Freedem:



You can only burn excess cash when it's not tied to an asset.


Think of it this way


My total cash available is 100 naira

I want to drain 50 naira from the market so I sell 50 naira worth of tb.. with a maturity date..


So now there's only 50 naira left in my market , money supply has been reduced..

Now as soon as d the tb matures , I repay the 50 naira and resell another tb for 50 naira the next year .. can be adjusted to for in with monetary plans.


If you look at this simple analysis, you'll find that no new money as been created, it's just a cycle of liquidity and less liquidity..

You are assuming government only gives money to Tbills People. You have forgotten they pay salaries, they have other bills to pay. So you see? You will be needing definitely more than that 50 naira and 100 naira in total. Government is harder to function well without cash flow, that is why Americans moved off the gold standard, and why we are in so much financial crisis. Our naira is backed by nothing. No asset, our naira is backed only by government faith. The moment Nigerians lose faith in that naira, our naira is useless. Not saying this can/will happen. How many of you can spend kobo? You can't because no one trusts that the next person will collect that kobo from him. Even though CBN then was trying to force people to use it, they later gave up. No one is using it now. That's what your money is, backed by faith, your naira is not an asset, I repeat it's a debt instrument backed by nothing else but government faith. That is why if Nigeria gets hit by a terrible war, you won't be able to spend your naira. No one will collect it. Same with the US dollars, if aliens invaded us today, or earthquakes all over, or nuclear war and society as we know it was destroyed and the world was in uproar, do you think people would be exchanging dollars? Or spending it? What will they use it for? The valuable things will be water, food, clothes/shelter. People would want to survive. Government and money go hand in hand with trust and a system. People always forget this basic concept.

ahiboilandgas:
u are missing the points ,it there on the cbn website why tb are issued

Sir, I am not arguing the analysis about why Tbills are issued, I am talking about the actual effect on the naira. Why do we have presidents? To control a country and do things to favor the people, but is that what always happens? Or why was Buhari voted in? Was it not to make our lives better? Many people would point out he has done the opposite of what he was voted for.

CBN or any government can talk about what Tbills does adding value to the naira on their website, but what about the reality? Is our naira improving? No it's not! It's not working. That is their aim, but reality is showing us a different result. Inflation cannot work, it's just postponing the inevitable.

GonFreecss1:


You are assuming government only gives money to Tbills People. You have forgotten they pay salaries, they have other bills to pay. So you see? You will be needing definitely more than that 50 naira and 100 naira in total. Government is harder to function well without cash flow, that is why Americans moved off the gold standard, and why we are in so much financial crisis. Our naira is backed by nothing. No asset, our naira is backed only by government faith. The moment Nigerians lose faith in that naira, our naira is useless. Not saying this can/will happen. How many of you can spend kobo? You can't because no one trusts that the next person will collect that kobo from him. Even though CBN then was trying to force people to use it, they later gave up. No one is using it now. That's what your money is, backed by faith, your naira is not an asset, I repeat it's a debt instrument backed by nothing else but government faith. That is why if Nigeria gets hit by a terrible war, you won't be able to spend your naira. No one will collect it. Same with the US dollars, if aliens invaded us today, or earthquakes all over, or nuclear war and society as we know it was destroyed and the world was in uproar, do you think people would be exchanging dollars? Or spending it? What will they use it for? The valuable things will be water, food, clothes/shelter. People would want to survive. Government and money go hand in hand with trust and a system. People always forget this basic concept.

Point proven the main goal of tb is to contract the economy.. reduce money supply and inflation..

Tb doesn't create new money.

Burning cash is silly when it's tied to an asset because you will have to re print the cash to pay back.


You also keep saying the dollar is now 370 lol, please try and send dollars from d us and see how much you'll actually get in naira..



Finally every currency is backed by faith , not just d US , take a risk that suits your requirements and there is no need to be alarmist.

few opinions:

First, I don't see the naira suffering any major loss in the near term. Earlier last year there were projections, and even "prophecies " that the dollar would reach 1000. Most analayst earlier this year forecast 410 as what the official rate would be around November. It was yet relatively stable.

