The Nigerian naira marked a substantial surge against the US dollar, closing at N791.75/$1 within the official market. This notable rise, reflecting a 5.87% increase or N49.39 compared to the previous day’s rate of N841.14/$1 in the Nigerian Autonomous Foreign Exchange Market, emerged following the Central Bank of Nigeria’s recent actions to clear a significant portion of its FX backlog.
The apex bank’s measures are beginning to yield results, with the highest bid for the dollar at N1120/$1 and an intraday low at N701/$1, showcasing a substantial spread of N419/$1. The recorded forex turnover at the close of trading stood at $157.78 million.
In a recent statement, the CBN confirmed the initiation of clearing the backlog of foreign exchange forward contracts. This move has been long-awaited and is anticipated to alleviate the strain on the naira, offering respite to the business sector and the economy at large.
Persisting dollar shortages have plagued the country since the exit of foreign investors from local assets. Despite efforts, their return remains elusive, leaving the central bank struggling to match the escalating demand for dollars.
Furthermore, the recent payments by the central bank follow the Finance Minister’s announcement on October 23rd, revealing an expected $10 billion inflow to bolster liquidity in the FX market. This injection is poised to alleviate the pressure on local lenders grappling with customer demands due to the prolonged dollar shortages in Africa’s largest economy.
Gabriel Idahosa, Deputy President of the Lagos Chamber of Commerce and Industry, emphasized that the CBN’s clearance of FX backlogs with international lenders is a pivotal signal. According to him, this move instills confidence in the traditional market, reviving not only letters of credit but also bolstering faith among portfolio investors, international airlines, and potentially attracting foreign direct investments.
China’s Reassurance on the African Debt Crisis: Collaborative Efforts for Poverty Reduction
The Chinese government has made assurances to Nigeria and other African nations, affirming its commitment to preventing any debt crisis on the continent. Yan Yuquing, the Chinese Consul-General in Lagos, conveyed this during the 18th China-African lecture at the University of Lagos.
Highlighting the collaboration between China and African countries, Yuquing stressed their joint efforts aimed at poverty reduction across the continent. She reiterated that China has never incited a debt crisis in any African nation, emphasizing their cooperative stance in aiding the continent in addressing its challenges.
The envoy underscored China’s significant contributions, accounting for over 60% of debt repayment delays under the G20 framework. Yuquing emphasized that the Chinese government does not intend to impose sanctions on any country concerning contracts between the nations, emphasizing the positive bilateral relationship shared in various sectors like infrastructure, trade, investment, education, and culture.
Prof. Akanbi Ilupeju, Dean of the Faculty of Arts, echoed the significance of cross-fertilization of ideas between China and Nigeria, emphasizing the potential benefits for students in exchange programs and opportunities to pursue programs in China.
Nigerian stocks show modest 0.02% growth amid sectoral movements
The Nigerian Exchange (NGX) Limited experienced a marginal growth of 0.02% despite subdued performances in the banking, energy, and industrial goods sectors, attributed partly to mild profit-taking.
The market’s breadth index reflected negative sentiment, with 32% losers and 23 gainers during the session. Consumer goods and insurance counters saw upward trends due to sustained interest in specific equities like C&I Leasing and Northern Nigerian Flour Mills.
Deap Capital and Secure Electronic emerged as top advancers, each gaining 10.00 to close at 44 Kobo and 33 Kobo, respectively. Conversely, ABC Transport led decliners, shedding 10.00% to settle at 90 Kobo.
Sectorial performance showcased a mixed landscape, with the industrial goods index closing flat while the banking and energy sectors dipped by 0.35% and 0.18%, respectively. On the other hand, the consumer goods and insurance sectors appreciated by 0.31% and 0.17%, respectively.
At the close of trading, the All-Share Index (ASI) marginally increased by 10.82 points to 71,025.16 points, accompanied by a market capitalization move up to N39.060 trillion from N39.054 trillion.
In trading activities, investors exchanged 483.9 million stocks valued at N4.4 billion in 6,545 deals, indicating a decline in trading value of 29.03%, an increase in volume of 62.71%, and an expansion in the number of deals of 6.04%.
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