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Inflations Decline: Analyst Urges CBN to Rectify Multiple Exchange Market

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Although, Nigeria’s inflation rate fell for a fifth consecutive in June even as food-price growth surged, Lukman Otunuga, research analyst at Forex Times, has urged the Central Bank of Nigeria (CBN) to now focus on rectifying the multiple foreign exchange market as part of strategies to regain investors’ confidence.

The Country’s inflation eased to 16.1 percent from 16.3 percent in May, the Abuja-based National Bureau of Statistics said in an emailed report Monday.

Commenting on the NBS inflation data, Otunuga said that sentiment towards the largest economy in Africa was uplifted on Monday following reports that the nation’s inflation declined for a fifth straight month in June, to 16.1%.

“The continued signs of price stability in 2017 are likely to stimulate investor sentiment as Nigeria wrestles with a currency crisis and Dollar shortages created by low oil”, he said.

Meanwhile, NBS said, the median of 15 economists’ estimates compiled by Bloomberg was for 16 percent. Prices rose 1.6 percent in the month.

Inflation has been above the upper end of the central bank’s target band of 6 percent to 9 percent for two years. Governor Godwin Emefiele kept the main policy rate at a record high of 14 percent since last July to fight price growth and support the naira even as the economy has contracted for five consecutive quarters.

It will next review the rate on July 25. Emefiele said last month tight monetary policy will continue.

The average gasoline price rose 1.2 percent in June from a year earlier compared with a 10.3 percent increase in May, the statistics office said in a separate report. Food inflation accelerated to 19.9 percent from 19.3 percent, driven by the cost of bread and cereals, meat, fish and potatoes, agency said.

“What we think drove inflation down is the high base effect,” Pabina Yinkere, an analyst at Vetiva Capital Management, said by phone from Lagos. “Inflation is going to be around for a while driven by food prices. We are going into harvest season nonetheless, so numbers will continue to come down.”

A dollar shortage in Africa’s biggest oil producer has contributed to price growth as importers resorted to buying hard currency on the black market at a higher cost. Investors blamed the central bank for compounding the crisis by tightening capital controls and trying to prevent further weakening of the naira, which they said contributed to the economy contracting in 2016 for the first time in 25 years.

Otunuga said, “With the Central Bank of Nigeria’s constant intervention in the forex market slowly closing the disparity between the parallel and official exchange, the cost-push inflation concerns have somewhat receded.

“While the Naira may witness further stability in the coming months as the CBN intervenes, multiple exchanges have left the foreign exchange divided and needs to be rectified in order to boost investor confidence. On the macro front, if inflation continues to follow a negative trajectory, the Naira stabilizes and other forms of hard economic data improve, the CBN may be handed an opportunity to cut interest rates to support economic growth”, he advised.

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E-Financial

Customers to Sue Banks over Stamp Duty Collections

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Stakeholders have called on the Central Bank of Nigeria (CBN) to withdraw its circular mandating banks to collect stamp duties from customers’ bank accounts, stressing that such directive and practice is unconstitutional, according to the Tribune.

According to them, if the practice of deducting stamp duties from customers’ bank accounts is not suspended, it is expected that other stakeholders would challenge the banks in court, on a case by case basis.

Thus, the impending legal suits that would emanate as a result are likely to disrupt the activities of banks and result to additional legal costs, they warned.

Stakeholders at various occasions have also charged deposit money banks to suspend the practice of collecting stamp duties on receipts for deposits and transfers by customers.

The Stamp Duties Act (SDA), Chapter S8, Laws of the Federation of Nigeria (LFN) 2004 (SDA) provides the legal basis for the imposition and collection of stamp duties in Nigeria.

A tax audit and financial advisory services firm, Deloitte, in a document titled: “Stamp Duties on Bank Deposits and Transfers: Are There Unresolved Issues?” and obtained by Tribune stated that, stamp duties are chargeable on all instruments relating to matters executed between a company and individual, group or body of individuals and those executed between persons or individuals. The instruments the firm noted, upon which stamp duties are chargeable include bond, bill of exchange, promissory note, covenant, conveyance on sale, lease, mortgage, among others.