Reserves will certainly find support at the $40bn mark. It's actually back up above $42bn. Oil prices will likely climb back above $60 for each Brent barrel.

one thing with my forecasts though is that I can influence things spiritually to make them true.

If you ask me, except you're buying euro bonds at 8% or more, NTB at 16% yield currently makes for a better deal-at least for the next few years.


On how NTB helps the naira, IT CERTAINLY DOES. REALLY WELL ACTUALLY.

You see, for most folks, dollar is sourced directly or indirectly through the CBN.
Now when you want to buy, you must have the naira to bid at the auction.

At any point in time, even though banking system assets are above N36tn, the liquid portion that can be used for banks for any purchase or payment is often just about 1%. N360bn. There are times the entire banking system doesn't even have up to N100bn.

So at such at time, if the CBN offers say $500m for sale at an FX auction, it may not get to sell more than $200m. basically cos it had succeeded in draining liquidity via OMO.

If proceeds of NTB and FGN bond auctions hit the system hit the banking system today via FAAC disbursement, you may see system liquidity rising to say 700bn, but it won't be more than just a few days before the CBN sucks the excess up via OMO, so that by the time they're having an FX auction, there'd be just enough funds to make a limited bid for FX.

So, while proceeds of NTB, and FGN bonds get back into the system via government spending, the CBN sucks up whatever they consider excess from time to time via OMO, this time, OMO cash stays with the CBN, and doesn't get back into the system until whenever they want. So it's just than banks' claims on the CBN that rise, liquidity may be pretty low.

Now why does the rate have to be high.

Well basically, the fact that the CBN wants to suck up via OMO does not mean banks are under any obligation to buy those bills. It's a choice a bank's management would have to make between keeping dollar assets to reap potential revaluation gains and buying naira debt assets to earn juicy interest. so the rates have to be juicy.

In 2016, while GUARANTY had close to N100bn in revaluation gains, ACCESS actually had a revaluation loss, implying that the way banks choose to manage and denominate their balance sheets is entirely up to them.

I'm quite happy with the MPC guys and I'd give them kudos for their job with the naira.

Freedem:





Point proven the main goal of tb is to contract the economy.. reduce money supply and inflation..

Tb doesn't create new money.

Burning cash is silly when it's tied to an asset because you will have to re print the cash to pay back.


You also keep saying the dollar is now 370 lol, please try and send dollars from d us and see how much you'll actually get in naira..



Finally every currency is backed by faith , not just d US , take a risk that suits your requirements and there is no need to be alarmist.

First off I never said only the US or naira is backed by faith. So I wonder who that point was/is for.

And your point about Tbills helping the naira is mute, because motive is never equal to results.

Secondly, Tb doesn't create new money, I never said that it does, but the government does create new money... CC inflation.

You said burning cash tied to an asset? You mean Tbills? When did I say money from Tbills had to be burnt? I never said that. Re-read what I said.

Oh! I should send dollar and allow banks decide the rate? That point is mute. Know why? If banks were to convert my Fx to naira, I would be getting a bad deal as it will be lower. But guess what? With your point if I wanted to buy something with my dollars online with naira I should get a good deal, but alas I won't as your point is not a regulatory point, just a bank taking advantage point.

Finally, I was not being alarmist. I never did scream the naira is doomed now did I?


But you know what? We shall all be here to see. If you look at past pages, they have had this argument before and I am sure people in the future will have this argument again, even though the past has already told them the truth. Like they say time will tell the truth.

GonFreecss1:


Sir, I am not arguing the analysis about why Tbills are issued, I am talking about the actual effect on the naira. Why do we have presidents? To control a country and do things to favor the people, but is that what always happens? Or why was Buhari voted in? Was it not to make our lives better? Many people would point out he has done the opposite of what he was voted for.

