Nigeria cancels crude for naira deal! What impact does this have on you?
Read this week's edition of our Global news review and know how it impacts you and your business...
Nigerian News: Naira for crude cancellation: Impact on Nigerian Consumers
With local refiners now needing to buy crude oil in dollars instead of naira, their operational costs will rise due to foreign exchange expenses.
Our thoughts:
Higher fuel costs will contribute to inflation, as transportation, logistics, and manufacturing costs increase, affecting food prices and general cost of living.
If local refiners struggle to secure crude oil at competitive rates, there could be disruptions in supply, leading to potential fuel shortages.
But who really benefits from this?
Foreign Crude Suppliers & Traders – International crude suppliers who sell to Nigerian refineries in dollars stand to gain from increased demand.
Fuel Importers – If local refining becomes less viable, Nigeria may revert to increased fuel imports.
Speculators in the Forex Market – The increased demand for dollars from refiners could drive forex volatility, creating opportunities for speculators who profit from fluctuations in the exchange rate.
NNPC & International Buyers of Nigerian Crude – With NNPC prioritizing forward contracts, it may secures foreign exchange earnings from crude sales which SHOULD benefit the government’s dollar reserves
Sounds a lot like back to square one. We hope this development is temporary.
If this policy remains in place, Nigeria could see increased reliance on fuel imports, potential refinery struggles, and a weakened impact of domestic refining on forex stability.
What do you think, though?
Global News: Trump Family Has Held Deal Talks With Binance Following Crypto Exchange’s Guilty Plea
Possible good deal for Binance with a truck load-like sprinkle of ethical concerns
Given Binance’s ongoing regulatory battles in the U.S., having the Trump family as stakeholders could provide some level of political leverage.
Our thoughts:
A high-profile partnership with the Trump family could lend credibility to Binance’s U.S. operations, possibly attracting more institutional investors and users.
Binance has also faced scrutiny and legal challenges in the U.S, If the deal involves a cash injection from the Trump family, it could help stabilize Binance.US and expand its market presence.
How Would the Market React If the Deal Closes?
If Binance secures the Trump family as stakeholders, the crypto market— especially Binance’s BNB token— it will be seen as additional positive political sentiment in favour of cryptocurrencies as a whole.
On the flip side, while the deal could provide Binance some political cover, it could also attract backlash from regulatory agencies that may see it as an attempt to avoid compliance.
There would be many ethical concerns raised, regarding conflicts of interest, and the mixing of political and business interests. This could cause some investors to pull out of investing in Binance.US.
African News: Kenya loses sh2b as war closes bat Sudan plant
The closure of British American Tobacco’s (BAT) operations in Khartoum due to the ongoing conflict in Sudan highlights the direct impact that politics and civil unrest can have on trade.
Our thoughts:
Kenya which exported unprocessed tobacco to this plant has lost approximately $15.5 million in tobacco export earnings due to the closure, which could negatively affect its trade balance.
This loss is particularly impactful given the country’s efforts to grow its agricultural exports. We expect BAT to eventually redirect its production to other plants around the world to continue to meet its customer demand.
The markets will always find a way to move on.
We pray for peace in Sudan!
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