Connect with us

Economy

IMF Describes Return of Fuel Subsidies As Disturbing

Published

on

In a virtual meeting with the representatives of the Federal Government, the mission of the International Monetary Fund stated that the resurfacing of fuel subsidies was concerning.

The IMF mission led by Jesmin Rahman, according to a press release, expressed its concerns about rising fuel subsidies to the Nigerian authorities during a virtual meeting.

The Fund also stressed the importance of introducing market-based fuel pricing mechanisms and the need to deploy well targeted social support to cushion any impact on the poor.

The mission commended the Central Bank of Nigeria for merging taking the official exchange rate to the NAFEX window.

However, they recommended the unification of all exchange rate windows and establishing a market-clearing exchange rate.

On monetary policy, they advised the country to strengthen the monetary targeting regime and integrating the interbank and debt markets.

Rahman was quoted as saying, “The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 pandemic.

“Gross Domestic Product growth turned positive in the fourth quarter of 2020, and growth reached 0.5 per cent year-on-year in Q1 2021, supported by agriculture and service sectors.

“Nevertheless, the employment level continues to fall dramatically and together with other socioeconomic indicators, is far below pre-pandemic levels. Inflation slowed down in May but remains elevated at 17.9 per cent, owing to high food prices.

“As oil prices and remittance flows recover, the balance of payments has slightly strengthened, although imports are rebounding faster than exports and foreign investment subdued resulting in forex shortage.”

The mission urged the government to keep reliance on CBN overdrafts for deficit financing within legal limits.

It also asked the Federal Government to strengthen budget planning and public finance management practices to allow for flexible financing from domestic markets for better integration of cash and debt management.

The IMF applauded the Federal Government’s efforts towards containing the transmission of COVID-19 in the country and the COVAX vaccination programme.

It backed efforts to acquire additional doses from countries with surplus stocks.

“The extension of the moratorium on principal payments of qualifying credit facilities on a case-by-case basis through March 2022 should be limited to viable debtors with strong pre-crisis fundamentals.

“CBN stress tests show that the banking system would remain adequately capitalised except in case of a severe deterioration of credit quality.

“Nevertheless, it is not clear what share of forborne loans may turn non-performing as the impact of the pandemic subsides.”

It added that since NPLs often rose at the tail of economic crisis, CBN’s strong oversight remained critical to safeguarding financial sector stability.

The Punch

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy

Naira Makes More Recovery, Sells at N1,453/$1

Published

on

By

The Naira continued its appreciation at the official market on Thursday, March 21, 2024 to close at N1,453.28/$1, according to data from the Nigerian Autonomous Foreign Exchange Market (NAFEM).

This represents an appreciation of N39.33 when compared to the N1,492.61/$1 it closed on Wednesday, March 20, 2024.

The intraday high was N1,598/$1, while the intraday low was N1,300/$1, representing a wide spread of N298/$1.

Similarly, the Naira appreciated against the dollar at the parallel window to trade at N1,500/$1, this represents an appreciation of N20.00 as against the N1,520 /$1 it traded the previous day.

The Naira also appreciated slightly against the British Pound to trade at N2,000/£1 as against the previous trading day’s price of N2,020/£1 representing a gain of N20 for the local currency.

The Canadian dollar, however, closed flat against the naira to trade at N1,270/CA$1 same as the N1,270/CA$1 it traded the previous day representing a decline of N20 in the local currency.

The Naira gained N30 against the Euro to trade at N1,670/€1 as against the previous closing price of N1,700/€1.

Continue Reading

Economy

Naira Gains Against Dollar, Trades at N1,603/$1

Published

on

By

The Naira, Tuesday continued its recovery against the American dollar as it traded at N1,603.38/$1, data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) window has shown.

This represents a gain of N15.48 when compared to the N1,617.96/$1 it closed on, on Monday, March 11, 2024.

The intraday high was N1,637/$1, while the intraday low was N1,425.35/$1, representing a lean spread of N211.65/$1.

Meanwhile, the Naira gained N12 against the dollar at the parallel market as the local currency appreciated to N1,603/$1 as against the N1,615 /$1 it traded the previous day. As it stands, the naira is trading at the same rate at both official and parallel windows.

The Naira, however, slumped against the British Pound to trade at N2,050/£1 as against the previous trading day’s price of N2,030/£1 representing a loss of N20 for the local currency.

After about two weeks of closing flat against the Canadian dollar, the naira slumped massively to trade at N1,300/CA$1 on Tuesday, representing a decline of N150 when compared to the N1,150/CA$1 it traded the previous day.

The Naira lost N35 against the Euro to trade at N1,740/€1 as against the previous closing price of N1,705/€1 representing a loss of N35 for the local currency.

Continue Reading

Economy

Binance to Close Shop in Nigeria, Stops Transaction, Trading in Naira

Published

on

By

By Reuters – Binance will stop all transactions and trading in Nigeria’s local currency after March 8 amid a country-wide crackdown on crypto exchanges that have been blamed by authorities for feeding a black market for foreign exchange.

It will stop supporting withdrawals after Friday and any remaining balances in Nigerian Naira will be automatically converted into Tether – a stablecoin whose value is pegged to the U.S. dollar.

Last week, Nigerian authorities detained two Binance senior executives on undisclosed charges as part of the crackdown.

They were still in custody, their local lawyer said before a parliamentary committee on Monday.

Source: Reuters

Continue Reading

Trending