CBN or any government can talk about what Tbills does adding value to the naira on their website, but what about the reality? Is our naira improving? No it's not! It's not working. That is their aim, but reality is showing us a different result. Inflation cannot work, it's just postponing the inevitable.

but through the action of the cbn control tool inflation down from 18 percent ,dollar down from 520 to 360 (a flotation can devalue it to 400 )but no country just allow a truely free markets even the king of capitalism American had to bail out private firms like gm motor and Aig with public funds

awesomeJ:
few opinions:

First, I don't see the naira suffering any major loss in the near term. Earlier last year there were projections, and even "prophecies " that the dollar would reach 1000. Most analayst earlier this year forecast 410 as what the official rate would be around November. It was yet relatively stable.

Reserves will certainly find support at the $40bn mark. It's actually back up above $42bn. Oil prices will likely climb back above $60 for each Brent barrel.

one thing with my forecasts though is that I can influence things spiritually to make them true.

If you ask me, except you're buying euro bonds at 8% or more, NTB at 16% yield currently makes for a better deal-at least for the next few years.


On how NTB helps the naira, IT CERTAINLY DOES. REALLY WELL ACTUALLY.

You see, for most folks, dollar is sourced directly or indirectly through the CBN.
Now when you want to buy, you must have the naira to bid at the auction.

At any point in time, even though banking system assets are above N36tn, the liquid portion that can be used for banks for any purchase or payment is often just about 1%. N360bn. There are times the entire banking system doesn't even have up to N100bn.

So at such at time, if the CBN offers say $500m for sale at an FX auction, it may not get to sell more than $200m. basically cos it had succeeded in draining liquidity via OMO.

If proceeds of NTB and FGN bond auctions hit the system hit the banking system today via FAAC disbursement, you may see system liquidity rising to say 700bn, but it won't be more than just a few days before the CBN sucks the excess up via OMO, so that by the time they're having an FX auction, there'd be just enough funds to make a limited bid for FX.

So, while proceeds of NTB, and FGN bonds get back into the system via government spending, the CBN sucks up whatever they consider excess from time to time via OMO, this time, OMO cash stays with the CBN, and doesn't get back into the system until whenever they want. So it's just than banks' claims on the CBN that rise, liquidity may be pretty low.

Now why does the rate have to be high.

Well basically, the fact that the CBN wants to suck up via OMO does not mean banks are under any obligation to buy those bills. It's a choice a bank's management would have to make between keeping dollar assets to reap potential revaluation gains and buying naira debt assets to earn juicy interest. so the rates have to be juicy.

In 2016, while GUARANTY had close to N100bn in revaluation gains, ACCESS actually had a revaluation loss, implying that the way banks choose to manage and denominate their balance sheets is entirely up to them.

I'm quite happy with the MPC guys and I'd give them kudos for their job with the naira.

This is a first, influencing economies spiritually? Wow! We need your help with the naira. Damn! Please forecast it to be 1 naira to a dollar. We will all appreciate this.

We will be here to see the dollar to the naira rate.

Secondly, the only thing that can help the naira relative to forex is the availability of this currencies. (i.e. higher supply). This can only happen with more exports, more businesses that sell goods and services not only in Nigeria but abroad. Hence more forex influx. CBN using forex earned from crude oil is not sustainable. You all do know that is what is saving your naira right? CBN literally buying it up with USD. I don't understand how people are optimistic about the future of a country that operates this way, when everyone is running away from crude oil and others are trying to make it cheaper. So even though I appreciate your theoretical analysis including the OMO auction. It's just theory, reality is showing us different, it has never helped us against the USD, as history will show, will that change in the future? Time will tell, not spiritualistic logic.

The past does not always determine how the future will be, but insanity is doing the same thing over and over again and expecting different results. That has always been the case with Nigeria, still is.

ahiboilandgas:
but through the action of the cbn control tool inflation down from 18 percent ,dollar down from 520 to 360 (a flotation can devalue it to 400 )but no country just allow a truely free markets even the king of capitalism American had to bail out private firms like gm motor and Aig with public funds

I agree, no country can, but in Nigeria that is our major tool. That is a problem. I can bet you the real reason the naira went from 520 to 360 to a dollars was not only because of what CBN did, but partly due to what is called a correction. All assets including stocks suffer from this no matter what, people will take profits. You can't expect something to fly that high so fast and there won't be a drop.

