The Central Bank of Nigeria has openly made its position known regarding flying rumors of the possible devaluation of the naira.
Since the virus has been wreaking havoc on global commerce, Nigeria has also felt the impact as it has officially reported two cases within the state.
The virus which has affected global oil trade; crashing the prices puts the Nigerian state in a dangerous position. This belief is held by many and a devaluation of the naira appears to be a possibility.
The Apex bank through a document dated 12-03-2020 and signed by Isaac Okorafor, Director, Corporate Communications said the “Market Fundamentals Do Not Support Naira Devaluation at This Time”
According to the Central bank of Nigeria (CBN), it “wishes to note with displeasure, the rumours and speculative activities of unscrupulous players in the foreign exchange market, borne out of the impression that the CBN is on the verge of devaluing the Naira, and triggering panic in the FX Market. These rumours are false, unwarranted and calculated to serve their dubious and selfish ends.”
The Apex bank went further saying it has begun a coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and other agencies to uncover the unscrupulous persons and FX dealers who are creating panic and will punish them according to the full extent of the law ,even with the charge of economic sabotage.
The CBN said it has for four years successfully maintained relative stability in all segments of the foreign exchange market, which has enabled people to plan and to conduct their genuine FX transactions with ease.
As much as the virus has affected global trade most especially the oil market which Nigeria owes majority of its FX inflow to, the CBN maintain that the “size of Nigeria’s foreign exchange reserves remains robust and comfortable, given the current realities of Nigeria’s genuine and legitimate FX demand. As such, the CBN remains able and willing to meet all genuine demand for foreign exchange for legitimate transactions”
Devaluation according to the Nigerian Bankers Bank believes owing to the current circumstances and macroeconomic fundamentals, it will not devalue the naira and for anyone caught disrupting the sanity of the FX market, will be visited with the full weight of the law.
On crypto exchanges, Naira is trading above 400NGN as at Press time.
Binance Launches Option Trading on its Mobile App
Binance has announced the launch of its Option Trading platform on its Mobile Apps. The platform which is available on the latest update of the exchange’s Mobile App was recently released allows the millions of users on the Binance ecosystem to trade on various markets.
What’s an Option?
“Options are contracts that give the bearer the right, but not the obligation, to either buy or sell an amount of some underlying asset at a pre-determined price at or before the contract expires”. Options can be based on a wide range of underlying assets, including stocks, commodities, indices, currencies, cryptocurrencies or even another derivative product.
The Binance Options platform according to Binance offers users a lower entry barrier and provides flexibility required by option traders. With this platform, Binance allows users to take advantage of the price movement of assets within different time frames and enjoy the rewards therefore.
According to Binance, the Binance Options is an American style option which executes traders contracts anytime before the expiration date. The firm boasts of an intuitive design to enhance traders’ trading experience, unlike traditional options products and of a shorter time frame compared to traditional options that range from 10 mins to 1 day.
Arguing further, Binance said traditional options products are less liquid especially such that are far “out of money”. In order to avoid this, the Binance Options are ‘designed with only one strike price which is equivalent to the contract price on Binance Futures’.
The firm continues to marshal on taking giant strides in the industry with its acquisitions, partnerships and launch of new products. Binance which started operations in 2017 continues to against varying odds build a giant and global ecosystem.
The launch of the Binance Options represents the lastest of the many strides which the ecosystem giant is making. Recently, it acquired popular crypto market data aggregator Coinmarketcap and it also announced intention to go into the cryptocurrency mining business.
COVID-19: CBN Responds With Control Measures to Ensure Integrity of the Financial System
The Central Bank of Nigeria (CBN) has responded with policy measures to preserve the nation’s financial system amid the continued spread of the economic impact of the corona virus pandemic sweeping across the globe affecting stocks, crypto market, nation’s economies etc.
The virus which was first noticed in Wuhan, China has now spread to other nations and continents not excluding Nigeria. It has resulted in the death of several thousands of lives and global trade is also having its own hit.
As a nation that depends on crude oil for majority of its foreign exchange, the Nigerian economy has also been affected owing to the crash in crude oil price. In view of this, the Apex Bank has through a circular dated 16th March, 2020 responded to the growing threat which the pandemic bears on the Nigerian economy.
The CBN in the circular has stated that all its intervention facilities are effective from March 1st, 2020 granted further moratorium of one year on all principal repayments. The Bank directs all participating financial institutions to provide new amortization schedules for all beneficiaries.
