HAH:


Why do we have the reserve? Is it just for fashion, a wise man will keep a percentage of his earning in his account and some to spend for his family day to day needs, this is what the FG is doing now, not everything earned is being used to match fx demand other are saved,

At $55 a barrel Nigeria earns and at production quota of 2M daily we make $110M daily from oil alone less about 40% for the JV, that will leave the nations with about $70M daily which can be split between savings and expenditure.

Nigeria earn it's money in dollars how does it spend it if not by pumping some through the banks in exchange for Naira in order to pay salaries and works.

To me the only people that are not ok with the current measure of pumping some percentage fx earning weekly are pessimist and fx speculators that want te green back to remain high in order to make supernormal profits

Firmjudge:


Greed, selfishnss and lack of patroitism from the elite is really a stumbling block..
Wanted to start exportation of benny seed, sheer butter and yams since we have these things in excess here and a tuber could cost as high as 14 to 20 dollars in the international market..
But,
I was given a criteria that even my capital wnt cover..
Talk about suffocation
I am with you on this..

plaetton:


The government should be trying to curb fx demand, not matching it.
You can't eat your cake and still have it.

Curbing fx demand and the demand for foreign manufactured goods, and at the same time boosting exports should be the economic policy imperatives, not ad-hoc measures to match fx demand, that has ZERO long term economic value.

I support that users of forex should source their forex at market- determined prices whenever and wherever, not through wasteful government interventions, another word for dollar subsidy.

lestat:


Its truly disheartening..now alot of foreigners think the people should rise up in one voice and scream for change but alas i say again is this possible here? where the political elite use tribalism, and religious hate to separate the masses? and the hunger fueled masses keep falling for this gimmick?

for example look at this imp Mouthgag since morning posting tribalisctic hate posts, yet the political elite whose course it thinks its championing unite and loot the country irrespective of their different tribes? yoruba , igbo and hausa politicians are friends and loot together while a frustrated hungry buffalo like Mouthgag stays hungry avoiding the landlord due to no money to pay rent, is here spreading hate.

Gosh

lestat:


Its truly disheartening..now alot of foreigners think the people should rise up in one voice and scream for change but alas i say again is this possible here? where the political elite use tribalism, and religious hate to separate the masses? and the hunger fueled masses keep falling for this gimmick?

for example look at this imp Mouthgag since morning posting tribalisctic hate posts, yet the political elite whose course it thinks its championing unite and loot the country irrespective of their different tribes? yoruba , igbo and hausa politicians are friends and loot together while a frustrated hungry buffalo like Mouthgag stays hungry avoiding the landlord due to no money to pay rent, is here spreading hate.

Gosh

plaetton:


But why do you reasonably think that CBN should roll out $350 per week to defend the Naira( more like SUBSIDIZING dollar purchases for a 'SELECT' group of Nigerians ) ?

For who's benefits, and at what economic costs ?
If our non-oil exports are ramping up as a result of the weak Naira, why do we want CBN to spoil that show ?

If the broad economic policy is to curb imports and boost exports, then a weaker currency is imperative, a sin qua non.
That's economics 101.

Ad-hocism , and the woeful inability to think long term is what kills this country.

Truth234:
Amoto94 can you space it?



This is a general misconception, the CBN do not withdraw from the Foreign Reserves and in fact has added about $500 million in the last two weeks -- $75 million this week alone.

For the record, the money the CBN is auctioning is in accordance with 2017 budget provision -- official exchange rate of N305 with the oil benchmark pegged at $44 a barrel. Therefore, it is part of N2.2 trillion stipulated in the 2017 budget to come from oil revenue.

The subsidised rate is still above N305/$ official rate, commercial banks are directed not to sell more than 20% above the official rate, which is about N375/$. This fund is needed to fund capital projects in Naira and not dollars. Hence, the exchange.

So whether we can sustain it or not, 2017 budget must be funded, either through loan or revenue generation. Let just pray militants continued to yield to the agreement.

sholatech:


I really don't see the relationship you trying to enlighten us between the budget & defence of Naira with balance on the reserves. I indicated the defence of the Naira will slow down the growth of our reserves. I still maintain that our Naira is been defended by our foreign reserves & Cbn intervention is from this.