This argument is very interesting as we are all coming up with theories and opinions, but time will show us the truth and it will surprise most people, me included.

GonFreecss1:


This is a first, influencing economies spiritually? Wow! We need your help with the naira. Damn! Please forecast it to be 1 naira to a dollar. We will all appreciate this.

We will be here to see the dollar to the naira rate.

Secondly, the only thing that can help the naira relative to forex is the availability of this currencies. (i.e. higher supply). This can only happen with more exports, more businesses that sell goods and services not only in Nigeria but abroad. Hence more forex influx. CBN using forex earned from crude oil is not sustainable. You all do know that is what is saving your naira right? CBN literally buying it up with USD. I don't understand how people are optimistic about the future of a country that operates this way, when everyone is running away from crude oil and others are trying to make it cheaper. So even though I appreciate your theoretical analysis including the OMO auction. It's just theory, reality is showing us different, it has never helped us against the USD, as history will show, will that change in the future? Time will tell, not spiritualistic logic.

The past does not always determine how the future will be, but insanity is doing the same thing over and over again and expecting different results. That has always been the case with Nigeria, still is.

Have had of the FMDQ OTC FX FUTURES?

that's CBNs strategy to help speculators who expect the dollar to rise, get their hands burnt. It is a way of reducing present demand in order to cub hike.

Investors are already buying into the future and as of November 30, FMDQ published November 2019 rate of about 366 Naira to a dollar.

August 2017 dollar was 360.
November 2018, dollar could not gain up to 2%

Why will someone think of hedge.

CBN has seen the worse in 2016/17. They are better prepared this time around and speculators will get their fingers burnt just like the 520 to 360 crash. This were Emefiele's words yesterday.

vacanci:


Have had of the FMDQ OTC FX FUTURES?

that's CBNs strategy to help speculators who expect the dollar to rise, get their hands burnt. It is a way of reducing present demand in order to cub hike.

Investors are already buying into the future and as of November 30, FMDQ published November 2019 rate of about 366 Naira to a dollar.

August 2017 dollar was 360.
November 2018, dollar could not gain up to 2%

Why will someone think of hedge.

CBN has seen the worse in 2016/17. They are better prepared this time around and speculators will get their fingers burnt just like the 520 to 360 crash. This were Emefiele's words yesterday.

So because the CBN governor said so, it must be true? He can surely see the future. Maybe I will meet him and ask him to predict if I will live for a 1,000 years? Of course he will always say optimistic things!

But then again, he was the same person who complained that Banks are only buying Treasury bills and not lending people money. He complained that banks should be a form of balance to the economy. So why is he not happy Banks are buying Tbills? He should be thrilled. He should be ecstatic, banks are helping to mop up excess Naira supply too by buying Tbills. Less naira in supply, why is he frustrated about it?


Hahahahahahahahahahahahahahahahahaha


Common guys! When Dr Barry went to Goldman sachs to bet against the real estate market, they laughed at him. He was even worried they wouldn't be able to pay him, they laughed still... we all know what happened at the end and who laughed last. Can the naira improve? Of course! But because the CBN governor said so? Hmmn... we have short term memory in this country.

Kai awesome j good analysis am officially appointing you at our forecast analyst on this tread ....my people if you agree click like if not click share .....the thread becoming more intellectual.....

GonFreecss1:


So because the CBN governor said so, it must be true?

