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Nairaland Forum / Nairaland / General / Politics / Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption (12047 Views)
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Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by seguno2: 8:40pm On Oct 12, 2021 |
Shooyie: Playing to the gallery for political points ![]() |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Krismas(m): 8:41pm On Oct 12, 2021 |
![]() Dats wot capitalism is all abt! How to close d gap is d real issue. Coming from a govt. dat. Promised to make N1=$1? SMH. They stopped BDCs on allegation of terrorism financing, without any tested alternative. Rather than expose those involved in it for prosecution |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Doubleoh7: 8:43pm On Oct 12, 2021 |
Tareq1105:And I guess my BDC brothers were put in charge of the country and economy? How convenient it is always to blame everyone else but the ones in charge. 2 Likes |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by grandstar(m): 8:49pm On Oct 12, 2021 |
The solution to the problem is simple. I do not support the devaluation of the Naira to 575 as that would make the Naira too weak. The Naira hit that low because the CBN ended the sale of $20,000 weekly to each BDC weekly at about 410 and who resold it at the parallel market rate of around 480. All that was needed to end the massive difference was simply to devalue the official rate of Naira at the official rate to about 460-470 to close the gap. Rather than do devalue, since Buhari would have none of that, he blamed the 480 rate to the activity of greedy BDC's. Instead, the CBN ended the sale of dollars to the BDC's and commercials were now to be selling to the public at the official rate. PMB was simply living in denial. This action of sales through the banks led to artificial scarcity in the market as it takes weeks before you get your dollars due to bureaucracy unlike instantly from the BDC's. I was once at a bank and a travel agent came in to buy dollars from the mallams who lurk in banks.He complained that his client who is studying overseas is desperately in need of dollars to pay his fees and can't wait for the banks, that they will take forever. The travel agent berated the government for stopping sales of forex to the BDC's. That is what caused the fall of the Naira to the 575 level it is today. When Lamido Sanusi assumed office in 2009, he met an official rate of 120 to a dollar and 190 at the parallel rate. This was due to the fact that Charles Soludo, his predecessor, refused to devalue the Naira when it was so glaringly necessary. Oil prices had collapsed from over $120 the previous year to $35 in 2009. Soludo, probably out of shame refused to do the obvious. Lamido Sanusi on the other hand had no such qualms. He wasn't the creator of the mess he met on the ground. He simply devalued the Naira to around 155 and the parallel rate hit 160 overnight. Problem over. He said the official rate must not have a differential of more than 3% from the parallel rate as it leads to roundtripping and other malpractices. It might be wise to try it again. s 2 Likes 1 Share |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by grandstar(m): 8:56pm On Oct 12, 2021 |
Lovenorth: He should not sell himself to Nigerians. If he wants the top job, he only needs to sell himself to Buhari. Once Buhari endorses him, he is 70% likely to get the top job. Buhari has a powerful fan base in the North that would be Osinbajo's if supported by him. Osinbajo would most likely get the Yoruba vote. By then, he already has two-thirds of the country in his hand. 1 Like |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by TheRareGem1(f): 9:16pm On Oct 12, 2021 |
lexy2014: They video will answer your question. Kill your curiousity. Watch from the beginning to the end. 1 Like 1 Share |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Ehisod(m): 9:16pm On Oct 12, 2021 |
Is it wrong to sell himself. Lovenorth: |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by lexy2014: 9:17pm On Oct 12, 2021 |
TheRareGem1: seems u didnt understand what u read. calling here and there as if it is phone call. members of osinbajo social media team trying desperately to justify their pay. is osinbajo and d CBN governor not in d same govt that osinbajo is trying to call d attention of d CBN governor? |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by hahn(m): 9:20pm On Oct 12, 2021 |
teeytimi: Exactly! The $100/month limit on debit cards is simply ridiculous and a clear plot to create artificial scarcity of the dollar. Cbn should increase the limit to $1,000/month for savings account and see how the rate of dollars will drop overnight. These guys are just thieves I swear 1 Like |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Lovenorth: 9:25pm On Oct 12, 2021 |
Ehisod:No, it is good to sell himself but he should do that openly. Why is he afraid? |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Shooyie: 9:34pm On Oct 12, 2021 |
lexy2014: You never have anything logical to contribute honestly. 2 Likes |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by themanderon: 9:45pm On Oct 12, 2021 |
Is like his past time is now to give "Talk shows" upandan on white elephant policies his lords will never implement. |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Demurray: 10:05pm On Oct 12, 2021 |
