Naira rallies to N1,482/$ on rising foreign reserves – Newstrends
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Naira rallies to N1,482/$ on rising foreign reserves

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1 month ago

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Naira rallies to N1,482/$ on rising foreign reserves

The naira rallied to a recovery at the weekend on the back of sustained increase in the country’s foreign exchange (forex) reserves.

The naira appreciated by 1.0 per cent to N1, 482.81 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

This came as the nation’s forex reserves rose by additional $73.05 million to $32.74 billion. It was the fifth consecutive accretion in the continuing buildup of the reserves.

Penultimate week, the reserves had added $195.01 million. It had grown by $89.76 million, $132.68 million and $10.76 million in recent weeks.

At the forwards market, naira contracts closed on the upside at the weekend with the one-year contract appreciating by 1.1 per cent to $1,504.10 per dollar. The three-month contract recovered by 1.4 per cent to N1,546.65 per dollar while the six-month contract appreciated by 0.6 per cent to N1,621.89 per dollar. However, the one-year contract slipped by 0.1 per cent to N1,769.62 per dollar.

Finance and economy experts were unanimous that the buildup in external reserves was a good indication for the country’s currency management and macroeconomic stability.

Analysts expected that changes in forex management rules, steady improvement in crude oil production and upbeat in global oil price could help the country mitigate its volatile forex situation.

President, Association of Capital Market Academics in Nigeria, Prof Uche Uwaleke, said any increase places the CBN in a stronger position to meet forex obligations as well as intervene in the forex market.

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“If this development is sustained, we are likely to witness an appreciation of the naira in the forex market and more stability in the exchange rate following improved liquidity. This is one positive development capable of keeping away destructive speculators from the forex market,” Uwaleke said.

Uwaleke however said Nigeria needs to curb excessive import dependence to support its forex recovery.

“Also, Nigeria’s import data support revisiting and scaling up the CBN’s currency swap deal with the Peoples Bank of China. Given that the bulk of Nigeria’s imports are from China, it stands to reason, therefore, to explore ways of bypassing the dollars and settling these transactions in the Yuan. This was the idea behind the currency swap with China which was largely inadequate in size. In order to increase the stock of Yuan in our external reserves, Nigeria can issue panda bonds, which are bonds denominated in the Chinese Yuan and are considered cheaper than Eurobonds,” Uwaleke said.

Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the continuing increase in forex reserves will support government’s current efforts aimed at fostering liquidity and stability at the forex market.

“The increase is a positive signal for improved liquidity in the forex market. This should ultimately help to stabilize the exchange rate of the naira or even strengthen it against the dollar if the increase is steady and consistent,” Amolegbe said.

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In its latest macroeconomic assessment report, the International Monetary Fund (IMF) had sounded upbeat on the Nigeria’s macroeconomic reforms citing the improvement in oil production, ongoing efforts to boost food production and social welfare programmes among others.

Governor, Central Bank of Nigeria (CBN), Dr Olayemi Cardoso, has outlined that ongoing efforts to strengthen the country’s forex position would lead to increased stability in forex reserves and naira.

According to him, the collaboration with Ministry of Finance and the NNPCL to ensure that all forex inflows are returned to the CBN will greatly enhance forex flows and contribute to the accretion of reserves.

“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage. The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.

“We are implementing a comprehensive strategy to improve liquidity in our forex markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” Cardoso said.

He pointed out that the apex bank understands that upholding the integrity of financial markets is crucial for building confidence, thus it remains committed to decisively address any infractions and abuses.

He noted that in efforts to stabilise the exchange rate, the CBN prioritises transparency and a market environment that enables the fair determination of exchange rates, ensuring stability for businesses and individuals alike.

“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate,” Cardoso said.

Naira rallies to N1,482/$ on rising foreign reserves

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Nigerian Railway Corporation suspends Warri-Itakpe train after derailment

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4 hours ago

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July 5, 2024

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Nigerian Railway Corporation suspends Warri-Itakpe train after derailment

The Nigerian Railway Corporation (NRC) has announced the suspension of its train services from Warri in Delta State to Itakpe in Kogi State, starting from Friday, July 5th.

The suspension is due to an obstruction on the track, according to the NRC.

This is contained in a notice sent to customers titled “Public Announcement” on Friday, saying that the agency would likely resume operations on Monday, July 8, 2024.

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It read, “This is to officially notify our esteemed passengers that Warri-Itakpe Train will not run today being Friday, 5th July 2024 due to the obstruction we have on our track.

“We shall resume our normal train services on Monday 8th July 2024. Passengers who already booked their tickets online will be refunded.”

“All inconveniences is highly regretted. Thank you,” the statement added.

The train reportedly derailed on Thursday, July 4 at about 7.15pm.

A passenger on the train said it wobbled along its track at several locations and derailed.