Hahahahahahahahahahahahahahahahahaha


Common guys! When Dr Barry went to Goldman sachs to bet against the real estate market, they laughed at him. He was even worried they wouldn't be able to pay him, they laughed still... we all know what happened at the end and who laughed last. Can the naira improve? Of course! But because the CBN governor said so? Hmmn... we have short term memory in this country.

the cbn governor have all the data and research team at his disposal...he can see all the bank balance in nigeria and where the money is he has more data and info more than any body in nigeria including the president (on money matter)...you don't joke with the chairman of federal reserve bank..cos his statement and body language can make or mar an economy

ahiboilandgas:
the cbn governor have all the data and research team at his disposal...he can see all the bank balance in nigeria and where the money is he has more data and info more than any body in nigeria including the president (on money matter)...you don't joke with the chairman of federal reserve bank..cos his statement and body language can make or mar an economy

But sir, why is he not happy about banks buying up Tbills anyhow? Hmmn...

Also I wouldn't trust CBN with anything, go and ask shareholders of all current defunct banks including Skye bank if they appreciate CBN especially the man we are all hyping this evening.

Did you know Skye bank was cooking books to appear liquid, hmmn... but the CBN governor is the all knowing... wonder why they never acted fast with such illegal activities going on.

Oh! What about all the loans banks were busy giving themselves and friends? NPL's anyone? Hahahahahahahahahahahahha.

I can't believe it, Nigerians are being optimistic about our government this evening. Interesting.

GonFreecss1:


So because the CBN governor said so, it must be true? He can surely see the future. Maybe I will meet him and ask him to predict if I will live for a 1,000 years? Of course he will always say optimistic things!

But then again, he was the same person who complained that Banks are only buying Treasury bills and not lending people money. He complained that banks should be a form of balance to the economy. So why is he not happy Banks are buying Tbills? He should be thrilled. He should be ecstatic, banks are helping to mop up excess Naira supply too by buying Tbills. Less naira in supply, why is he frustrated about it?


Hahahahahahahahahahahahahahahahahaha


Common guys! When Dr Barry went to Goldman sachs to bet against the real estate market, they laughed at him. He was even worried they wouldn't be able to pay him, they laughed still... we all know what happened at the end and who laughed last. Can the naira improve? Of course! But because the CBN governor said so? Hmmn... we have short term memory in this country.

Have you asked yourself one of the major policies that kept the dollar at around 360 for one whole year. It's the FMDQ OTC FX FUTURES.

Go and check how much investors are already hedging for net one year. It's not above 366. They cannot all be fools.

I ask you a question, would it have been a wise decision to buy Treasury bills in naira at 18% last year or invested in dollars to cash out after a year.

It is very clear that my Treasury bills of 18% last year was a better decision.

GonFreecss1:


But sir, why is he not happy about banks buying up Tbills anyhow? Hmmn...

Also I wouldn't trust CBN with anything, go and ask shareholders of all current defunct banks including Skye bank if they appreciate CBN especially the man we are all hyping this evening.

Did you know Skye bank was cooking books to appear liquid, hmmn... but the CBN governor is the all knowing... wonder why they never acted fast with such illegal activities going on.

Oh! What about all the loans banks were busy giving themselves and friends? NPL's anyone? Hahahahahahahahahahahahha.

I can't believe it, Nigerians are being optimistic about our government this evening. Interesting.

sky bank gave out huge loan to their chairman firm to buy intel and one oil well it a failed bussiness decision

GonFreecss1:


But sir, why is he not happy about banks buying up Tbills anyhow? Hmmn...

Also I wouldn't trust CBN with anything, go and ask shareholders of all current defunct banks including Skye bank if they appreciate CBN especially the man we are all hyping this evening.

Did you know Skye bank was cooking books to appear liquid, hmmn... but the CBN governor is the all knowing... wonder why they never acted fast with such illegal activities going on.

Oh! What about all the loans banks were busy giving themselves and friends? NPL's anyone? Hahahahahahahahahahahahha.

I can't believe it, Nigerians are being optimistic about our government this evening. Interesting.

what should we do otherwise since we are Nigerians not Americans we should believe Trump?don't get u points

vacanci:


Have you asked yourself one of the major policies that kept the dollar at around 360 for one whole year. It's the FMDQ OTC FX FUTURES.

Go and check how much investors are already hedging for net one year. It's not above 366. They cannot all be fools.

