naira devaluation. - Housing TV Africa

Naira Appreciates to N1,470/$ in Parallel Market

housingtv — Sat, 15 Jun 2024 07:21:12 +0000

The Naira appreciated in the parallel market on Thursday, reaching N1,470 per dollar compared to N1,500 per dollar previously.

However, in the Nigerian Autonomous Foreign Exchange Market (NAFEM), the Naira depreciated to N1,482.72 per dollar. Data from the Financial Markets Dealers Quotations (FMDQ) revealed that the indicative exchange rate for NAFEM rose from N1,476.24 per dollar, indicating a N6.48 depreciation for the Naira.

The volume of dollars traded on the NAFEM window also fell significantly by 98 percent to $183.47 million from $92.68 million.

As a result, the margin between the parallel market and NAFEM rates narrowed to N12.72 per dollar from N23.76 per dollar previously.

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Naira Falls to Month-Low of 1,470 Against Dollar on Black Market

housingtv — Sun, 12 May 2024 07:23:07 +0000

The Nigerian currency has breached the N1,450 mark against the dollar on the black market, reflecting evolving dynamics in Nigeria’s FX market.

Market fundamentals indicate that the naira has lost its support at N1450, paving the way for a new wave of decline, continuing its downward trend from March when it was hailed as the world’s best-performing local currency. Recent price action suggests the naira is nearing N1500 against the dollar.

On the black market, the naira dropped to a month-low of 1,470 against the dollar on Friday, driven by high demand for the greenback. Market analysts have consistently maintained that without corresponding fiscal policy adjustments, the local currency would struggle to maintain its year-to-date gains.

Nigeria’s oil output, a key source of FX earnings, has been declining, highlighting the need to diversify the economy and reduce FX liabilities.

Recent data from the CBN shows that a substantial portion of $1.12 billion out of the $1.61 billion in total outflows during this period went toward paying off external debt, rather than supporting the naira, indicating the increasing pressure that foreign debt is exerting on the country’s budget and the local currency market.

As a result, the FX market in Nigeria will seek additional support, with the CBN expected to maintain its hawkish stance and raise the headline interest rate at its upcoming monetary policy meeting on May 21.

Despite the CBN’s efforts to clear actual FX backlogs and increase rates to attract Foreign Portfolio Investors (FPIs), profit-taking and a slowdown in inflows have overshadowed these successes.

Razia Khan, Standard Chartered’s top economist for Africa and the Middle East, noted that about $1.3 billion of naira futures are set to mature at the end of this month, potentially increasing demand for dollars as offshore investors look to capitalize on the currency’s appreciation.

The dynamics of the naira have become more complex as the dollar index edged higher despite signs of slowing U.S. economic growth.

The dollar index, which measures the strength of the US dollar against a basket of six rival currencies, rose by 0.07% to 105.29 index points.

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Naira Appreciates Against Dollar, Closes at 1,382/$

housingtv — Fri, 22 Mar 2024 08:06:33 +0000

The naira maintained a steady appreciation against the United States dollar on Thursday, gaining N18 to close at 1,382/$ at the official market.

This positive development followed major gains recorded by the local currency at both the official and parallel foreign exchange markets, where it closed at N1,400/dollar on Wednesday.

The Presidency issued a warning to currency speculators, urging them to desist from acts against the national currency, as racketeers would face consequences for their actions.

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The FX trading auction revealed a 1.3 percent appreciation of the naira, attributed to increased dollar supply at the Nigerian Autonomous Foreign Exchange Market, according to data from the FMDQ Securities Exchange Limited.

The intraday high for the naira closed at N1,598 per dollar, while the intraday low strengthened to N1,300/$ on the same day. FX market players increased dollar supply to $288.47, up from $268.29 million recorded on the previous day.

The Central Bank of Nigeria (CBN) successfully resolved all valid foreign exchange backlogs, clearing obligations totaling $7 billion. Governor Olayemi Cardoso emphasized the importance of clearing the FX backlog to enhance credibility and confidence in the Nigerian economy.

The strain on the naira/dollar exchange rate is gradually diminishing, with Nigeria’s external reserves showing sustained growth. Foreign currency reserves rose by 3.62 percent to $34.37 billion as of March 12, 2024, compared to $33.17 billion recorded at the beginning of February 2024.

Diaspora remittances also surged by 433 percent to $1.3 billion in February, compared to $300 million in January.

Special Adviser on Information and Strategy, Bayo Onanuga, advised currency traders speculating on foreign exchange to sell their dollar holdings, as the naira is expected to appreciate further soon.

The recent clampdowns on the activities of illegal BDC operators in Lagos, Abuja, and Kano by the Economic and Financial Crimes Commission have helped to reduce the volatility of the naira.

The naira maintained a steady appreciation against the United States dollar on Thursday, gaining N18 to close at 1,382/$ at the official market. This positive development followed major gains recorded by the local currency at both the official and parallel foreign exchange markets, where it closed at N1,400/dollar on Wednesday.

The Presidency issued a warning to currency speculators, urging them to desist from acts against the national currency, as racketeers would face consequences for their actions.

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Naira appreciates by 7.62% to N2100 against Great British Pound at the black market

housingtv — Mon, 26 Feb 2024 15:16:58 +0000

The naira experienced a significant uptick on Monday, reaching a peak of N2100 per Great British Pound (GBP) in the parallel market, commonly referred to as the black market.

This surge marked a notable increase of 7.62%, with the currency strengthening by N160.00 compared to the previous day’s closing rate of N2,260.

This surge aligns with Nigeria’s heightened efforts to address the persistent depreciation of the Naira. In response to the currency’s decline, Nigeria has implemented various measures aimed at stabilizing its value.

These measures include intensifying enforcement actions against informal foreign currency street traders and targeting a well-known cryptocurrency trading platform.

