All the wahala surrounding N5000 note and use of coins in Nigeria. Lot of commentators keep talking about 'strength of currency'.

Here's the question; which curency is stronger, Nigerian Naira at 160 naira to one US dollar or the Ghanaian Cedi at 1.9 Cedi to the US Dollar?

Bear in mind that appox 78 Japanese Yen to one dollar, so the Ghanaian Cedi is stronger than the Japanese Yen?

Your thoughts please

Below is the exchange rates as at the moment, bear in mind that exchange rates fluctuates every seconds. Us dollar is the highest on the list below , follow by Ghanaian Cedi, Japanese Yen and Nigeria Naira down below the list, God help our economy.

1.00 USD = 1.89270 GHS
US Dollar ↔ Ghanaian Cedi

1.00 USD = 78.1257 JPY
US Dollar ↔ Japanese Yen

1.00 USD = 157.562 NGN
US Dollar ↔ Nigerian Naira

1.00 GHS = 41.2818 JPY
Ghanaian Cedi ↔ Japanese Yen

1.00 GHS = 83.2492 NGN
Ghanaian Cedi ↔ Nigerian Naira

1.00 JPY = 2.01921 NGN
Japanese Yen ↔ Nigerian Naira


Exchange rate source: www.xe.com

and ?

ghettodreamz: Below is the exchange rates as at the moment, bear in mind that exchange rates fluctuates every seconds. Us dollar is the highest on the below list, follow by Ghanaian Cedi, Japanese Yen and Nigeria Naira down below the list, God help our economy.

1.00 USD = 1.89270 GHS
US Dollar ↔ Ghanaian Cedi

1.00 USD = 78.1257 JPY
US Dollar ↔ Japanese Yen

1.00 USD = 157.562 NGN
US Dollar ↔ Nigerian Naira

1.00 GHS = 41.2818 JPY
Ghanaian Cedi ↔ Japanese Yen

1.00 GHS = 83.2492 NGN
Ghanaian Cedi ↔ Nigerian Naira

1.00 JPY = 2.01921 NGN
Japanese Yen ↔ Nigerian Naira


Exchange rate source: www.xe.com

Does this mean the Cedi is stronger than the naira and Japanese Yen?

It's quite obvious, US dollar is the Most strongest, Ghanaian Cedi is Strongest, Japanese Yen is Strong, and Nigeria Naira Poor owing to Nigeria's bad economy caused by political instabilities among other factors, topic for another day.

@op,
In 2006 1 Naira could buy 64 Pesewa, today 1 Naira can buy 125 pesewa. Go figure!

ghettodreamz: It's quite obvious, US dollar is the Most strongest, Ghanaian Cedi is Strongest, Japanese Yen is Strong, and Nigeria Naira Poor owing to Nigeria's bad economy caused by political instabilities among other factors, topic for another day.

So the Ghanaian economy is better or stronger than Japanese economy because it's 70 Yen to the Dollar and 2 Cedi to the dollar.

Didn't the Ghanaian government just remove 'zeroes' from the old Cedi which was something like 10,000 cedi to one dollar and create the new Cedi, why doesn't our CBN just remove the 'zero' from the N160 to $1 and declare a New Naira at N1.6 to one dollar?

Is it that easy?

I don't know how easy that would be, that's the decision of the Fed. Gov't & CBN to make, precisely it's the agenda of the CBN in monetary stability and creating a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government. But I believe there are many other factors to be considered in Monetary and Fiscal Policies of a country, so I would leave them to doing that. Like I said, there are several other reasons as to why our currency is the worst among the list, even Sudanese currency beats ours badly 1.00 SDG (Sudanese Pound) = 35.7054 NGN (Nigerian Naira), so you can see how bad our currency is, nevertheless I would leave this issue for the financial experts to contribute their own quota on this, but it would do us proud if the government would look into making our currency strong among it's counterparts instead of introducing the new 5k note.