This general rule according to the tax experts did not include receipts for transfer to self, transfers from savings accounts and receipts in respect of salaries and wages, yet, further to a statement issued by CBN on 21 January 2016 banks have continued to deduct these duties.

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UBA Disrupts the Market, Delights Customers with Callback Technology

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It would appear that the United Bank for Africa Plc has carved a niche for itself and gone way above its peers with its deployment of Al-powered Callback Technology.

The Al-Powered Callback Technology is one that enables the bank to call back customers instantly when they contact the bank for one reason or the other.

The UBA Group seems to have taken advantage of this high-powered system that even western banks are yet to fully implement as it has gone beyond the legacy banking systems, to omni channel marketing and social media lead generation.

This largely involves meeting its customers where they are – on websites, email, social networks, and cross-device platforms.

It is interesting to note that customers calling the bank for various reasons now have the option of requesting a call back to get on demand information. This has been implemented by using web to phone callback technology developed by Lucep.

Basically, the way it works is that customers can see the website widget deployed on the bank’s website for several financial services and products, wherein they can enter in their name and number, and select the reason for which they want a call back.

Thereafter, the Lucep AI takes the callback request, and distributes it to the right team, ensuring it goes to an authorized member of the team who has the app on their smartphone. This member can then connect back to the customer through the app itself.

Such instant response systems have huge benefits especially when it’s about following up on new customers who are inquiring about banking services.

If for example, a potential client is searching for the best mortgage rates and calls several banks including UBA.

UBA being the only bank that has implemented this Al -powered technology with an instant lead response system, is able to give the customer a call-back within one or two minutes.

This activity will naturally give the bank an edge over its competition as it will probably be the first to reach the customer back. The bank is therefore able to engage customers and offer their services faster than any other bank.

It is this kind of attention to detail, personalized service, and deft use of the latest technologies that has helped UBA stay ahead of its competitors in Africa, and ahead of the trends in the global banking industry.

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Five ‘Must’ Know Before Putting Your Money in Bitcoin

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Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Bitcoin is now worth $4,317.

Due to this, many are encouraging others to invest in the cryptocurrency. Nigerians are slowly embracing Bitcoin.

In line with this, Jumia Travel, the leading online travel agency share things Nigerians must know before joining the Bitcoin train.

More People Are Using Bitcoin
Despite the fact that some Nigerians are struggling to accept Bitcoin, more people are embracing it after years of gradual growth.
Hence, whether we like it or not, Bitcoin is the future and we have no choice than to use it.

Retailers And Vendors Are Accepting Bitcoin
You can now pay for whatever you purchase online with Bitcoin as some retailers have made it possible to settle transactions with it. Some notable companies that accept Bitcoin include Expedia, Microsoft, Subway, Newegg, TigerDirect, Tesla and PayPal. So, do not be surprised when some Nigerian companies start to accept Bitcoin.

Bitcoin Transfers Are Fast And flexible
While many financial institutions charge you or take days to process transactions, Bitcoin allows transfers from one account to another almost for free. Of course, you must already have your money in Bitcoin form. There is no need for any middlemen. As a result, the transfer is seamless.

Extremely Volatile
Bitcoin is still growing like earlier mentioned and there are a number of market factors that influence it. It very dependent on the rules of demand and supply.
The more people are willing to buy Bitcoins, the more the Bitcoin value will increase. Conversely, if more people sell, the prices will decline.

Treat It As Speculating, Not An Investment
Cryptocurrencies have a bright future as a new way to conduct commerce and business. That is not the same thing as saying that their value right now is sustainable. It’s early days yet, and, while the number of businesses accepting cryptocurrencies are growing, it’s not big enough for most of the demand to be built on legitimate trade.
This means that buying cryptocurrencies is speculation, not investment. Hence, you should be willing to lose the money you invest in buying Bitcoin!

 

 

 

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