I ask you a question, would it have been a wise decision to buy Treasury bills in naira at 18% last year or invested in dollars to cash out after a year.

It is very clear that my Treasury bills of 18% last year was a better decision.

Treasury Bills of last year, a good decision till date? Of course it will be.

But I have been talking about medium to long term here, and I never said people shouldn't buy Tbills, but I have always advised for people to hedge.

b]Go and check how much investors are already hedging for net one year. It's not above 366. They cannot all be fools.
[/b]

Sir, this reasoning is very risky. Because everyone says so, it must be true? Because the general market sentiment is this, it must be so? Damn... market sentiment can change in the blink of an eye, what the current market data says means nothing for the future.

At this stage I think I have known all what I wanted to. Confirm. Thanks for the argument guys. I will try to reply anything from here out, no promises though. I have learnt a lot today to be honest, I apologize if you guys didn't learn anything from me though.

ahiboilandgas:
the cbn governor have all the data and research team at his disposal...he can see all the bank balance in nigeria and where the money is he has more data and info more than any body in nigeria including the president (on money matter)...you don't joke with the chairman of federal reserve bank..cos his statement and body language can make or mar an economy

- Something is clearly wrong with CBN Monetary policies ..
- We have been fighting excess liquidity for the past 30 yrs with the same model without no solution
- Dont understand why CBN will continue to borrow at exorbitant rate in the name of excess Money supply
- Why should banks lend to the real sector when they can make clean 12 -13% without lifting a finger in T bills
- Even when banks decide to lend, no one will take the loan cos of excessive int rate above 30% pa
- We just need to find another model to fix this excess liquidity menace..

Indigbo:


can someone advice whether the best is to liquidate now because I'm scared of this inflation thing am hearing here, I don't want to lose my hard earned cash. Pls how much will i lose if i liquidate now 9,600,000?

the tb experts pls answer this

Willie2015:


- Something is clearly wrong with CBN Monetary policies ..
- We have been fighting excess liquidity for the past 30 yrs with the same model without no solution
- Dont understand why CBN will continue to borrow at exorbitant rate in the name of excess Money supply
- Why should banks lend to the real sector when they can make clean 12 -13% without lifting a finger in T bills
- Even when banks decide to lend, no one will take the loan cos of excessive int rate above 30% pa
- We just need to find another model to fix this excess liquidity menace..

Lol. Insanity is doing the same thing over and over again and expecting different results.

You asked the right questions man. I don't know if Tbills return is making people ignore this problems. Time will tell.

Indigbo:


the tb experts pls answer this

Sir. Why don't you just hedge? Some in naira (Tbills) and some in FX? Fixed D or EuroBond?

GonFreecss1:


Sir. Why don't you just hedge? Some in naira (Tbills) and some in FX? Fixed D or EuroBond?

Thats i've been asking if it's advisable to liquidate because of this inflation am seeing up & down here but no one is ready to respond except u now, i just want to know if its advisable to liquidate now to avoid touching story for myself & to know the amount am going to lose from my invested capital if i liquidate prematurely now barely a week.

Indigbo:


Thats i've been asking if it's advisable to liquidate because of this inflation am seeing up & down here but no one is ready to respond except u now, i just want to know if its advisable to liquidate now to avoid touching story for myself & to know the amount am going to lose from my invested capital if i liquidate prematurely now barely a week.

it depend on your risk appetite it like judgement day all man for himself ...even cbn governor can't be 100 percent sure .u can diversity to mitigate any loss

ahiboilandgas:
it depend on your risk appetite it like judgement day all man for himself ...even cbn governor can't be 100 percent sure .u can diversity to mitigate any loss

Ok, is it possible all my 9.6 could be wiped out just like that because of inflation or its only the profit that can be wiped out? i thought capital is 100% guarantee even if all profit is wiped out because of inflation or whatever?

Indigbo:


Ok, is it possible all my 9.6 could be wiped out just like that because of inflation or its only the profit that can be wiped out? i thought capital is 100% guarantee even if all profit is wiped out because of inflation or whatever?

