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Naira Weakens By 16% Amid Soaring Demand In I&E Market

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Yesterday, there was a significant decline in the value of the Naira, as it depreciated by 16 percent to reach N770.38 per US dollar in the Investors and Exporters (I&E) window.

 

This depreciation was primarily driven by an increased demand for dollars, which was exacerbated by a severe shortage in supply.

 

According to data from the FMDQ, the indicative exchange rate in the Investors and Exporters (I&E) window surged to N770.38 per dollar, compared to N663.04 per dollar on the previous Friday.

 

This signifies a depreciation of N107.34 for the Naira. However, in the parallel market, the Naira experienced a slight appreciation, strengthening from N759 per dollar to N755 per dollar yesterday.

 

Consequently, the exchange rate in the Investors and Exporters (I&E) window exceeded the parallel market exchange rate for the first time since 2019.

 

Sources in the forex market have informed Vanguard that the depreciation of the Naira is primarily attributed to a surge in demand, driven by the maturity of over $3.7 billion worth of Letters of Credit (LCs).

 

This situation is further exacerbated by a shortage in the supply of foreign exchange, as the Investors and Exporters (I&E) window has yet to witness substantial inflows since the reintroduction of the willing seller, willing buyer model by the Central Bank of Nigeria (CBN).

 

According to one source, the volume of transactions in the market remains quite limited, involving individuals with urgent forex requirements who are willing to purchase at any exchange rate.

 

Some of these buyers were already accustomed to acquiring dollars at parallel market rates, and therefore, they are accustomed to paying above N700 per dollar for their purchases.

 

The development in the I&E window follows the new forex measures announced by the CBN on Wednesday.

 

Announcing the   new measures in a statement titled, “Operational Changes to the Foreign Exchange Market”, Director, Financial Markets, Dr. Angela Sere-Ejembi, said, “The Central Bank of Nigeria (CBN) wishes to inform all authorized dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange (FX) Market.

 

“Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.

 

“Re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window.

 

“The operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two (2) decimal places.

 

“Proscription of trading limits on oversold FX positions with permission to hedge short positions with Over-The Counter-futures. Limits on overbought positions shall be zero.

 

“Re-introduction of order-based two-way quotes, with bid-ask spread of N1. All transactions shall be cleared by a Central Counter Party (CCP).

 

“Reintroduction of Order Book to ensure transparency of orders and seamless execution of trades. The operational hours of trades shall be from 9am to 4pm, Nigeria time.

 

“Cessation of RT200 Rebate Scheme and the Naira4Dollar Remittance Scheme, with effect from 30 June 2023. Further guidance on these matters shall be communicated in due course. All market participants and the general public are kindly enjoined to abide by these rules.”

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JUST IN: FG Announces Launch Date For Student Loan Applications

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The Federal Government of Nigeria (FGN) has announced that the portal for student loan applications will officially open on May 24, 2024.

This development is part of the Nigerian Education Loan Fund’s efforts to enhance access to higher education, as stated by the Fund’s media lead, Nasir Ayantogo, on Thursday night.

According to Ayantogo, the launch of the application portal is a significant step in President Bola Tinubu’s commitment to providing accessible and inclusive education for Nigerian students.

This initiative follows the signing of the Access to Higher Education Act, 2023, by President Tinubu on June 12, 2023 which aims to provide interest-free loans to financially disadvantaged students pursuing higher education in Nigeria.

Dele Alake, a member of the former Presidential Strategy Team, noted that this move fulfills one of President Tinubu’s key campaign promises to liberalize funding for education.

The Act, popularly known as the Students Loan Law, also established the Nigerian Education Loan Fund to handle all loan requests, grants, disbursements, and recoveries.

Initially, the government announced that the scheme would launch in September, but it faced several delays, resulting in an indefinite postponement in early March.

The Presidency attributed the delay to President Tinubu’s directive to expand the scheme to include loans for vocational skills.

Following a briefing from the NELFUND team led by the Minister of State for Education, Dr. Yusuf Sununu, on January 22, President Tinubu instructed the Fund to extend interest-free loans to Nigerian students interested in skill-development programs.

