jjman2322:


there's something we are missing somewhere i guess...

if Nigeria makes that kind of money, why can't they pump at least $200m into FX market every week, and keep $200m for reserves

youre absolutely right.. something doesnt make much sense..

If we had $200m into fx market every week for 6 months straight, dollar would drop quite a bit..

P/s this is just oil export.. we still export Gas, and some other products as well.. maybe not as much revenue as oil but still some funds..

now you are getting it my brother all we need is political will, Nigeria is so blessed for us to live in penury, believe me if what you said above is done the dollar can be sold for N200 over time

onatisi:

This is simple common sense but nigerains are just too stupid and foolish not to be able to think and see through all these politicians gimmicks. Now the dollar looting is gradually coming to a close,530 million dollars has been released within the last 7days , the politicians and apc members have nlw changed all their looted naira into dollars at cheap prices . Now the dollars rise can start and Nigerians start crying again. Every sensible intelligent human being on this knew osinbajo policy defy every economic sense and wouldn't last. Then why did he do it ?

then why did the same policy work for gej in the past?
Why is their inflation on local production in recession when purchasing power is low?

texazzpete:



The problem with this line of thinking is that you guys never seem to think it all the way through

Even if we assume that at worst, the official rate will fall to near N400, have you considered the attendant effect on the price of fuel in NIGERIA, a commodity that drives the price of a LOT of things.

Transport costs will go up. Food prices up. Cost of running businesses will go up. Power generation costs will increase. And that's just a few things.

In essence, none of you pontificating will stand up and defend this government when the shit hits the fan and the common man has to deal with N200 per liter fuel.

Maybe you missed this part of my writeup...

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

The point is that sooner or later, the CBN will have to let the Naira float without intervention. That's a fact. That's what the CBN and FG wants to do in the long term.

In the short- to medium-term that is not something they want to do, for the aforementioned reasons. They are waiting for the right moment.

Rumored Nigeria's Q1 2017 GDP negative growth was substantially lower than Q4 2016 negative growth. The economy is resilient even without any major fiscal policy change and is already on a road to recovery. I wouldn't say I see that happening until I see Q2 2017 GDP figures, but the indices are looking good for the economy.

2017 is also the year the government and NLC hope to ratify a new minimum wage rate (although I don't see that happening until 2018 for political reasons). An economy fresh out of recession, almost non-existent conflict in the ND, and a more than 200% increase in minimum wage will offset any major demerits of a fully managed float. Let's not forget that the fiscal policy would be unveiled soon (although, it is a glaring show of incompetence that it has been delayed for too long, the February deadline has been missed again).

I am not a fan of this government, they single-handedly effed up the whole economy. If Buhari hadn't done needless tough posturing, Nigeria would not have lost the estimated $50-$100bn they lost from depleted production of crude oil. Then if the man had assembled a better economic team and earlier, we should have had a fiscal policy formulated since 2015, not now in 2017 (and we aren't even sure they'll finish completing it this year). And let's not forget the down rating by S&P and others that was due to his lackadaisical attitude to economic issues.

By now, the economy should be in a good position to withstand the shock of a full float. I think even with these many setbacks, the Nigerian economy should be able to handle a full float in Q4 2017 or Q1 2018. Although, it'd be best the government enacts an integrated fiscal policy and a new minimum wage before a full float.

You seem to exaggerate the effects of a full float. The private sector is already operating under a pseudo free float. They use the parallel market for most of their needs. It's the government that needs to play catch up and balance the situation expertly.

-Lord

gypsey:
exactly why? If it is not gonna be sustainable why?

To score a cheap political point mate. And to maintain a false posture of being in total control, when that really isn't the case.

-Lord

naija1stpikin:


thats the magic which is not sustainable. How long are the going to inject dollar into the market for? So it's always going to be back to zero which is not what we need

For as long as possible. If they don't keep injecting dollars, then they'd have to do a full float which will be a disaster for Buhari's government.

Nigeria does not even have a fiscal policy. In a recession! More than 18 months after Buhari was inaugurated! And guess who is in charge of the economic team? Mr. Quick Fix Osinbajo.

Emefiele knows what he is doing. Because when the trouble will start because of a free float, they'll first come for his head. Fulanis will shield Buhari. Yorubas will shield Osinbajo and Adeosun.

The Nigerian economy is resilient. We'll get out of this later this year or early next year if they don't monumentally screw up the auto-pilot mode it's in now (one way to do so is to implement a fiscal policy that is out of touch with reality).

-Lord

What about CFA?

LordAdam16:
In recent days, I've heard lots of predictions about the USD/NGN exchange rate.

Some overzealous believers say it's going down to N200/$1. Some more conservative estimates put it at N350/$1. Others just say less than N400/$1.

The fact is that the rate will hover between N450 and N500 in the short term, pending any drastic action like what happened last week.

The CBN has made it ultimately clear that they would regularly intervene in the market to protect the Naira. Last week's reaction was one of such interventions and highly expected. The government wouldn't let the difference between reseres have been rising) at the moment.

