Business
Dollar Gains for Third Day Versus Yen as Fed Meets
…Rand Slides
NEW YORK – The dollar rose for a third day against the yen as the U.S. Federal Open Market Committee began a two-day meeting amid forecasts it won’t announce any major changes to its asset-purchase program.
The Bloomberg U.S. Dollar Index climbed to the highest level in more than a week before the policy makers issue a statement tomorrow. Australia’s dollar slid versus all of its 16 major peers after Reserve Bank Governor Glenn Stevens said it will probably become “materially lower,” and the South African rand dropped against all but the Aussie. The yen gained earlier versus the dollar as jobs and retail sales rose before a Bank of Japan meeting this week.
“Ahead of the FOMC, people might be a bit more prudent and reducing risk positions,” Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in New York, said in a phone interview. “The foreign-exchange market in general is more reticent to take on risk than the stock market.”
The dollar strengthened 0.5 percent to 98.19 yen at 5 p.m. New York time, reversing a decline that saw it weaken as much as 0.2 percent. The greenback appreciated 0.3 percent to $1.3745 per euro and touched $1.3737, the strongest level in a week. It has fallen 1.6 percent versus the 17-nation currency this month. The euro gained 0.2 percent to 134.96 yen.
Bloomberg’s dollar gauge, which monitors the greenback against 10 other major currencies, advanced 0.4 percent to 1,006.12 and reached 1,066.22, the highest since Oct. 17. The index dropped on Oct. 23 to 997.94, the least since February.
Stocks rose, with the Standard & Poor’s 500 Index gaining 0.6 percent.
Volatility Increases
A gauge of price swings among the currencies of Group of Seven nations rose. The JPMorgan G7 Volatility Index was at 7.63 percent after falling yesterday to 7.48 percent, the lowest level since Dec. 21. The 2013 average is 9.39 percent.
South Africa’s rand fell against the dollar for a third day after demand for credit in the country slowed more than predicted, adding to evidence that growth in Africa’s biggest economy is losing momentum. The currency declined 0.6 percent to 9.8919 per dollar.
The Australian dollar dropped for a third day versus its U.S. peer after the Reserve Bank of Australia’s Stevens said the South Pacific currency’s level wasn’t supported by costs and productivity in the economy. The Aussie slid 1 percent to 94.79 U.S. cents.
The greenback lost 0.5 percent over the past month in a basket of 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen fell 0.4 percent, while the euro gained 1.3 percent.
‘Showing Strength’
“The dollar is showing strength across the board,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit, said in a telephone interview. “It’s already been very well priced-in that the Fed doesn’t change policy tomorrow. With the dollar being sold off over the last couple of weeks, there could be some profit-taking and positioning ahead of the meeting.”
The Federal Reserve will pare its $85 billion in monthly bond buying at its March meeting, according to a Bloomberg survey of analysts on Oct. 17-18. The purchases, made to push down long-term yields and spur growth, tend to debase the greenback. Policy makers last month refrained from slowing the stimulus to await further evidence of economic recovery.
Japanese retail sales climbed 1.8 percent in September from the previous month, the nation’s statistics bureau said. The unemployment rate fell to 4 percent.
Bank of Japan
The Bank of Japan buys more than 7 trillion yen ($71 billion) of government bonds every month in its bid to combat deflation. It meets Oct. 31. An exchange rate of 100 yen per dollar would be good for the economy, Koichi Hamada, an adviser to Japanese Prime Minister Shinzo Abe, said on Jan. 18.
“The Japanese government generally said at the beginning of the year that they’d like to see dollar-yen around about 98-100,” said Neil Mellor, a foreign-exchange strategist at Bank of New York Mellon in London. “The yen has been going sideways ever since because the market believes that’s where the government wants it and will actively strive to keep it.”
Morgan Stanley entered long positions on the dollar and euro versus the yen, according to a client note written by analysts led by Hans Redeker, the firm’s London-based head of global strategy. Long positions are bets currencies will gain.
