The fire brigade resolution by commercial banks to reject foreign currency deposits yielded result briefly early this week, with the Naira at some point appreciating to N210 to a Dollar. This was better than the N240 to a Dollar a week back. Speculative trading on the currency was temporarily slowed down by the action. This gain recorded by the nation’s currency was largely driven by excess Dollar supply in the market as people and businessmen could not save in their domiciliary accounts. However, this cosmetic and draconian measure crashed just a few days after.

By yesterday, the Naira had depreciated to N224 to a Dollar. Obviously, any economic action not built on a solid foundation and sound reasoning will always fail. How can deposit money banks suddenly stop their customers from putting money in their accounts? This is weird news coming out of our dear country. I consider this a breach of trust by the banks. It is akin to what we call bolekaja in Lagos. i.e. roforofo fight by desperate touts in motor parks.


The CBN Governor, Godwin Emefiele had earlier in the week said the “keep your Dollar at home” decision by the banks was not taken by the CBN, but that the apex bank was in support of the idea. I was convinced that the banks could not have unilaterally initiated such a draconian action. This is the voice of Jacob, but the hands are that of Esau. The banks were clearly bolstered by the CBN that has been fighting a losing battle with speculators and money launderers. My conviction was confirmed on August 5, when the CBN formally proscribed the acceptance of foreign cash deposits by commercials banks operating in the country.


A lot of lies have been flying around. Imagine the commercial lenders saying they stopped accepting Dollar deposits when their vaults were full and had no avenues of transferring the cash overseas? These banks are overwhelmed daily by international money transfer customers who are paid in Dollars. Sometimes, they will even tell such customers to come back due to shortage of the USD.

I hope we won’t get to the level where Nigerian banks will shut their doors for days as was the case in Greece a couple of weeks back; all in the name of trying to shore up the Naira. For me, this “keep your Dollars at home” measure aimed at strengthening the Naira is a fraudulent one. That was why Naira’s gain in the parallel market was short-lived. People will always find a way of circumventing steps like this one. The CBN should be more proactive in tackling the fundamental problem of the actual pricing of the Naira. Our currency can’t genuinely appreciate if industrial production remains low. It can’t appreciate if our source of revenue and forex remain largely crude oil. Our dear Naira can’t appreciate if we remain an import-dependent economy. Unfortunately, we still don’t have an economic team to work on these challenges. Our President is still on honeymoon, while Emefiele is left alone to carry the cross.


The actions and inactions of the Buhari regime have so far complicated the case of the Naira. For example, it was depressing knowing that President Muhammadu Buhari ordered the CBN to sell Dollars to Christians pilgrims at a concessionary rate of N160 to a Dollar. Muslim Pilgrims are also expected to get this concession. I still can’t understand why Buhari should subsidise pilgrimage, despite dwindling foreign exchange earnings and pressure on the Naira. By this action, the President has equally opened a window for corruption because people can buy at N160 to $1 and make a huge profit at the parallel market.


Again, so much cash is being pumped into the system to the detriment of the Naira. Over N1 trillion was shared in the May and June by all the tiers of government. There was also the N700 billion bailout fund shared last month. The CBN is getting set to release further N300 billion cash to profligate governors and N213 billion power fund. The economy is clearly awash with Naira. Also having a negative effect on the Naira is the problem of political uncertainty occasioned by the lack of cabinet.

source: http://www.thisdaylive.com/articles/cbn-s-bolekaja-tactics-to-shore-up-naira/216924/

Our currency can’t genuinely appreciate if industrial production remains low. It can’t appreciate if our source of revenue and forex remain largely crude oil. Our dear Naira can’t appreciate if we remain an import-dependent economy. Unfortunately, we still don’t have an economic team to work on these challenges.

True but I still got my fingers crossed

I just laugh when folks say the Naira is appreciating. What a parochial thinking!! Is it the appreciation of Naira that we should be concerned about or improvement in the standard of living in the country: No constant power, industries are shutting down, high rate of unemployment, mono economy based on a single source of foreign exchange and my country is not a manufacturing country. That this nation tweaked exchange rate to $1 to N1 is superficial, not to talk of the present one Emefiele is doing presently. The law of nature says anything attained via crooked means will definitely crumble soon. Naira gaining against the dollar does not improve the standard of living of the poor man on the street. Soon, the devastating effect of these shallow policies will come like a tsunami..... >:


puskin,
FOD,
naijacutee

I just heard u can't use more dan 300$ online, dat means most of us here dat shop on ebay can't spend more dan 300$ daily n we Nigerian can't buy phone dats wort 400$

I wonder dis kind of maths if its tru, wen orda countries re preaching about cashless transaction we ve stupid limits here, and @d end it only afect men on d street like us, cuse a well place crock wil stil smugle 30 million dollars tru benin border if he wants, dis country self I don't know which way.

chiboy11:
I just heard u can't use more dan 300$ online, dat means most of us here dat shop on ebay can't spend more dan 300$ daily n we Nigerian can't buy phone dats wort 400$

I wonder dis kind of maths if its tru, wen orda countries re preaching about cashless transaction we ve stupid limits here, and @d end it only afect men on d street like us, cuse a well place crock wil stil smugle 30 million dollars tru benin border if he wants, dis country self I don't know which way.

You are talking of shopping online, what of people who wants to pay school fees?

Hmmmm...

It is well!!!!!!!!!!!!

Ok

twosquare:
You are talking of shopping online, what of people who wants to pay school fees?

School fees taken care of. Form A in banks