Mouthgag:

Let cum gag your mouth
Sick dumbo

iPopAlomo:
This is the question everyone should be asking...

Can the CBN continue to pump $350 million dollars week in, week out...?!!!

If they can... then dollar shouldn't have a problem going back to #199...

But the cabals nko...?!!! won't they hijack it and stack dollars in safes and septic tanks somewhere in their grandpa's house...?!!!

Firmjudge:


Very appaling state indeed.
Those keyboard warriors are really sick.
Mouthgag will soon realise hatered is a part of him which he development overtime. but it will be too late..
You will never see monickers like mouthgag contributing to content like this..

I think seun should get sub-moderator to recommend people for ban.

This forum is slowly encouraging anf brewing bigotism.

lestat:


chei, see hunger, suffering, frustration, poverty, unemployment, anger, hatred.

men your village witches carry your matter for head o.

did you do something abominable?

na wa o. oya post your account number here let me send you N200 for agege bread and ewa

[img]http://www.reactiongifs.com/r/mtbu.gif[/ig]

HAH:
the government is not matching dollar demand but just supplying it because it earns in dollars, if it matches all dollar demand then dollar can be one naira, the government is not in any way subsidizing dollars but giving it at a true rate not rate set by economic saboteurs and speculators cos as it is even if government give dollars at 500 naira they will start selling theirs for 700 because of the demand and supply mismatch.

The government has no choice but to sell dollars to banks since the government needs naira equivalent to spend for local expenses, so selling a portion of what it earns weekly to banks inorder meet its local obligation is a very welcome idea.

My only problem is the supply-demand mismatch cos as it is only the government supply fx into the market, our other exports apart from oil is not good enough to even satisfy 10% of demand, but what the government is doing is good, commendable and can be sustain as long as we sell oil in dollars

papiforreal:

Don't be naive, the real value of the naira (something called the Real Exchange Rate) is between 300-350 ₦ per $ and that's exactly why the CBN is holding out at that rate. The present rate is only down to the insidious activities of speculators and once the CBN demonstrates an ability to meet $ demand for a few weeks (which they now can as they've miraculously built up the reserves to about $29b), speculators will pack their bags and leave the Naira alone, then, we'll see the naira settle at its true rate.

papiforreal:

Don't be naive, the real value of the naira (something called the Real Exchange Rate) is between 300-350 ₦ per $ and that's exactly why the CBN is holding out at that rate. The present rate is only down to the insidious activities of speculators and once the CBN demonstrates an ability to meet $ demand for a few weeks (which they now can as they've miraculously built up the reserves to about $29b), speculators will pack their bags and leave the Naira alone, then, we'll see the naira settle at its true rate.
Everything now depends on how patient currency hoarders are and how long the CBN can nourish the market, the first to blink losses. If speculators blink first, then the Naira will appreciate further as hoarders offload their stock leading to an oversupply but if the CBN blinks first, something that's sure to happen if the reserves begin to plunge below $25-20billion, then expect the naira to depreciate to at least ₦600 as speculators become enboldened seeing nothing but a hapless Central Bank.
The funniest part of all these is seeing Nigerians curse and cry because the Naira is making gains and they're about to suffer marginal losses! Which way my people? Some are already praying the intervention fails and have already resorted to hoarding, anticipating the CBN's failure. I ask again, which way my people? I thought a stronger Naira is desirable? Have you guys thought of the knock-on effects of a sudden fall in the exchange rate to the wider economy? It might take some time but trust me, a healthier overall economy is way more beneficial than the extra ₦50 you'll make per $.

Mouthgag:

Lol! Demented osu-alusi illegitimate Jobless troll

Keep living in denial and misery.

sholatech:
I think CBN should have waited till Reserves are up to 36/38 Billion USD before they struck.

Unmet demand is at least 2bn USD. Within one week, Cbn brought out 530 million USD from Reserves to defend the currency. More or less subsidising foreign Travels & foreign education. And some 'Forwards'. And you see, the banks were not even liquid enough to take all that the Cbn offered.

Last week, most people did panicked sales. Now, demand is picking up. Where you have 2bn USD demand & 530m USD supply, what happens?

plaetton:


I am sorry for your naivety in thinking that it is the government's job to sustain the value of the Naira with commensurate dollar supply. Nothing could be more foolish, and guaranteed always fail.

