online application to automate pre-retirement verification and enrollment.

A statement signed by the commission’s Head, Corporate Communications, Mr. Peter Aghahowa, in Lagos, said the application had the capability to register, verify and enroll prospective retirees of treasury-funded Federal Government Ministries, Departments, and Agencies (MDAs).

Aghahowa said PenCom would test-run the online enrolment application between Aug. 2 to 20 with selected MDAs.

READ ALSO: FG Inaugurates 16 Board Members Of PENCOM

He stated that the MDAs would be selected across the six geopolitical zones in the country, including the Federal Capital Territory (FCT).

“Accordingly, the online enrolment application would be hosted on the PenCom website.

“As a prelude to the formal deployment of the online enrolment application, PenCom would commence a pilot run of the exercise from between Aug. 2 to 20.

“This will be done with selected MDAs in the six Geo-Political Zones and the Federal Capital Territory (FCT) in order to test-run the application with real-time data,” he said.

He said the application would go live after a test run on a date to be announced by the commission in due course.

The PenCom spokesperson explained that the affected retirees or prospective retirees were expected to undergo the data recapturing with their respective Pension Fund Administrators (PFAs), as a pre-requisite for the online enrolment.

Aghahowa said the data recapturing entailed updating personal details and providing National Identification Number (NIN).

“However, retirees or prospective retirees who have already undergone the data recapture exercise with their PFAs are not required to repeat the exercise,” he said. 

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