Japanese policy makers have repeatedly said a weaker yen is important to reaching their 2 percent inflation target, and the firm believes “they will deliver on their promises,” the analysts said. Morgan Stanley’s targets are 105 yen per dollar and 139 yen per euro, the analysts said.
Canada’s Currency
The Canadian dollar slid to the weakest level in seven weeks after Bank of Canada Governor Stephen Poloz told lawmakers in Ottawa he would extend a three-year pause in interest-rate increases. The currency depreciated 0.2 percent to C$1.0469 and touched C$1.0471, the least since Sept. 6. It rose earlier amid bets it had reached a low point.
Trading in over-the-counter foreign-exchange options totaled $49 billion, from $30 billion yesterday, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg. Volume in options on the U.S.- Canada-dollar exchange rate amounted to $9.7 billion, the largest share of trades at 20 percent. Options on the dollar-yen rate totaled $8.9 billion, or 18 percent.
U.S.-Canada options trading was 900 percent more than the average for the past five Tuesdays at a similar time in the day, according to Bloomberg analysis. Dollar-yen options trading was 32 percent above average.
– BLOOMBERG
The Office of the Auditor-General of the Federation has uncovered financial irregularities amounting to ₦514 billion in the 2021 operations of the Nigerian National Petroleum Company Limited (NNPC Ltd).
The revelations were contained in a comprehensive audit report highlighting non-compliance and internal control weaknesses within Ministries, Departments, and Agencies (MDAs) during the 2021 financial year.
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Breakdown of Infractions
The audit detailed four major financial discrepancies within NNPCL:
“Irregular Deductions: A total of ₦343.64 billion was deducted from domestic crude oil sales at source without proper documentation.
“Sinking Fund Deposits: ₦83.66 billion, categorized as miscellaneous income, was retained in a sinking fund account.
“Unauthorised Refinery Deductions: ₦82.95 billion was deducted from federation revenue purportedly for refinery rehabilitation.
“Unsubstantiated Payments: ₦3.75 billion was flagged for transactions related to petrol sales that lacked proper verification.
The Auditor-General’s report stated that these financial activities violated the 1999 Constitution and the Financial Regulations Act of 2009, underscoring significant lapses in compliance with statutory guidelines.
According to the report, NNPCL generated ₦484.73 billion from domestic crude oil sales in March and May 2021.
However, ₦343.64 billion was deducted for various purposes, including “Value Shortfall,” “Strategic Stock Holding Cost,” and “Pipeline Maintenance.”
The deductions were made unilaterally by NNPCL without adequate documentation or justification.
Additionally, the report flagged ₦50 billion of the net payable amount for May 2021 as unaccounted for, creating a significant gap in the federation’s revenue.
“Audit observed from the review of NNPC SAP payment record for March and May 2021 payments that the sum of ₦484.73bn was the gross amount generated for the sale of domestic crude for the months of March and May 2021.
“The sum of ₦343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.
“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.”
On the unremitted ₦50 billion from May 2021, the report noted: “In the month of May, the net payable that could have been remitted ought to have been ₦127.075bn, but only the sum of ₦77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.”
The report attributed these anomalies to weaknesses in NNPCL’s internal control systems, warning of the risks they pose to public funds.
It read, “The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”
The success of the maiden edition of the Lagos Shopping Festival (LSF), Africa’s first 72-hour non-stop commerce and entertainment event has been credited to the Governor of Lagos State, Babajide Sanwo-Olu.
This is the view of Managing Director/Chief Strategist of Chain Reactions Africa Ltd, Israel Jaiye Opayemi, one of the main organisers of the event.
According to Opayemi, though Chain Reactions Africa conceptualised the event, the festival could be rightly described as the Governor’s baby and owes its success to his leadership. “Firstly, the Lagos Shopping Festival could not have come to fruition if the Governor did not buy into our audacious plan when we first presented the idea to him during the Covid-19 pandemic in 2020. Secondly, it was the Governor’s exemplary leadership of the project as its Chief Marketing Officer which attracted the buy-in of key sponsors like Zenith Bank, Tolaram Group, First Bank Plc, and Guinness Nigeria Plc,” Opayemi revealed.