The government's job is providing and maintaining policy initiatives that stimulates local productivity and that boosts confidence im the economy and the Naira. A nation's currency is a default measure of per capita productivity, not how much dollars it can sell to banks per week.

Haven't you heard of the forces of demand and supply ?
If it was as simple as you paint it for the government to sustain the value of the Naira through forex sales, then from what they have sold over the years, the dollar and naira should be at parity.

I don't understand why some of you who should know better choose to continually cast blames on invisible speculators ?
Who are these invisible speculators that you conveniently scapegoat for ad-hoc policy failures of the government ?

First of all, there are speculators in every currency.
That's why it is call the Forex MARKET. Duuuhhhh !!
It is a $6tr daily market that every country and every financial institution participates in.

Now, in the case of Nigeria, the government's haphazard, flip flop, schizophrenic policies create huge GAPS that inevitably attract and invite currency arbitrage, from the street malams, the businessman, the government officials and Banks, all seeking profit and self-preservation. That is the rule of the marketplace.

papiforreal:

Don't be naive, the real value of the naira (something called the Real Exchange Rate) is between 300-350 ₦ per $ and that's exactly why the CBN is holding out at that rate. The present rate is only down to the insidious activities of speculators and once the CBN demonstrates an ability to meet $ demand for a few weeks (which they now can as they've miraculously built up the reserves to about $29b), speculators will pack their bags and leave the Naira alone, then, we'll see the naira settle at its true rate.
Everything now depends on how patient currency hoarders are and how long the CBN can nourish the market, the first to blink losses. If speculators blink first, then the Naira will appreciate further as hoarders offload their stock leading to an oversupply but if the CBN blinks first, something that's sure to happen if the reserves begin to plunge below $25-20billion, then expect the naira to depreciate to at least ₦600 as speculators become enboldened seeing nothing but a hapless Central Bank.
The funniest part of all these is seeing Nigerians curse and cry because the Naira is making gains and they're about to suffer marginal losses! Which way my people? Some are already praying the intervention fails and have already resorted to hoarding, anticipating the CBN's failure. I ask again, which way my people? I thought a stronger Naira is desirable? Have you guys thought of the knock-on effects of a sudden fall in the exchange rate to the wider economy? It might take some time but trust me, a healthier overall economy is way more beneficial than the extra ₦50 you'll make per $.

HAH:
I thought I was having a matured discourse with responsible person, the words you used has made me place you low, not anyone you see here is a nonentity or a teenager, you should stay in your lane and I stay In mine we belong to different worlds

Amoto94:
Forex: CAN CBN SUSTAIN THE BLACK MARKET ONSLAUGHT? ~ By Omoniyi Akinsiju
With the dramatic appreciation of the Naira against the dollar and other major international currencies starting Monday, February 20, there had been shifty discomforts as expressed by many Nigerians despite the unrestrained excitement that greeted the impact of the Central Bank of Nigeria (CBN) recently introduced foreign exchange policy reforms.

Four days after the take-off of the policy, the Naira, at the black market, appreciated exponentially by more than 4% from N525 to a dollar to N480 to a dollar. As at Tuesday, a dollar was exchanging for N445, with even greater prospect of appreciating further against the greenback.

Of course, the market response is a testimony to the multiple layers of measures rolled out by the CBN to salvage a hitherto savaged foreign exchange market where the local currency had been on a free fall, especially at the black market.

Expectedly, the naira had been severely pummelled in the forex segment of the economy in direct consequence of an acute shortage of organically sourced dollars and a slowed down flow of the greenback from foreign investors.

However, the CBN, had through an insistence on managing the float of the Naira against other currencies sustained the naira/dollar rate at N305 to a dollar at the interbank forex market. This had drawn different hues of flaks from some commentators who insisted on a free float of the Naira even as some other commentators rallied to the support of the CBN, defending the apex bank managed float of the country's forex regime on basis of the lean foreign exchange earnings as a result of the combination of vastly reduced crude oil production and internationally compelled low price of crude oil.

Things started taking a perceptible turn for the good in November 2016 when militant activities in the oil producing Niger Delta area started petering out while the collaborative position of the OPEC and non OPEC member countries led by Russia, fired crude oil price over the $50 per barrel mark.