ghettodreamz: I don't know how easy that would be, that's the decision of the Fed. Gov't & CBN to make, precisely it's the agenda of the CBN in monetary stability and creating a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government. But I believe there are many other factors to be considered in Monetary and Fiscal Policies of a country, so I would leave them to doing that. Like I said, there are several other reasons as to why our currency is the worst among the list, even Sudanese currency beats ours badly 1.00 SDG (Sudanese Pound) = 35.7054 NGN (Nigerian Naira), so you can see how bad our currency is, nevertheless I would leave this issue for the financial experts to contribute their own quota on this, but it would do us proud if the government would look into making our currency strong among it's counterparts instead of introducing the new 5k note.

I think exchange compared to the dollar is not the most important factor is determining strength of any currency, how can Ghana currency be better or stronger thna the Japanese Yen?

How much demand worldwide is there for Ghanaian Cedis compared to worldwide demand for Japanese Yen?

For instance if somebody was paying you money for a job you did, which currency would you prefer Dollars, Yen or Cedi's?

@OP & His Supporter:
And so? What the hell is the point you're trying to make? Why don't u bring up suggestions on how to improve the strength of our Naira, or better still, go and live in Ghana and be spending your cedis.

BeraBera: @OP & His Supporter:
And so? What the hell is the point you're trying to make? Why don't u bring up suggestions on how to improve the strength of our Naira, or better still, go and live in Ghana and be spending your cedis.

Is the naira weak? you seem to say it's weak because naira is N160 to $1. but Yen is 78Yen to one dollar and Yen is not weak.

Weak meaans value of a currency is falling uncontrollably, sometimes being too strong is bad for an economy (ask the Greeks who are now suffering casue of the strength of the euro or the Chinese who are accussed of keeping currency artificially low to encourage exports)

Naira has moved from N145 to the dollar to N160 in over 5 years is this weak?

ghana took several zeros off of the cedi years ago, so the figure you're seeing isn't the real value of the cedi.

Ikengawo: ghana took several zeros off of the cedi years ago, so the figure you're seeing isn't the real value of the cedi.

Interesting point.

You use real effective exchange rates to the dollar to determine which currency is stronger. In real terms, the Ghanaian cedi may not be stronger than the naira. The rate you see everyday is the nominal rate.

For example, let's reform the naira. Suppose the naira exchanged for 100 naira to a dollar pre-reform, it means to buy 100 naira worth of goods pre-reform an American needs $1. Now, post-reform we take out two zeros and turn 100 naira to 1 naira, it means to buy 100 naira worth of goods at pre-reform prices, a Nigerian needs 1 naira post-reform. Now this also means to buy 1 naira worth of goods post-reform, an American still needs $1 post-reform.

As you can see, even though the exchange rate has been changed nominally to $1 to a naira, in real terms, the exchange rate remains the same.

This is why we say a currency reform has no effect on real prices- forget organisations such as ICAN that issue statements based on superstitious beliefs and without concrete facts to support their assertions.

It is like deciding to measure in centimeters rather than in meters.

Same nii as my people will say. It does not "affect the price of garri" as some of our Comrades will also say.

Most Nigerians have the misguided belief that exchange rate to dollar is the only determing factor of strenght of a currency.

How on earth will somebody say the Ghanaian Cedi is stronger than the Japanese Yen or South Sudan currency is stronger than Naira.

There are many more factors here, am sure others can enlighten us

In real terms, the Naira is more stronger than the Cedis. You don't use exchange rate parity to determine the worth of a currency but the intrinsic value of the currency under consideration.

The Zimbabwean dollars is a perfect example.

faithin9ja: Most Nigerians have the misguided belief that exchange rate to dollar is the only determing factor of strenght of a currency.

How on earth will somebody say the Ghanaian Cedi is stronger than the Japanese Yen or South Sudan currency is stronger than Naira.

