The naira may yet face another hurdle in the international market as international merchants on Monday started rejecting naira debit cards for transactions, Daily Independent reports.
A source informed Daily Independent on Monday that some shoppers began to notice the trend at the weekend but development became worrisome on Monday when they were out rightly rejected.
“I was told severally to use another card while attempting to buy an item through eBay”, our source said.
He, however, was able to complete the purchase after using his dollar denominated debit card.
“It was my dollar denominated debit card that saved the day for me”, he added.
Investigation by Daily Independent confirmed the development as an attempt to shop on Amazon by our correspondent with his naira denominated debit card was rejected.
Those who spoke with Daily Independent said the decision of these international sellers was a result of the travail of the naira in the last one week.
The naira suffered a temporary depreciation last week when the dollar was sold between N405 and N420 on Thursday. Operators said it was triggered by speculations in the market, as a result of the sudden crash in oil price at the international market on Monday.
Before now, the dollar price had been stable around N360 due to interventions by the Central Bank of Nigeria (CBN).
The CBN reacted when it said the spike was as a result of activities of speculators who attempted to hoard the dollar to create artificial scarcity.
The naira later traded between N364 and N380 to a dollar on Friday at the Bureau De Change segment.
The CBN said in a statement that it had not devalued the naira, and that market fundamentals did not support naira devaluation at this time.
It also stated, “We have begun a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit and related agencies to uncover the unscrupulous persons and the FX dealers who are creating this panic. And the full weight of our rules and regulations will be meted out to them, including, but not limited to, being charged for economic sabotage.
“For nearly four years, the CBN has successfully maintained relative stability in all segments of the foreign exchange market, which has enabled investors, households and other economic agents to plan and conduct their genuine foreign exchange transactions with relative ease.”
Meanwhile, the CBN on Monday, in an emergency meeting, unveiled stimulus measures to cushion the impact of COVID-19 pandemic on the Nigerian economy.
The apex bank cut interest rates on all applicable CBN intervention facilities from 9 to 5 percent per annum for one year effective March 1, 2020 and also granted a further moratorium of one year on all principal repayments.
The CBN also created N50 billion facility through the NIRSAL Microfinance Bank for households and small- and medium-sized enterprises (SMEs) that have been particularly hard hit by COVID-19, including but not limited to hoteliers, airline service providers, health care merchants, etc.
The regulator said it acted in response to the coronavirus pandemic which has devastated the global economy creating unprecedented disruptions in global supply chains, sharp reduction in crude oil prices, turmoil in global stock and financial markets.
In a briefing, Godwin Emefiele, governor, CBN, said, “All CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March 1, 2020. This means that any intervention loan currently under moratorium is hereby granted additional period of one year. Accordingly, participating financial institutions are hereby directed to provide new amortization schedules for all beneficiaries.”
To meet potential increase in demand for healthcare services and products, the CBN has opened its intervention facilities, loans to pharmaceutical companies intending to expand/open their drug manufacturing plants in Nigeria, as well as to hospital and healthcare practitioners who intend to expand/build the health facilities to first class centres.
This is in addition to growing the size of existing interventions to the agricultural and manufacturing sectors in Nigeria.
The CBN also granted all deposit money banks (DMBs) leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of COVID-19 particularly oil & gas, agriculture, and manufacturing.
“The CBN would 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”, Emefiele said.
Practical Considerations to Negotiate an Enforceable Joint Operating Agreement in Civil Law Jurisdictions (Netherlands: Kluwer Law International, 2020) By Professor Damilola S. Olawuyi, LL. B (1st Class), BL (1st Class), LL.M (Calgary), LL.M (Harvard), DPhil (Oxford), Professor of Law and Deputy Vice-Chancellor, Afe Babalola University, Ado Ekiti, Nigeria, www.damilolaolawuyi.com. & Professor Eduardo G. Pereira, LL. B (Brazil), LL.M (Aberdeen), PhD (Aberdeen),www.eduardogpereira.com
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