Now I understand your fears.

Understand that first thing first, your principal is guaranteed.

Nothing is wiping your money the way it's sounding because you didn't invest in a highly risky business. This is federal government security we are talking about.

Do not liquidate. Since you have bought the Treasury bills, your principal is coming back to you intact. You have gotten your interest already.

The wiping out someone said was a situation where exchange rate becomes so high and inflation follows, the purchasing power of your money is impacted. It doesn't mean your money is wiped out like you won't see your money again. Your principal will come back to you 100%.

If u decide to liquidate, what you stand to loose is part of your interest but never your principal.

I hope that calms your nerves

unite4real:


Now I understand your fears.

Understand that first thing first, your principal is guaranteed.

Nothing is wiping your money the way it's sounding because you didn't invest in a highly risky business. This is federal government security we are talking about.

Do not liquidate. Since you have bought the Treasury bills, your principal is coming back to you intact. You have gotten your interest already.

The wiping out someone said was a situation where exchange rate becomes so high and inflation follows, the purchasing power of your money is impacted. It doesn't mean your money is wiped out like you won't see your money again. Your principal will come back to you 100%.

If u decide to liquidate, what you stand to loose is part of your interest but never your principal.

I hope that calms your nerves

thank u sir, i really appreciate

vacanci:


Have had of the FMDQ OTC FX FUTURES?

that's CBNs strategy to help speculators who expect the dollar to rise, get their hands burnt. It is a way of reducing present demand in order to cub hike.

Investors are already buying into the future and as of November 30, FMDQ published November 2019 rate of about 366 Naira to a dollar.

August 2017 dollar was 360.
November 2018, dollar could not gain up to 2%

Why will someone think of hedge.

CBN has seen the worse in 2016/17. They are better prepared this time around and speculators will get their fingers burnt just like the 520 to 360 crash. This were Emefiele's words yesterday.

we've been through $27 per barrel, reserves have almost doubled from the $22bn lows of 2016. The largest portion of FPIs panic exist has been settled.

So, certainly sir, the worst is behind us.

Now, to Gonfreecss1:

A report also says FX import bill has reduced significantly.
one small proof of that is the fact that L'oreal, Biersdorf, and Wilmar, makers of Softsheen Carson® Sporting Waves, Nivea, and Kings vegetable oil have all set up production facilities in Lagos due to the 41 item Fx restriction list which includes Cosme tics and veg. oil.

so these 3 brands and more no longer form part of our import bill. And while you may want to argue on repatriation, you should note that it would only be on the portion of the profit that's attributable to the foreign equity holders of these firms. This may be as low as just 5% of gross sales.

awesomeJ:

we've been through $27 per barrel, reserves have almost doubled from the $22bn lows of 2016. The largest portion of FPIs panic exist has been settled.

So, certainly sir, the worst is behind us.

Now, to Gonfreecss1:

A report also says FX import bill has reduced significantly.
one small proof of that is the fact that L'oreal, Biersdorf, and Wilmar, makers of Softsheen Carson® Sporting Waves, Nivea, and Kings vegetable oil have all set up production facilities in Lagos due to the 41 item Fx restriction list which includes Cosme tics and veg. oil.

so these 3 brands and more no longer form part of our import bill. And while you may want to argue on repatriation, you should note that it would only be on the portion of the profit that's attributable to the foreign equity holders of these firms. This may be as low as just 5% of gross sales.

Okay then. Let's watch and see how this will all play out. Time will tell.

Indigbo:


Ok, is it possible all my 9.6 could be wiped out just like that because of inflation or its only the profit that can be wiped out? i thought capital is 100% guarantee even if all profit is wiped out because of inflation or whatever?

Bro. You will always get your Principal and even the interest. Tbills is safe, very safe, when it comes to your naira returns.

All I have been talking about is buying power over time. Inflation cannot just wipe out your naira, that's not what it does.