There are many more factors here, am sure others can enlighten us

Exactly, have anyone thought of the purchasing power of the Ghanian Cedis? If I can buy a family size bread for N220 in Nigeria, how much does it cost in Ghanian Cedis? Then convert to Naira

faithin9ja: All the wahala surrounding N5000 note and use of coins in Nigeria. Lot of commentators keep talking about 'strength of currency'.

Here's the question; which curency is stronger, Nigerian Naira at 160 naira to one US dollar or the Ghanaian Cedi at 1.9 Cedi to the US Dollar?

Bear in mind that appox 78 Japanese Yen to one dollar, so the Ghanaian Cedi is stronger than the Japanese Yen?

Your thoughts please

There is a general misconception about the ghanaian currency that many Nigerians have that I think I should dispel.
The new Ghana cedis is a redenomination of the old. The change is mechanical and not as a result of the Ghanaian currency moving positively against the major currencies.
What Ghana did was mere recaliberation of the Cedi where 1newGhana cedis=10,000 old cedis. Infact, the major reason for the revaluation was the prevalent inflation at that time, which was around 10.6%, so in order to stop further devaluation of the Cedis they had to mechanically redenominate the cedis. Mind you, this mechanical change is not as a result of improved economic activities but as a result of the opposite.
Ghana's redenomination of her currency has got to be the highest in the whole of Africa. To even worsen the case 2007 was the third time they were re-valuing their currency. Now there is GH¢ instead of the old worthless ¢ they was used until 2007.
It is like this:
1 GH¢ New=10,000¢ old cedis so even if $1 USD= Gh¢ 1.82 it is still similar to
$1 USD= ¢18200 so what's the fuss?
How has that improved against the dollar? Unless of course one lacks the knowledge of basic mathematics, there is no improvement, the change is only psychological. If you were a billionaire in old ghana Cedis, you becom not even a millionaire but a hundreth thousand naire in the new redenominated currency but buying power has not changed or improved. Just get the new cedi equivalent of the old and you buy thesame fricking items. We can talk of their currency being improved when the old ghana cedis can measure up to thesame figure amount or nearly thesame with the dollar, then you wont need to revalue or get an artificial reduction or atleast the artificial reduction will have an amount figures much more less in decimal amounts to one dollar.

This is really a very simple issue. Decimal places in a currency is not the indicator of the strength of currency. They are merely numerical expressions. Ghana deliberately redenominated it currency via rounding it down several decimal places to make it more 'wieldy'. What was 10,000 cedis now became 1 cedi. 100,000.00 now became 10 cedis and 1 million cedis now became 100 cedis.

Today at current exchange rate, and If Ghana had not redenominated, £1 = N250 = 31,000.00 cedis i.e 3.1 cedis today.

When Ghana redenominated in 2007 , and rounded down decimal places, the exchange rate became 2 cedis to £1 and approximately $1 to 1 cedi. Back then, and as has been the case for a while, Naira hovered around N255 to £1. Meaning N255 bought 2cedis. Today, as we speak Naira is still around £255.00 to £1 whereas it is £1 to 3.1 cedis. Today N255 now buys 3.1 cedis when it only bought 2cedis in 2007. This is why like-for-like comparison is always best to make issues crystal clear. Is it not now obvious which currency is stronger and has greater purchasing power?

Also, it is a measure of Ghana's fiscal mismanagement, even if they are getting it right in many other areas, that their currency has depreciated and lost a whole 1.1 cedis again the sterling pound in 5 years. This would be the equivalent of the Naira depreciating by 91 Naira against the sterling pound to become £1 to N345.00. We all know we have not seen such depreciation in the past 5 years and it is obvious the Ghanaian cedis has lost value quite badly to become less strong in comparison to the Naira as an economic fact.

I have Ghanaian enterpreneur friends who are incredibly annoyed currently with the situation because import cost them significantly more since they now need more cedis to purchase the pounds and dollars to buy their goods abroad. This is impacting horribly on their profit.

