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CBN signals end to official rate regime for naira

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The Central Bank of Nigeria (CBN) may soon allow the naira to freely find its value, with a possible depreciation on the official rate, usually pegged at about N305/$, an update on its website has indicated.

The development is signaling an end to the most criticised foreign exchange rate window, which has been used mostly for government’s critical businesses that affect the public, particularly the importation of petroleum products.

If the move sees light of day, it will mean that the value of the naira at the official window is depreciated with its concomitant closure of the peg.

Yesterday, the apex bank, as opposed to the usual publication of the fixed exchange rate, opted to publish that “the rate will be market-determined.”

According to a report, the President of Shippers Association of Lagos State, Jonathan Nicol, said the Nigeria Customs Service had allegedly directed importers to pay for duties at the rate of N326 per dollar against the official rate of N306, citing an order from the CBN.

Also yesterday, the interbank rate depreciated by 0.2 per cent to N360.43 per dollar at the close of trading, while the parallel market remained steady at N360 per dollar.

A move toward a market-determined exchange rate would be welcomed by investors, who have long accused government of some level of capital controls and bemoaned multiple exchange rates.

The Chief Executive Officer of Nigerian Investment Promotion Council, Yewande Sadiku, was quoted as saying the apex bank was in talks with other agencies to move to a single rate for the nation’s currency.

For an economic analyst at Ecobank, Kunle Ezun, “putting that on the website means the central bank is gradually moving towards a single exchange-rate window. It is making the exchange rate more liquid to attract more inflows.”

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Nissan to recall over 40,000 cars due to malfunction of brake fluid leak

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Japanese automaker gaint Nissan says,  it’s recalling nearly 400,000 vehicles in the U.S. because of a braking system defect that could cause them to catch fire.

Users and Owners are advised to park affected vehicles outside and away from structures if the anti-lock brake system warning light comes on for more than 10 seconds.

The Japanese automaker says a pump seal may become worn down and cause brake fluid to leak. “If the warning is ignored … the brake fluid leak may potentially create an electrical short in the actuator circuit, which in rare instances, may lead to a fire,” the company says in documents sent to the National Highway Traffic Safety Administration.

The recall affects four different models in the U.S.: the Nissan Murano SUV, model years 2015 to 2018; Maxima sedans, model years 2016 to 2018; and the Infiniti QX60 and Nissan Pathfinder SUVs, model years 2017 to 2019.

Nissan says in a statement emailed to NPR that it is working on a fix and that owners of affected vehicles will be notified beginning in early December 2019. “Once the remedy is available, owners will receive a final notification letter asking them to bring their vehicle to an authorized Nissan dealer or INFINITI retailer to have the remedy work completed at no cost for parts or labor,” the company says.

This isn’t the first time Nissan has had problems with brake fluid leaks. Last year, for example, Nissan recalled more than 215,000 vehicles. The automaker says vehicles in the 2018 recall that haven’t been repaired are included in the current recall.

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World food prices hike for first time in five months: U.N. FAO

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World food prices rose for the first time in five months in October, boosted by jumps in quotations for sugar and cereals, the United Nations food agency said on Thursday.

The Food and Agriculture Organization (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 172.7 points in October, up 1.7% on the previous month and 6.0% year-on-year.

FAO also predicted that cereal production would be 2.704 billion tonnes in 2019, slightly lower than its last forecast.

The FAO sugar price index jumped 5.8% from September levels, largely because of expectations of lower supplies in the year ahead following forecasts of large reductions in sugar output in India and Thailand.

The cereal price index rose 4.2%, with wheat and maize export prices climbing on the back of reduced crop prospects in several major producing countries and “robust trade activity”. By contrast, rice prices fell, hit by subdued demand and expectations of an abundant basmati harvest.

The vegetable oil price index increased 0.5% to reach its highest level in more than a year, while the meat price index rose 0.9%, driven by higher import demand especially from China.

By contrast, the dairy price index dropped 0.7% in October, as lower quotations for cheese offset increases in those for skimmed and whole milk powders, FAO said.

FAO lowered its forecast for global cereal production in 2019 by some 2 million tonnes, pegging world cereal output at 2.704 billion tonnes, but still up 1.8% from 2018 levels.

The U.N. agency said worldwide coarse grain production in 2019 was seen at 1.425 billion tonnes, down 1.3 million on the previous forecast.

Wheat output was seen at 765 million tonnes, down nearly 1 million tonnes on the last outlook, but still on course to set a new record and up 4.5% on 2018 levels.

The forecast for global rice production was put at 513.4 million tonnes, little changed on the previous forecast and slightly below 2018 levels.

Source: Reuters

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