The CBN has been plunging money into the market since the managed float started to the tune of several hundreds of millions of dollars weekly (last week it was over $400m, this week it's already over $100m). There is a limit to which they can go.

And that is why the 41 prohibited list still exists, and Nigerian bank cards (aside GTB and Access) cannot do USD transactions.

Last week, the CBN liberalized accessing Forex for students, travelers, and those in need of medical attention. It is a very welcome policy. These groups of FX buyers have been unfairly targeted by the CBN since Buhari stepped on the brakes. But according to even the
Even travelers at the Airports would
For the parallel market rate to fall permanently, the CBN has to liberalize the FX market completely. The prohibited import list has to be redacted and no one should be barred from buying dollars at the official rate (whether he/she is a student or a blogger buying web hosting on NameCheap with a Naira card).

While the naira will become more valuable at the parallel market (from 450+ to 400 or less), it will lose value at the official market (from <315 to between 350 and 400) in the medium term. But the basic idea is that the difference between the official and parallel market rates will be less than 50 naira. And probably go back to 2012 levels of less than 10 naira. Basically, the divergence will no longer be business-worthy for speculators.

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

Speculators are business men who make their living off plummeting currencies. They are like undertakers who make their living off dead people. If no body dies, the undertaker goes out of business. If an economy strengthens and the currency follows suit, speculators move on to another currency).

Saying speculators are unpatriotic and enemies of Nigeria is VERY SILLY. If the government didn't create the environment for them to thrive, they wouldn't thrive. Leave a bread for days and fungi would grow on it. You can't say the fungi are unpatriotic. Their only patriotism is to their survival.

I expect the parallel market rate to climb albeit slowly in the coming weeks to 470. N500/$1 seems like a stretch now and I expect the CBN to make another intervention if the rate crosses that resistance point again.

Until the Naira is fully floated, the speculators are going no where and the illusion of a N400 or less exchange rate in the parallel market will remain a pipe dream.

-Lord

why you know go predict for baba ijebu wether you go see something for life
Dey here dey jam talk

https://www.youtube.com/watch?v=L-vL9ROZZ08&feature=youtu.be

HAH:
as at today due to relative peace in the ND, we export 2.1million barrels in a day and oil sells for averagely $55 per barrel, that means $115M is made daily, now deduct JV of about 40%, tha means Nigeria earns about $70m daily therefore we make about $420m weekly from oil, if I were the government I will pump $200M into the economy and live $220 int the reserves

So my brother your worry should be political will, but not sustainability cos is very sustainable as long as oil is relatively high and there is peace in the land

How u dey bro

How's the bakery coming on

On the above matter ,what u don't get is 200m a week or 800m $ a month will not solve the problem ,our monthly demand as a nation cant be less than 1.2 to 1.5 billion $ ,throw in the speculators demand might be more

Imagine a total of about $700m was pumped into the markets and its still thirsty and rates are close to 470 again at the blackmarket in less than 8 days .
Its inevitable the currency will weaken both at the official and parallel

I feel the govt knows this already and are buying time hoping for a miracle because they know the devastating consequence of this increase on petrol and cost of living   or they will soon know

They are indeed btw the devil and the sea .I am praying for them because very difficult decisions must be taken .I feel it will be taken this second or third quarter

rmx1:


How u dey bro

How's the bakery coming on

On the above matter ,what u don't get is 200m a week or 800m $ a month will not solve the problem ,our monthly demand as a nation cant be less than 1.2 to 1.5 billion $ ,throw in the speculators demand might be more

Imagine a total of about $700m was pumped into the markets and its still thirsty and rates are close to 470 again at the blackmarket in less than 8 days .
Its inevitable the currency will weaken both at the official and parallel

I feel the govt knows this already and are buying time hoping for a miracle because they know the devastating consequence of this increase on petrol and cost of living   or they will soon know

They are indeed btw the devil and the sea .I am praying for them because very difficult decisions must be taken .I feel it will be taken this second or third quarter

Thank you very much my brother for this insight, I honestly never thought our weekly demand for fx is of to up $1B, however I also commend the weekly injection if sustained it can reduce th thirst, furthermore I learn 50% fx demand is for fuel importation and if dangote refinery comes on stream it may reduce that demand since we will have local sufficiency, also the rice and wheat farming too consume a large chunk with the nation also working toward local production if oil, rice and wheat are produced locally the only sector that need to be fed well with fx are industrialist like you LOL

Earth2Metahuman:
Yeah

Ayam not understanding nigeria's economy again


It has gone beyond logic

which mumu
Logic
We import everything
We produce nothing
What did you expect will happen

abhosts:
Emelife should be Removed. He enforces new policy for 1 week then abandons it.

can you enforce price of something?

REIIGN:
And our president is busy lying "hale and hearty" in a London hospital. Wasting tax payers money treating an illness which he brought upon himself.

how do you bring prostate cancer no yourself. You get sense so?