Just take for instance when we used to buy sweets and chewing gum with kobo, now 1 tom tom is 10 naira. That's all I have been talking about in a nutshell. Sorry if I scared you sir, I apologize.

awesomeJ:

we've been through $27 per barrel, reserves have almost doubled from the $22bn lows of 2016. The largest portion of FPIs panic exist has been settled.

So, certainly sir, the worst is behind us.

Now, to Gonfreecss1:

A report also says FX import bill has reduced significantly.
one small proof of that is the fact that L'oreal, Biersdorf, and Wilmar, makers of Softsheen Carson® Sporting Waves, Nivea, and Kings vegetable oil have all set up production facilities in Lagos due to the 41 item Fx restriction list which includes Cosme tics and veg. oil.

so these 3 brands and more no longer form part of our import bill. And while you may want to argue on repatriation, you should note that it would only be on the portion of the profit that's attributable to the foreign equity holders of these firms. This may be as low as just 5% of gross sales.

small analysis

GonFreecss1:


So because the CBN governor said so, it must be true? He can surely see the future. Maybe I will meet him and ask him to predict if I will live for a 1,000 years? Of course he will always say optimistic things!

But then again, he was the same person who complained that Banks are only buying Treasury bills and not lending people money. He complained that banks should be a form of balance to the economy. So why is he not happy Banks are buying Tbills? He should be thrilled. He should be ecstatic, banks are helping to mop up excess Naira supply too by buying Tbills. Less naira in supply, why is he frustrated about it?


Hahahahahahahahahahahahahahahahahaha


Common guys! When Dr Barry went to Goldman sachs to bet against the real estate market, they laughed at him. He was even worried they wouldn't be able to pay him, they laughed still... we all know what happened at the end and who laughed last. Can the naira improve? Of course! But because the CBN governor said so? Hmmn... we have short term memory in this country.

Of course if Emefiele makes talks on this matter, then more than anyone else in the world, he is to be taken seriously. Short term memories? When has Nigeria ever been able to double Its reserves or have exchange rate stability for almost 2 years running with a sub $80 oil price. These monetary guys are certainly doing much better than their predecessors.

Short memories? What was the talk when the CBN flooded the market with dollars in April 2017, was it not that the interventions weren't sustainable, that reserves would get depleted?
Those speculators who waited for the CBN to tire out what was their fate?

Yet reserves went from $30bn at that time to almost $48bn.
Then we've had to cope FPIs exit and August holidays demand, reserves are recovered back above $42bn.

On why CBN wasn't happy with banks doing TBills,
that's not too hard to figure now. We didn't say CBN gets excited when banks do T-bills, we only said, to achieve their core objectives of price stability and exchange rate stability, they will always suck up excess liquidity from the system. That doesn't mean they desire excess liquidity to be available for them to suck up. Actually, they prefer that the liquidity gets sucked up via lending to the real sector, as it's cheaper for them that way and healthier for the economy, especially one that's just exiting recession.

But like I said earlier, it's up to o a bank how they manage their balance sheet. so while the CBN's preferred option is real sector lending, it can't force it on any bank. all it can do is make its bills less attractive to dissuade them. And that it did crashing NTB yield from a peak of about 23% to as low as 13%.

Indigbo:


Ok, is it possible all my 9.6 could be wiped out just like that because of inflation or its only the profit that can be wiped out? i thought capital is 100% guarantee even if all profit is wiped out because of inflation or whatever?

Gonfreecss1, you see what you've caused now? someone is there thinking his 9.6m will be gone to devaluation by next week.

[just joking o]

Dear Indigbo. Please wait till maturity for your bills since it's just barely a week as you said. by the time you're reinvesting you can diversify to a bond mutual fund as buying eurobonds directly may not be feasible with only a portion of the 9.6m. I hear it's done with sums in the neighborhood of 70m.

I am kinda more aggressive about yields which is why as long as I see meaningful stability with rates, I'd choose a 16% NTB over a 7% eurobond. That's just a personal style though. Our circumstances aren't the same so our investment decisions shouldn't be.