INSTEAD OF GOING BACK TO THE FARM UNA DE HIA DE DEBATE WHICH PIECES OF PAPER STRONG PASS

mikolo80: INSTEAD OF GOING BACK TO THE FARM UNA DE HIA DE DEBATE WHICH PIECES OF PAPER STRONG PASS

Please stay away from meaningful and enlightening discussion

Am enjoying and learning from all contributors. . .Nice input by all

The Ghana cedi was just redenominated to easily control the quick devaluation it was witnessing. That 1 GHC equals some naira doesn't mean it can buy what its naira equivalent can. I think they did that just be able to create more currency denominations. If Nigeria decides to redenominate and make 1 naira (154naira) equal a dollar, it still does not mean our One naira can buy what the American dollar can. So in value, u will need more 1 nairas to chase the value of 1 dollar.

I am not an Economist but I do have a concept here. Firstly, every nation on earth is an independent economic subsystem, where prices of good and services are largely dependent on local production. Local production is a key factor in determining the purchasing power of citizens in a country. Therefore, similarity in exchange rates of international currencies may not be necessarily signify the strength of a currency. Comparative variations in forex figures of different countries may be due to:

1. Purchasing power of its citizens
2. Presence or absence of local production
3. Standard of living of its citizens
4. Cost of living of its citizens, and lastly,
5. International political interferences

For example, the Japanese example is a glaring case of international politics because at 1.00 JPY = 2.01921 NGN, Japan is still among the strongest and largest world economies. On the contrary, Nigeria is nowhere among the top 20 economies even with close forex figures to Japan. South Africa, for example, is 1.00 Rand = 19.16 NGN (http://www.xe.com/ucc/convert/?Amount=1&From=ZAR&To=NGN), yet the standard of living is quite higher and local production is quite higher over there. So, I think Economists in the house should enlighten us. That said, I think the greatest problem of Nigeria is 90% importation and 10% exportation. We need visionary leaders to change this ratio to at least 70% exportation and 30% importation.

Spike speaks...

Tony Spike: I am not an Economist but I do have a concept here. Firstly, every nation on earth is an independent economic subsystem, where prices of good and services are largely dependent on local production. Local production is a key factor in determining the purchasing power of citizens in a country. Therefore, similarity in exchange rates of international currencies may not be necessarily signify the strength of a currency. Comparative variations in forex figures of different countries may be due to:

1. Purchasing power of its citizens
2. Presence or absence of local production
3. Standard of living of its citizens
4. Cost of living of its citizens, and lastly,
5. International political interferences

For example, the Japanese example is a glaring case of international politics because at 1.00 JPY = 2.01921 NGN, Japan is atill among the strongest and largest world economies. On the contrary, Nigeria is nowhere among the top 20 economies even with close forex figures with Japan. South Africa, for example, is 1.00 Rand = 19.16 NGN (http://www.xe.com/ucc/convert/?Amount=1&From=ZAR&To=NGN), yet the standard of living is quite higher and local production is quite higher over there. So, I think Economists in the house should enlighten us. That said, I think the greatest problem of Nigeria is 90% importation and 10% exportation. We need visionary leaders to change this ratio to at least 70% exportation and 30% importation.

Spike speaks...

Currency is only a way to ascribe value to activities that ultimately derive goods and services. It is the activity within nations, and the relative efficacy or perhaps even total absence of those activities in comparison to others, that determines why standard of living, size and scale of economy, etc are different for Nations of the world.

For example, when the Japanese have devoted themselves to become manufacturing giants ,to the extent of being one of the largest supplier of vehicular transport and electronics to the entire world, they will naturally have a better economy and standard of living for their citizens, because of their "activities", than the African Nation that does not manufacture anything the world wants. Many African nations, tragically, don't even produce enough of what they need locally let alone think of exporting finished goods that would be significantly more lucrative than the raw and unrefined things we export.

It is the efficacy of actions and processes that matter. Quite an abstract concept but it is the reason poor Nations cannot just print money and proclaim themselves rich.

