The bad days for Naira continues today 19th July, 2023 with the greenback exchanging to Naira as high as N850 in the black market within major cities like Lagos, Abuja and Kano, IgbereTV has learned.
The Naira has been on a free fall from around N745 to Dollar, since the central Bank of Nigeria announced official floating of the currency allowing the market to determine the exchange rates based on demand and supply.
See today’s Dollar Naira (USDNGN) exchange rate and other major foreign currencies in the black (parallel market) also known as Aboki FX.
Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Selling Rate 845
Buying Rate 828
Euro to Naira (EUR to NGN) Exchange Rate Today
Buying Rate 911
Selling Rate 902
Pounds to Naira (GBP to NGN) Exchange Rate Today
Buying Rate 1112
Selling Rate 1097
Meanwhile the Apex bank on Monday announced a significant reduction in the cash reserve requirement (CRR) for merchant banks, lowering it to 10 per cent from the previous 32.50 per cent.
The change takes effect from August 1, 2023.
According to ThisDay, the CBN announced this in a circular dated July 14, 2023, and signed by CBN Director, Banking Supervision Department, Mr Haruna Mustafa, which was directed to all merchant banks.
CRR is a monetary policy tool used by central banks to manage and regulate the money supply in an economy.
Specifically, it refers to the portion of deposits that banks are required to hold with the central bank.
Notably, an increase or reduction in the CRR could have several effects on banks and the overall economy.
While an increase in CRR will reduce the banks’ capacity to lend to borrowers, a reduction in CRR will make more funds available to the banks to lend to customers.
The CBN explained that the reduction in the CRR was expected to boost the banks’ ability to avail of increased infrastructure, real estate, and other long-term financing needed to support the development of the Nigerian economy.
The CBN circular with reference number: BSD/DlR/PUB/LAB/016/018, captioned “Review of the Cash Reserve Requirement (CRR) Regime for Merchant Banks,” was addressed to all merchant banks in Nigeria.
The letter read: “The Central Bank of Nigeria (CBN) hereby informs all Merchant Banks that it has approved a reduction in their cash reserve requirement from 32.5 per cent to 10 per cent effective August 1, 2023.
“The above regulatory measure is in recognition of the nuanced business model of the Merchant Banks, in particular their wholesale funding structure, regulatory restrictions from the retail market and permissible activities vis-a-vis conventional commercial banks.
“The measure is expected to boost the banks’ ability to avail increased infrastructure, real sector and other long-term financing needed to support the development of the Nigerian economy.
“The CBN will continue to monitor market developments and implement measures to address unique challenges the merchant banking sector faces. Please be guided accordingly,” the letter concluded.
Reacting to the measure, a former Commissioner for Finance in Imo State, Prof. Uche Uwaleke said it was a welcome development.
In a brief response to ThisDay, he stated that the measure would place the wholesale banks in a stronger position to attend to the financing needs of the real sector while calling for a similar slash in the CRR of Deposit Money Banks (DMBs).
“I consider this a welcome development which will place the wholesale banks in a stronger position to attend to the financing needs of the real sector.
“By the same token, the CBN should consider reducing the CRR for DMBs from 32.5 per cent to, say, 25 per cent given the high MPR.
“The huge evidence of non-monetary influence on inflation supports this recommendation.
“Furthermore, it’s a no-brainer that increased liquidity in the banking sector following a reduction in the CRR has the potential of lowering interest rates with positive pass-through to the stock market,” he added.
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