This was the needed elixir the Nigerian economy desperately needed, especially at a time inflation rate was looking runaway and productive activities were grounding to excruciatingly painful halt. Thankfully, the crude oil price spike and increased price provided the juice to the country's dwindling foreign reserve which had been decimated to as low as $23billion. The reverse of fortune soon commenced the consistent accretion to the foreign reserve. Within a twelve week period, starting November, 2016 to February, 2017, the foreign reserve added more than $8billion and hugged the $30billion psychological mark.

Apparently, this provided the impetus to the CBN to stream the 'meet all demand' measure. So now, the Personal and Business Travel Allowance that had hitherto had peripheral access to the foreign reserve, and payment of school fees plus medical treatment abroad were all brought in to banking circle thus vastly reducing the pressure points that led to the flourishing of the black market.

This is even as the CBN pumped more dollars into the interbank forex market at $6million daily intervention in the spot segment of the market. This compares with the miserly $1.5million daily intervention it used to undertake. This, combined with the clearing out of more than four billion dollar backlog of demand through its shorter 60 days maturing future market segment, were enough reasons for the Naira to start a sharp climb up against the dollar.

But now, a new concern seems to have emerged; can this new Naira virility be sustained? The first response to this is predicated on keeping the peace in the Niger Delta. It would seem the Federal Government has been able to persuade the Niger Delta of its seriousness to dialogue and impact a developmental agenda in the area.

In the matter of sustaining this marginal oil price increase, there's a growing international confidence that price of oil per barrel may hit the $60 mark. This is because critical stakeholders in the collaboration to cut down on oil between OPEC and non OPEC countries have started demanding for a push back of the six month due date for the expiration of the collaboration.

Iraq has been particularly loud in the call to extend the time period for scaling down national supplies for another six months with eyes set on $60 per barrel. Iraq is being joined by oil producing giant, Total, in this call. The prospect of this call being endorsed is said to be potent and so guarantees sustained high price.

As it were, it would seem this new forex regime is sustainable. CBN decision to heavily fund the supply side of the forex market is truly a welcome policy, however, substantial credit should be ascribed to the emerging culture of transparency and integrity that is defining government responsibility and service delivery.

Akinsiju, Public Policy Analyst, writes from Abuja.

plaetton:

No doubts, you have misunderstood my post.
My vituperations were against the government's monetary policies, not your support of it.
I apologize if you feel offended.

sholatech:


I really don't see the relationship you trying to enlighten us between the budget & defence of Naira with balance on the reserves. I indicated the defence of the Naira will slow down the growth of our reserves. I still maintain that our Naira is been defended by our foreign reserves & Cbn intervention is from this.

papiforreal:

Don't be naive, the real value of the naira (something called the Real Exchange Rate) is between 300-350 ₦ per $ and that's exactly why the CBN is holding out at that rate. The present rate is only down to the insidious activities of speculators and once the CBN demonstrates an ability to meet $ demand for a few weeks (which they now can as they've miraculously built up the reserves to about $29b), speculators will pack their bags and leave the Naira alone, then, we'll see the naira settle at its true rate.
Everything now depends on how patient currency hoarders are and how long the CBN can nourish the market, the first to blink losses. If speculators blink first, then the Naira will appreciate further as hoarders offload their stock leading to an oversupply but if the CBN blinks first, something that's sure to happen if the reserves begin to plunge below $25-20billion, then expect the naira to depreciate to at least ₦600 as speculators become enboldened seeing nothing but a hapless Central Bank.
The funniest part of all these is seeing Nigerians curse and cry because the Naira is making gains and they're about to suffer marginal losses! Which way my people? Some are already praying the intervention fails and have already resorted to hoarding, anticipating the CBN's failure. I ask again, which way my people? I thought a stronger Naira is desirable? Have you guys thought of the knock-on effects of a sudden fall in the exchange rate to the wider economy? It might take some time but trust me, a healthier overall economy is way more beneficial than the extra ₦50 you'll make per $.

lifestyle1:
If they can sustain this for the next 10 months, speculators/hoarders will go back to village.

lifestyle1:
If they can sustain this for the next 10 months, speculators/hoarders will go back to village.