Gbawe: This is really a very simple issue. Decimal places in a currency is not the indicator of the strength of currency. They are merely numerical expressions. Ghana deliberately redenominated it currency via rounding it down several decimal places to make it more 'wieldy'. What was 10,000 cedis now became 1 cedi. 100,000.00 now became 10 cedis and 1 million cedis now became 100 cedis.

Today at current exchange rate, and If Ghana had not redenominated, £1 = N250 = 31,000.00 cedis i.e 3.1 cedis today.

When Ghana redenominated in 2007 , and rounded down decimal places, the exchange rate became 2 cedis to £1 and approximately $1 to 1 cedi. Back then, and as has been the case for a while, Naira hovered around N255 to £1. Meaning N255 bought 2cedis. Today, as we speak Naira is still around £255.00 to £1 whereas it is £1 to 3.1 cedis. Today N255 now buys 3.1 cedis when it only bought 2cedis in 2007. This is why like-for-like comparison is always best to make issues crystal clear. Is it not now obvious which currency is stronger and has greater purchasing power?

Also, it is a measure of Ghana's fiscal mismanagement, even if they are getting it right in many other areas, that their currency has depreciated and lost a whole 1.1 cedis again the sterling pound in 5 years. This would be the equivalent of the Naira depreciating by 91 Naira against the sterling pound to become £1 to N345.00. We all know we have not seen such depreciation in the past 5 years and it is obvious the Ghanaian cedis has lost value quite badly to become less strong in comparison to the Naira as an economic fact.

I have Ghanaian enterpreneur friends who are incredibly annoyed currently with the situation because import cost them significantly more since they now need more cedis to purchase the pounds and dollars to buy their goods abroad. This is impacting horribly on their profit.

This post amongst others is very insightful.

It clearly means the naira is stronger than the cedi, yet most Nigerians and those posting on nairaland continue to assert that the naira is weaker than the cedi and the proposed N5000 note will only make the things worse.

Gbawe: This is really a very simple issue. Decimal places in a currency is not the indicator of the strength of currency. They are merely numerical expressions. Ghana deliberately redenominated it currency via rounding it down several decimal places to make it more 'wieldy'. What was 10,000 cedis now became 1 cedi. 100,000.00 now became 10 cedis and 1 million cedis now became 100 cedis.

Today at current exchange rate, and If Ghana had not redenominated, £1 = N250 = 31,000.00 cedis i.e 3.1 cedis today.

When Ghana redenominated in 2007 , and rounded down decimal places, the exchange rate became 2 cedis to £1 and approximately $1 to 1 cedi. Back then, and as has been the case for a while, Naira hovered around N255 to £1. Meaning N255 bought 2cedis. Today, as we speak Naira is still around £255.00 to £1 whereas it is £1 to 3.1 cedis. Today N255 now buys 3.1 cedis when it only bought 2cedis in 2007. This is why like-for-like comparison is always best to make issues crystal clear. Is it not now obvious which currency is stronger and has greater purchasing power?

Also, it is a measure of Ghana's fiscal mismanagement, even if they are getting it right in many other areas, that their currency has depreciated and lost a whole 1.1 cedis again the sterling pound in 5 years. This would be the equivalent of the Naira depreciating by 91 Naira against the sterling pound to become £1 to N345.00. We all know we have not seen such depreciation in the past 5 years and it is obvious the Ghanaian cedis has lost value quite badly to become less strong in comparison to the Naira as an economic fact.

I have Ghanaian enterpreneur friends who are incredibly annoyed currently with the situation because import cost them significantly more since they now need more cedis to purchase the pounds and dollars to buy their goods abroad. This is impacting horribly on their profit.