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While the duo of Zenith Bank and First Bank provided their bank on wheel platforms for buyers at the Lagos Shopping Festival, they also supported the Vendors with special Point of Sale Machines with which to process payments from buyers. The banks were also seen marketing their diverse banking products to guests within the shopping arena.
For Tolaram, it was a time to support the citizens and give back to society. Guests at the Lagos Shopping Festival were freely given some of the products of the group such as PowerOil, Indomie and Kellogg’s packaged into goodie bags and given out to prospective buyers at the shopping arena. The Children’s Arena was however activated by Indomie with the children entertained by Santa Claus within a well-equipped arena manned by the Indomie Brands team and the Lagos State Safety Marshalls. The children were daily treated to free Indomie meals daily and given various gifts to go home with.
On its part, Guinness Nigeria came through as the real life of the Nigerian party by organizing product sampling activation for the teeming guests at the festival using brands such as Singleton, Johnnie Walker, Ciroc, Don Royale and Captain Morgan to deliver pleasant experiences to guests aside from Guinness and Malta Guinness.
While unveiling the identity of the festival last month, Governor Babajide Sanwo-Olu had thanked the management of Zenith Bank Plc, Tolaram Africa Group, Guinness Nigeria Plc and First Bank of Nigeria for supporting the idea of a Lagos Shopping Festival, describing it as a value addition on the state’s tourism calendar and the overall efforts to grow the State’s GDP. The Governor further said, “I must specially acknowledge your pioneering sponsorship role. It is easy for a corporate sponsor to jump on the sponsorship band wagon of an already established festival and fund it. But you are supporting the maiden edition of this Lagos Shopping Festival with us. The competition is watching you now. Do not build this brand with us and yield the space for the competition to take over. I do hope you would all commit long term to this brilliant initiative.”
On his part, Girish Sharma, CEO Guinness Nigeria Plc, expressed enthusiasm for the initiative. “Lagos is the commercial heartbeat of Nigeria and Africa’s entertainment capital, and the Lagos Shopping Festival captures its essence. We see opportunities in this initiative because it is a creative fusion of commerce and entertainment. This partnership reflects our dedication to fostering economic opportunities and support the nation’s vibrant entertainment industry.”
A first-of-its-kind, the festival was a convergence of commerce and entertainment, bringing together buyers and sellers in the MSME ecosystem, and hordes of fun-seekers who were entertained with thrilling performances by A-list entertainers, including Adekunle Gold, Wande Coal, Teni, Young Jonn, BNXN, Ayo Maff, SB Live and EmmaOMG. The list also included some of Nigeria’s most sought after DJs such as DJ Neptune, DJ YK Mule, DJ Baddo while Gbenga Adeyinka the 1st and Larry J dished out rib-cracking comedy performances.
Held from 23rd to 25th Day of December 2024, at the iconic Mobolaji Johnson Arena, Onikan Stadium, Lagos, the Lagos Shopping Festival saw thousands of fans throng the main venue and select Lagos malls during the three-day period to bag the latest bargains from local and top global brands.
The Nigerian Naira experienced mixed movements in the foreign exchange markets on Monday, as it depreciated to N1,665 per dollar in the parallel market, down from N1,660 per dollar recorded over the weekend.
In contrast, the official exchange rate saw the Naira appreciate to N1,534.56 per dollar, improving slightly from N1,535 per dollar last Friday, according to data released by the Central Bank of Nigeria (CBN).
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This reflects a marginal gain of 44 kobo in the official Nigerian Foreign Exchange Market (NFEM).
As a result, the gap between the parallel market rate and the NFEM rate widened to N130.44 per dollar, compared to the N125 per dollar margin recorded over the weekend.
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