Small Exchange: Nigerian money-changers, Guyana’s forex intervention and new OFX boss
The week’s currency news rounded up.
Who gets access to foreign currency in Nigeria?
Since November last year, Nigeria’s State Security Service (SSS) have arrested money-changers across the country, perceptibly in an effort to quell the tumbling value of the naira.
Previously $US1 dollar could be bought for about 465 naira. These days, as a result of tougher restrictions, money-changers cannot accept more than 400 naira for each dollar exchanged.
Lagos-based investment bank Vetiva Capital Management’s director Pabin Yinkere says these actions created “an even blacker [ie more secretive] market,” The Economist reported late last week.
Nigeria is dependent upon imports but without access to foreign currency, companies are struggling to cope. Banks supposedly sell dollars for around 315 naira each but few actually have the currency and those that do are reluctant to part with their limited supply.
Guyana’s private sector criticise government’s forex intervention
Guyana’s leading advocate for private businesses, the Private Sector Commission (PSC) has denounced the government’s stricter regulations and tighter monitoring of the country’s foreign exchange market.
The Bank of Guyana will be closely watching commercial banks and non-bank currency exchanges.
In a recent statement the PSC said “foreign direct investment in the economy has already slowed and a policy which prevents the repatriation of the earnings of these companies has the potential to move the influx of investment from a trickle to a halt”.
The PSC said the government has tread this path before with “disastrous consequences to the economy”.
OFX Group axe CEO Richard Kimbler
Last week foreign exchange provider OFX Group (previously OzForex) dumped its chief executive Richard Kimber, citing his poor execution of the company’s growth strategy.
Kimber’s replacement is ex-GE Capita, Australia and New Zealand, president and CEO Skander Malcolm.
The outgoing CEOs strategy was to double company revenue to $200 million through a US expansion and an industrious investment in marketing.
“Due to the ongoing roll-out and refinement of its performance-based marketing program, client additions in Australia during Q3 were below expectations,” OFX Group said in a recent market update.
“However, these are expected to improve through the remainder of the year as spend is allocated to mediums that generate the highest returns.”
Each week Small Exchange sums up currency news from around the globe and looks at how it impacts exchange rates and options.