It was however learnt that the NRC team was working to fix the problem.

Nigerian Railway Corporation suspends Warri-Itakpe train after derailment

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NCAA suspends licences of 10 private jet operators

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13 hours ago

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July 5, 2024

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NCAA suspends licences of 10 private jet operators

The Nigeria Civil Aviation Authority (NCAA) has suspended the Permits for Non-Commercial Flights (PNCF) licenses of ten private jet operators for failing to comply with an earlier recertification directive aimed at curbing the misuse of private jets for commercial operations. 

In a statement signed by Michael Achimugu, Director of Public Affairs and Consumer Protection, the NCAA explained that the operators did not adhere to the directive issued on April 16, 2024, requiring re-evaluation by April 19, 2024.  

This directive was intended to ensure compliance with Part 18.3.4 of the Nigeria Civil Aviation Regulations 2023, which prohibits PNCF holders from using their aircraft for commercial operations or charter services.

“The Nigeria Civil Aviation Regulations 2023 Part 18.3.4 forbids holders of PNCF from using their aircraft for CARRIAGE OF PASSENGERS, CARGO or MAIL for HIRE or REWARD (commercial operation or charter services).  

“As a result of flagrant disregard of this rule, the NCAA had earlier directed all holders of PNCF to undergo re-evaluation which should have been concluded by the 19th of April 2024.  

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“To this end, the NCAA has suspended the PERMIT FOR NON-COMMERCIAL FLIGHTS of ten private jet operators,” the statement read in part.  

The ten suspended private jet operators whose PNCF licenses were suspended over failure to commence the recertification process include: 

  • Azikel Dredging Nigeria Ltd. 
  • Bli-Aviation Safety Services 
  • Ferry Aviation Developments Ltd.  
  • Matrix Energy Ltd. 
  • Marrietta Management Services Ltd. 
  • Worldwide Skypaths Services 
  • Mattini Airline Services Ltd. 
  • Aero Lead Ltd. 
  • Sky Bird Air Ltd  
  • Ezuma Jets Ltd. 

The statement also informed the public that engaging PNCF holders for commercial purposes is illegal, and the NCAA will promptly take enforcement actions against any violators.  

Additionally, NCAA officials have been deployed to General Aviation Terminals (GAT) and private wings of airports to monitor the activities of PNCF holders, the statement noted. 

NCAA suspends licences of 10 private jet operators

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Tinubu unveils N2tn plan to stabilise economy in six months 

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14 hours ago

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July 5, 2024

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Tinubu unveils N2tn plan to stabilise economy in six months 

President Bola Tinubu has announced a N2 trillion stabilisation plan to revive Nigeria’s struggling economy within six months.

He said during the inauguration of the presidential economic coordination council (PECC) on Thursday that the project was aimed at revitalising the nation’s economy within the given period with the help of the private sector.

The PECC chaired by the President was established in March this year and it includes key government officials such as the vice-president, the senate president, and the chairman of the governors’ forum.

It also has prominent private sector leaders such as Aliko Dangote, Tony Elumelu, and Bismarck Rewane, serving on the council for one year.

Tinubu’s administration has faced criticism for its economic reforms, including the removal of petrol subsidy and foreign exchange policies which have made life difficult for Nigerians.

But the government said it remained optimistic that the short-term pain would yield long-term benefits and attract foreign investment.
Speaking at the inauguration of the PECC, Tinubu expressed gratitude to Dangote, Elumelu, and others for their participation.
“It is Nigeria that is calling, not a Bola Tinubu. And the hope of the entire nation hangs on you people,” he said.
Speaking on current economic challenges, the President recalled that he declared a state of emergency on food security and outlined plans to increase oil production, improve power generation, and leverage infrastructure development to boost agriculture and electricity supply.
“We have a challenge thrown at us and all of us will have to be careful. I believe today is America’s 158th of their independence while we are celebrating our 25 years of progress of democracy,” Tinubu said.
“We have to look back at how we have navigated ourselves and look forward [to] better economic navigation.
“I can give instructions as the president from my office but I believe so much, deeply in the organised private sector.

“The partnership to drive the economy of this country, for reforms and stabilization that is necessary, give the incentive where we must and leave the market to control the pricing mechanism and the consumption.
“I am ready to listen to you in all of that. You have seen us from close quarters but we are one.
“We feel the market pinches differently the price of foodstuff and all of that. I believe Bismarck Rewane will be able to make additional suggestion on what we are lacking and what we should do to stabilize this economy.”
Tinubu acknowledged the challenges faced by the market, particularly in terms of food prices, as he expressed his willingness to listen to the private sector leaders for their recommendations on stabilising the economy.
He also highlighted the government’s plans for a manufacturing stabilisation fund and support for Micro, Small, and Medium Enterprises (MSMEs).

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