{"id":9538,"date":"2021-07-13T12:54:12","date_gmt":"2021-07-13T12:54:12","guid":{"rendered":"https:\/\/www.buyucoin.com\/crypto-labs\/forex-shortages-force-nigerian-corporates-to-turn-to-parallel-market\/"},"modified":"2021-07-13T12:54:12","modified_gmt":"2021-07-13T12:54:12","slug":"forex-shortages-force-nigerian-corporates-to-turn-to-parallel-market","status":"publish","type":"post","link":"https:\/\/www.buyucoin.com\/crypto-labs\/forex-shortages-force-nigerian-corporates-to-turn-to-parallel-market\/","title":{"rendered":"Forex Shortages Force Nigerian Corporates to Turn to Parallel Market"},"content":{"rendered":"

Nigeria\u2019s ongoing shortage of foreign exchange is forcing corporates and businesses to source this resource on the parallel market, a former official with the Lagos Chamber of Commerce and Industry (LCCI) has said. According to Muda Yusuf, who is the previous director-general at LCCI, these shortages stem from the foreign exchange market liquidity constraints that have been experienced in the first half of 2021.<\/strong><\/p>\n

Investment Risk<\/h2>\n

As noted in a report<\/a> based on data from July 8, 2021, the turnover at one of Nigeria\u2019s multiple official forex markets dropped by 24.5% to $526.79 million. The report adds that most of these trades were consummated at the exchange rate of \u201cbetween N400 and N460 to the dollar.\u201d In contrast, the Nigerian naira\u2019s parallel market exchange rate currently stands at N505 per dollar according to Abokifx<\/a>.<\/p>\n

<\/p>\n

In his remarks, while speaking at the Finance Correspondents Association of Nigeria (FICAN) forum, Yusuf warned that such foreign exchange shortages could negatively impact the country\u2019s banking system. Yusuf explained:<\/p>\n

Foreign exchange illiquidity aggravates investment risk which could negatively impact asset quality in the banking system. Foreign currency-denominated loans account for between 30 per cent and 35 per cent of banks\u2019 loan books. Foreign exchange volatility is associated with risks relating to asset quality and financial stability.<\/p>\n

Conducive Business Environment<\/h2>\n

The report quotes Yusuf arguing the case for a conducive business climate which he insists will \u201ccreate more avenues for investment\u201d for financial institutions. In addition, more profitable asset classes will be needed for such profitable investments to take place, he said.<\/p>\n

Additionally, Yusuf is also quoted stressing the \u201cneed to address the structural, policy, institutional and regulatory constraints in the business environment which would also result in a reduction in non-performing loans in the banking sector.\u201d<\/p>\n

What do you think Nigeria needs to do to end foreign exchange shortages? Tell us what you think in the comments section below. <\/strong><\/em><\/p>\n

Bitcoin News
\nNews, Exchange rate, Financial Institutions, financial stability, illiquidity, Lagos Chamber of Commerce and Industry, Muda Yusu, naira black market, Nigeria foreign exchange, parallel market<\/p>\n","protected":false},"excerpt":{"rendered":"

Nigeria\u2019s ongoing shortage of foreign exchange is forcing corporates and businesses to source this resource on the parallel market, a former official with the Lagos Chamber of Commerce and Industry (LCCI) has said. According to Muda Yusuf, who is the previous director-general at LCCI, these shortages stem from the foreign exchange market liquidity constraints that…<\/p>\n","protected":false},"author":0,"featured_media":9539,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,3],"tags":[],"class_list":["post-9538","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-news","category-coin-news"],"_links":{"self":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/9538"}],"collection":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/comments?post=9538"}],"version-history":[{"count":0,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/9538\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media\/9539"}],"wp:attachment":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media?parent=9538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/categories?post=9538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/tags?post=9538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}