The Nigerian naira is finding it hard to move solidly against the dollar these past few days.
It almost traded at 600 naira to the dollar at the parallel market on Thursday.
This is a four month low for the currency, with no indication that it could be better in coming weeks.
The apparent reason foe Naira’s poor run against the dollar still remains the same – jump in forex supply.
The Chinese yuan has had a bad run for a long time. But at no time has things got worse as it is right now.
China is world’s second largest economy but it has been suffering from the effects of covid lockdown for some time now.
Apart from that, investors have been moving money frantically out of China since the start of the year due to anticipation of covid lockdowns and the possibility that China may suffer from sanctions if it helps Russia against Ukraine.
The yuan yesterday was at a two-year low but it suddenly recovered a bit against the dollar.
Yuan has lost seven percent of its value against the dollar in the last three months.
Nigerians have now made it so that people in Nigeria who use naira atm cards will no longer be able to spend more than $20 or $50 with it online in a month.
Bad news for people who are used to making regular purchases with their cards online, spending in dollar, pounds or euro.
Check below to see what the status is as at May 1, 2022.
UBA – $20
Zenith – $20
First Bank – $50
GTBank – $20
Sterling – $20
Union – $20
This is expected to curb the massive loss naira has had against the dollar.
Inflation is big trouble these days, and for countries that are contemplating economic growth, inflation appears to be the biggest challenge.
There has been news that soon, China may become the largest economy in the world but COVID-19 has been relentless in that country. Supply chain disruptions will increase, demand will be affected negatively, and prices will soar.
However, the Ukraine war is expected to spark a protracted cost of living crisis.
As per US yields, they didn’t change course despite the uncertainty that was reported on growth. Market confidence is still high.
It seems the war in Ukraine is wreaking havoc on the euro. Just today, it is revealed the euro fall is a record one judging by its relationship with the dollar for over five years.
It is even more surprising that the euro has fallen double digits against the Russian ruble while fell massively after the war in Ukraine began a few months ago.
The Russian ruble has since recovered but it is hard to tell what the future holds for the euro.
A bigger part of this euro fall is blamed on the impending recession that is sweeping across Europe.
We learn about the terrible performance of silver and gold over the past week.
For the year, silver is now marginally down.
Gold on its part was $14 down this week. It traded at $1915. Remember, it fell too last week.
Silver traded at $23.47 recently this week, which shows it down 62 cents, extending the recent falls.
Both the yen and euro have also fallen significantly over time these days.
There are perspectives that the dollar too is in trouble but we wait to see more of that in coming weeks.
The weakening yen is the number one concern for the Japanese government. The fall of the currency has made worse the imported inflationary pressures, while there is also growing global commodity and oil costs.
Finance minister, Shunichi Suzki revealed that the benefits accruing to the economy is much lower than the damage to the economy.
The Ukraine crisis has also contributed negatively to the Japanese economy.
The government has not replied on how it plans to manage the problems.
This year, the yen has lost about 10 percent to the dollar.
At the interbank foreign exchange, the rupee opened lower at 76.05 against the U.S. dollar, registering a decline of 14 paise over its previous close.
On Monday, the rupee rose marginally to 75.91 against the U.S. dollar.
“Most Asian and emerging market peers are trading weaker against the US dollar this Tuesday morning, and rebounding crude oil prices could weigh on sentiments,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
According to information reaching us, China is buying Russian oil and coal with its local currency (yuan) as Western sanctions on Moscow spur trade deals that don’t rely on the US dollar.
Last month, several Chinese firms used yuan to purchase Russian coal, which will begin arriving this month and mark the first commodity shipments purchased in China’s currency since the war in Ukraine began, Bloomberg reported.
Most emerging market currencies will continue to struggle against the mighty dollar over the coming year as the U.S. Federal Reserve finally delivers expected aggressive policy tightening, according to a Reuters poll of FX strategists.
Central banks in emerging market economies have been bracing for this for months by hiking their benchmark interest rates. But the actual moment when the Fed delivers half-point rate increases and rapid balance sheet reduction still matters.
Minutes from the Fed’s March meeting showed officials had generally agreed to trim the central bank’s balance sheet by $95 billion a month, providing a major boost to the greenback which was already riding high.