President Tinubu stressed the importance of including those who may not seek university education, noting that skill acquisition is equally as important as earning academic degrees.

He had said, “This is not an exclusive programme. It is catering to all of our young people. Young Nigerians are gifted in different areas.

“This is not only for those who want to be doctors, lawyers, and accountants. It is also for those who aspire to use their skilled and trained hands to build our nation.

“In accordance with this, I have instructed NELFUND to explore all opportunities to inculcate skill-development programmes because not everybody wants to go through a full university education,”

Through the portal, students can now access loans to pursue their academic aspirations without financial constraints.

According to the statement, the portal features a user-friendly interface, allowing students to conveniently submit their loan applications.

The statement added, “We encourage all eligible students to take advantage of this opportunity to invest in their future and contribute to the growth and development of our nation. Students can access the portal on www.nelf.gov.ng to begin application.”

 

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JUST IN: Tinubu Welcomes Senegal’s Youngest President At Villa

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President Bola Tinubu received Senegal’s newly elected President, Bassirou Faye, at the Aso Rock Villa in Abuja on Thursday.

Faye, who arrived at 3:09 p.m., is making his first official visit to Nigeria since taking office last month.

At 44, he is the youngest president in Senegalese history, having secured a decisive victory in April’s delayed presidential election with over 54% of the vote.

 

 

 

More to follow…….. 

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11 Confirmed Dead In Kano Mosque Attack

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In the devastating arson that occurred on Wednesday during an early morning prayer in Gaza village near Gezawa in Kano State, eleven people have been confirmed dead.

The perpetrator, 38-year-old Shafiu Abubakar, set fire to a mosque amidst an inheritance dispute, trapping around 40 worshippers inside.

Rabiu Gadan, a resident of the village, disclosed that 11 individuals have tragically succumbed to the burns they suffered.

Of these victims, eight have already been laid to rest, while preparations are underway for the burial of the remaining three, scheduled for Thursday.

Rabiu revealed that the attack was not the first instance of violence involving Shafiu. Previously, he had assaulted two of his older brothers and then voluntarily surrendered himself to the police, claiming responsibility for their deaths.

Another resident, Malam Garba, said, “He has always been troubled, but when he challenged his family to give him his portion of the inheritance, they did.

“He was even taken to a mental institution once when he attacked his relatives but he was given a clean bill of health. So, he was clearly in his right mind when he set the fire, two of his uncles died and we buried them yesterday already.”

According to BIZTELLERS reports, the assailant is currently in police custody, where he has confessed to his actions.

He cited frustration with the way some of the victims handled the inheritance sharing as his motive. Despite warning his family members to stop maltreating him, he claimed his pleas were ignored.

He however expressed no regret for his actions.

Residents confirmed the existence of an inheritance dispute within the family, but the precise nature of the disagreement remained unclear.

At the Murtala Muhammad Specialist Hospital in Kano, where the injured were rushed for treatment, distraught relatives anxiously awaited news about the condition of their loved ones.

Maijida, one of the distressed relatives, shared her heartache, expressing fear over the condition of her father and brothers.

“My father and two brothers are severely injured and I was told some people have died already, what will I do if I lose them, I will be left all alone.” she lamented.

One of the residents that attempted to rescue the victims, Musa Muhammad Gadan said, “I was late going to the prayers, but as I was rushing to the mosque, I heard a blasting noise and then I heard people screaming so I rushed over, the flames had engulfed the building, I and some others tried to rescue them and that is how I sustained burns on my arms.

During a visit to the victims at Murtala Muhammad Specialist Hospital, Deputy Inspector General of Police AIG Umar Mamman Sanda, in charge of Zone 1 in Kano, confirmed the devastating loss of eight lives on Wednesday.

He was accompanied by a delegation of security personnel, including the Commissioner of Police in the state and the Director of the Department of State Services (DSS).

He said, “The suspect was said to be not satisfied with the distribution and was reacting to that. He is presently with us and is giving useful information. It is really unfortunate.”

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