Gbam! People forget that if Soludo had succeeded with his redenomination plans, we wont be calling the New ghana cedis strong. To even show how appalling the economic situation of Ghana at the time, they had to recaliberate to four decimal places per unit of their currency, that is awfully too high. In fact, it is the highest in Africa, I once read somewhere. They were nearing the zimbabwian situation where their currency lost so much value to the point people started using it as toiled paper. Then you go to toilets in their hotels and one sees inscriptions on the walls remind people not to use the paper bills for tissue papers..lol

In Lay man's term and explanation, the currency of a country is affected by demand and supply for that currency. How investors both foreign and local, importers and exporters and the Central Bank buys and sells the currency affects its value.
A country can choose to either fix or float its currency depending on its government fiscal policies.
China for instance fixes the rate of its currency by buying buying other major currency so that they continue to regulate it by themselves every time these other major currencies increase or decrease in value against their own currency.
How do they do this, if for instance, the US dollars appreciates against the yen and the chinese reserve bank wishes to keep the yen at par with the dollar, they increase the value of the yen by buying the yen in the open, there by stimulating demanding for the yen while decreasing supply. Doing this generally increases the demand for the yen especially by foreign investors who wants to do business in China with the chinese currency, the implication of this pressure is an increase in value, depending on the regulation by the chinese reserve bank of demand and supply of the currency and other currencies they buy.
One of the major reasons they hold the American dollars in trillions in their reserve. They do this to shore their own currency against he dollar and every other major currencies they have their reserves.

I am impressed by the level of knowledge shown my contributors to this thread. Those that have listed exchange rates and errouneously concluded thhat the fewer of your currency that is exchanged to the dollar - the stronger it is. More enlighten posters have shown that this is obvipusly not the case, otherwise Ghanaian Cedi will be stronger than not only the Naira but also the South African Rand, Japanese Yen and others.

If the numbers of 'zeroes' is not the issue then whay is the general public consensus that N5000 note will cause inflation?

Gbawe:


Currency is only a way to ascribe value to activities that ultimately derive goods and services. It is the activity within nations, and the relative efficacy or perhaps even total absence of those activities in comparison to others, that determines why standard of living, size and scale of economy, etc are different for Nations of the world.

For example, when the Japanese have devoted themselves to become manufacturing giants ,to the extent of being one of the largest supplier of vehicular transport and electronics to the entire world, they will naturally have a better economy and standard of living for their citizens, because of their "activities", than the African Nation that does not manufacture anything the world wants. Many African nations, tragically, don't even produce enough of what they need locally let alone think of exporting finished goods that would be significantly more lucrative than the raw and unrefined things we export.

It is the efficacy of actions and processes that matter. Quite an abstract concept but it is the reason poor Nations cannot just print money and proclaim themselves rich.

At least, we all agree that the Nigerian situation of high currency exchange rate is a largely product of bad leadership. Although, I think the low standard of living in Nigeria makes it a little complicated. The rejection of 5000 NGN and the 'coinification' of lower denominations in Nigeria is mostly tied around societal acceptance and social behaviour.

Tony Spike:

At least, we all agree that the Nigerian situation of high currency exchange rate is a largely product of bad leadership. Although, I think the low standard of living in Nigeria makes it a little complicated. The rejection of 5000 NGN and the 'coinification' of lower denominations in Nigeria is mostly tied around societal acceptance and social behaviour.

Show me any Nigerian over the age of 40 years, he or she has no problem using coins as they grew up using coins for all manner of small transactions.

Show me a Nigerian under the age of 35, he or she will tell you Nigerian 'do not like coins' because this generation has never used coins.

add to this the misconception that larger denominations lead to inflation then you will understand the anti N5000 sentiment.

Many people won't remmember using N20 notes to pay a N15,000, this was normal in 1995, N20 was equal to 15pence and N15,000 was like £100, in effect we were paying a £100 bill with 15 pence coins/notes (by the way that was 750 pieces)

mod pls put ds in frontpage abeg,its a very intrestin topic.

This topic has been discussed and thrashed...
https://www.nairaland.com/1048197/nigerian-naira-ghanaian-cedi-which#12205724

Best of wishes as you read!