In boosting economic activities in the country, the CBN has reduced its Interest Rate from 9% to 5% per annum on all applicable intervention facilities. And this is effective from the 1st of March, 2020. Understanding the impact the global pandemic have had on Nigerian businesses, the CBN through the NIRSAL Microfinance Bank has established a N50 Billion facility for households and small- and medium sized enterprises (SMEs). This also includes but not limited to hoteliers, airline service providers, health care merchants etc.
As an active measure against health issues that could affect the economy now or another time, the CBN will grant intervention facilities, loan to pharmaceutical companies intending to expand/open their drug manufacturing plants in Nigerian as well as to Hospital and Healthcare practitioners who intend to expand/build the Health facilities to first class centres.
Deposit Money Banks (DMBs) or Commercial Banks have been granted leave by the CBN to restructure the tenor and loan term of businesses and households most affected by the outbreak of the COVID-19 virus. This is particularly those in the Oil & Gas, Agriculture and Manufacturing.
According to the CBN, it will “work closely with DMBs to ensure that the use of this forbearance is targeted, transparent and temporary, whilst maintaining individual DMB’s financial strength and overall financial stability of the system.
As the corona virus takes the world on in various areas of human endeavours, policy measures which would sustain and cause the economy to grow are ever needed. The CBN has said it will continue to monitor developments and will issue further updates as may be appropriate.
MoneyGram’s New Time Remittance Technology backed by Visa not Ripple
A new service introduced by remittance giant (MoneyGram) which allows users to send and receive money in real-time has been credited to visa and not the work of its blockchain-based partner (Ripple) in an announcement by representatives of the company.
The recently launched Fastsend, a new service which allows clients to send money in real-time to a phone number through a mobile application or dedicated website. While responding to enquiries from news sources about the latest concept, it was revealed to much surprise that MoneyGram did not make use of the technology of Ripple to achieve the latest product.
Do we need blockchain for real-time settlements?
MoneyGram Chief Operating Officer, Kamila Chytil informed news sources that FastSend makes use of Visa’s Direct Original Credit Transaction to send funds to bank accounts making use of Debit card deposit which is clearly not blockchain-backed or related.
Without the need for DLT, the dedicated website and app make use of an open-source cloud-based microservices. Chytil further stated that although Ripple is not involved in the new product, the firm still makes use of Ripple’s blockchain in other fields of the company.
Also, Chytil made mention of MoneyGram’s continuous effort on how to utilize blockchain in areas where it could assist to solve data privacy and regulatory obligations via distributed ledger technology. In her remarks, she spoke highly of DLT technology and cryptocurrencies, stating that the firm believes blockchain to be the future of global cross border payments and transfer of money.
As MoneyGram continues to research on the multiple use cases in order to tap into Ripple’s tools while integrating with the recent version of Ripple’s service suit to introduce cash-out service to all network members.
It is worth noting that Ripple is gaining increased support and approval among financial institutions to provide them with its DLT services in Africa with the National Bank of Egypt joining its network, this has been seen as a welcome development as it would do well for the inward remittance within the region the Ripple Network.
Nigeria Calls For an Extension of the Time Set for the Eco Currency Launch for West Africa
Nigeria, the country with the largest economy in Africa calls for a delay in the progression of Eco Currency.
Nigeria on Monday has expressed her view on the issues of the progress made so far in the creation and official use of the Eco currency for the West African region.
According to the Presidential Tweet on twitter;
“Nigeria’s position on the Eco is that the convergence criteria (between states) have not been met by the majority of countries” which will adopt this common currency”
“There, therefore, has to be an extension of time on the take-off of the single currency,”
Nigeria has its own currency, the Naira.
The Eco single currency has been a controversial issue since the idea was initiated. It was after more than 25 meetings on the subject, that the 15 member countries of the Community of West African States (ECOWAS), finalized that it would be launched in 2020.
There is currently eight out of the 15 ECOWAS countries using the CFA franc, but were looking to cut financial ties from France, their former colonial power.
The height of the controversy followed after President Ouattara of Ivory Coast all of a sudden denounced CFA for the francophone countries for the Eco currency following Emmanuel Macron’s visit to the country.
Nigeria, a member of ECOWAS, and some other Anglophone West African countries denounced the agreement. This is because the monetary policies governing the issue of Eco currency doesn’t align with the requirements adopted in the region to set up the single currency.
Written By Ogbuowelu Anthony Uchechukwu