Despite the Central Bank of Nigeria’s implementation of various policies aimed at boosting the supply of foreign exchange (forex), these developments persist, underscoring the complexities of managing currency stability in the face of economic challenges. 

However, the naira appreciated at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1,650/$1, an increase of 6.06% against N1,750 it closed the previous day,   
Additionally, the Naira against the Euro traded gained 5.95%, closing at N1850/EUR1 compared to N1960/EUR1 also reported the previous day.

In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,637.30/$1 as of 12 pm. 

Our source  reportedthat the National Security Adviser’s Office, led by Nuhu Ribadu, in collaboration with the Central Bank of Nigeria (CBN), has initiated a joint effort to combat forex speculation and tackle the issues affecting the country’s economic stability.  

In a statement on Tuesday, a spokesperson for Ribadu’s office, Zakari Mijinyawa, the partnership is set to include coordinated actions with leading law enforcement agencies such as the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service (NCS), and the Nigeria Financial Intelligence Unit (NFIU).   

Mijinyawa pointed out that the activities of speculators, operating both domestically and internationally through different mechanisms, have played a significant role in the naira’s depreciation, thereby exacerbating inflation and leading to economic instability in Nigeria.  

Source: Nairametrics

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The Type of Housing Sector Reforms Nigeria Needs – Former MBAN President

housingtv — Thu, 28 Sep 2023 20:01:08 +0000

The Director, of Greenstem Group and Former President, Mortgage Banking Association of Nigeria, Adeniyi Akinlusi in this interview with Festus Adebayo speaks about challenges in the housing sector and areas that which housing reforms can be achieved by the new administration.

What are the areas in housing reforms that should be achieved by the new administration?

When we talk about housing, we must answer the basic question which is what is a house? A house must consist of Land, approved design, construct the house on the land, infrastructure must be available like access roads, water, and power, and a house without those is not livable. These are areas begging for reforms.

There are lots of policies in this regard that need to be domesticated. For example, policy addressing the issue of quality like the housing building code. However, the problem always lies in the implementation, if we can implement at least 20% that would go a long way

Another critical aspect is the issue of the cost of building, with the current economic situation it is increasingly becoming expensive. A lot of our building materials are imported and if you factor that into housing it becomes unaffordable.

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We need to start exploring our local building materials as this can be an effective way of reducing costs.
Another area of reform the government can tap into is the provision of social housing g for those who are not financially buoyant.
Rental housing is another area to look out for, most people want a decent house and are not just concerned about owning the house.

With the current state of Naira and inflation, how can we finance the housing sector for optimal housing delivery?

Tough times require tough decisions, which in turn increases innovative actions. I am happy some of these issues are being addressed, we saw the newly confirmed central bank governor talking about why we are having issues of continuous naira devaluation. We need to settle outstanding payment by the central bank, once this is addressed people will know.

There’s also an issue of security of funds, once I bring my dollar into Nigeria, there should be a dollar to take out. So if that’s not happening, I wouldn’t want to bring my dollar in again. With this, we’d have shortages in building materials, supply chain issues, and a host of others.

Talking about interest rate at 27% is not something to be discussed outside the macro-economics, a lot of effort needs to be put into the macro-economics. If we use fewer foreign materials, there’d be less demand for importation input, and that will also reduce the effect of the demand for foreign exchange.

This is the time for us to also embrace innovation, Nigerians are quite resourceful. We must retreat and solve our problems ourselves. This is not the first time this is happened, and am sure we’d surmount this and move ahead.

How can the National Assembly support the new administration, especially the Ministry of Housing and Urban Development?

The new Minister of Housing and the Honourable Minister of State for Housing needs a lot of support. We know the importance of model mortgage foreclosure law has been domesticated in certain states. But one would expect homeownership to be easy here in Abuja the state capital, but reverse is the case.

Government is the biggest employer of labour, and it is bad that those who work with the government cannot buy a home and own it, not because they don’t have a federal mortgage bank, but if the house cannot be mortgaged then the aim is defeated.
Another aspect of the model mortgage foreclosure law is that it has a provision that every state must have its own law. We need the National Assembly to support this administration and the ministry.

There’s also an issue of titling, now that we have an action minister of the FCT, we expect that the issue of titling will be addressed for good.

At a point we proposed the ministry every month should publish tittles signed by the minister, no matter the amount, it is important for us to see the effort as this will connote accountability. This is also applicable to states as well.

Furthermore, the National Assembly must look at the recapitalization of the Federal Mortgage Bank. This is because we cannot have a Federal Mortgage Bank with shareholders’ funds which are eroded. It needs to be recapitalized for the role they are playing. There are quite a number of mortgage-related bills awaiting passage through the National Assembly.

We also need to have the mortgage guarantee company come up to show support to the mortgage banking industry and even commercial banks so that if you give mortgages, the idea is that if in the loan there’s a default before you realize it, you can get liquidity from the mortgage guarantee company. This is very important in ensuring the mortgage system works effectively.

NHF Act is becoming a serious matter, as at today the Central Bank of Nigeria is not championing the Law that says CBN should pursue all commercial Banks to contribute to that reform, what is your position?

The law is clear, and we must be law-abiding. At a time the National Assembly called some of the insurance companies to a meeting and that was talked about.
A lot of laws need to be reviewed, not only National Housing Fund NHF laws, the laws guiding Mortgage Banks, and even the NHF structure itself. An area this government needs to look at is the area of reforms. If we put the right reforms on policy, provide an enabling environment to thrive and support what we need to achieve.

We need to attract capital, the federal government will not have enough money for housing, and a lot of money will have to come from private sources, both within and outside the country.
We must reduce homelessness, and ensure people live in decent houses, as this will help reduce JAPA syndrome ultimately.

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