Shikena:please kindly ignore this kindergarten brain like someone as said. You have time share. 1 Like |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Krismas(m): 10:20pm On Oct 12, 2021 |
grandstar: ![]() |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by grandstar(m): 10:43pm On Oct 12, 2021 |
Krismas: Did you understand what I wrote? |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by vicdom(m): 10:58pm On Oct 12, 2021 |
airsaylongcome:I wonder ooo... Most Nigerians don't understand English at all. What does he mean that our exchange rate is low and there's need to move it closer to the market realities?? It means actually raising our official exchange rate closer to 570 which is the current market reality and that means devaluation. Most Nigerians are just daft. Tufiakwa!! |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Krismas(m): 11:24pm On Oct 12, 2021 |
grandstar: ![]() |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by kayjay69(m): 11:55pm On Oct 12, 2021 |
always remember folks, the easiest thing for lawyers to do is talk, they know how to talk and they always talk a big game, infact it is what they are trained and paid to do. Nigeria has never been short of talkers, Nigeria has always been short of talkers who walk the talk when convenient and when not. 1 Like 1 Share |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Okhuadams(m): 11:57pm On Oct 12, 2021 |
Lovenorth:Can you afford him |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by grandstar(m): 12:36am On Oct 13, 2021 |
Krismas: Getting a visa stands on only basic foundation: that is - your present status. If you worked in Chevron 2 years ago and you were giving a visa, this year you're now self employed, they would have to re-evaluate your application. In forex, your fundamentals are what determines your exchange rate. The currency slumped because the price of oil slumped from about $100 per barrel in 2014 to $50 by May 2015 and still went further down to $35. So, let's say Nigeria exports 2m barrels of oil daily, multiplied by $100 you get $200m daily entering the economy. Then the price plummet to $35 and $70m daily instead. Would the value of the Nair increase or depreciate based on the fundamentals here? |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Krismas(m): 12:49am On Oct 13, 2021 |
grandstar: ![]() |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by ORIAYO70(m): 1:00am On Oct 13, 2021 |
Shooyie: This guy is just too brilliant Lawyer turn economist 1 Like |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by grandstar(m): 1:41am On Oct 13, 2021 |
hahn: My brother, before Buhari enter, it was $1,000 a day limit. Imagine going to the bank now to apply for BTA? All you needed then was your Naira card to spend overseas. This man has wrecked or finished the economy. It's unwise to rely on man (Read Psalms 146:3-4) |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by grandstar(m): 2:00am On Oct 13, 2021 |
Krismas: Fiscal discipline like you mention can be a good fundamental. Your currency is less likely to depreciate. But there are so many fundamentals that determine or 8nfluemve the value of your currency. For instance, if Buhari is permitted to run for a 3rd term, this may lead to an massive outflow of dollars from the economy because investors have no confidence in h and are sure he is bound to win. However, the depreciation of the Naira from last year was due to the collapse in oil prices which starved the economy of dollars but revenue as well. This would have compelled the government to borrow heavily. .Add to it was the spending binge by the government to pull the economy out of the lockdown induced recession. The money used was largely borrowed and increased Naira in circulation. 1 Like |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by KaluwisxPRO: 2:01am On Oct 13, 2021 |
So the CBN Governor no dey attend FEC..? |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by KaluwisxPRO: 2:05am On Oct 13, 2021 |
vicdom: Please keep quiet, that is not what it means. The CBN did something immediately this Government got in, they thought they were doing those who had savings in USD. Your president gave the directive for Nigerians to only have access to $100 monthly, because in his Logic, Nigerians spend too much on foreign trips. ( The same trips he’s gone to severally this pandemic year alone). When they did that, they created a fake dollar scarcity, for the masses to get USD from black market, created a fake forex window, where only a selected few elites with importers privileged, like oil importers or to access USD at N190 (bankers call it round tripping) (fake buy and sell orders from Nigeria, channeled bank in as inflow to resell at black market), while the dollar was N240. (This has been on since this administration) This artificial scarcity around the masses made it seems there’s no dollar, while some few were getting it discounted. Burea de change were also getting same, but because they only have access to such rate twice weekly (Tuesday and Friday) it was not enough for them to hoard. While you and me are fighting to get the USD at N570, some are getting it for fake import duties at N410, funded by the CBN. What the Vice President is asking for is for a level playing ground where everyone gets the USD at the rate of the CBN. why are the banks afraid to pay more than $100 at the rate of N410..? Why are banks willing to pay you N5 extra on every USD? Because that’s only N5 from their N160 profit per USD, that’s %40 profit banks are making from every dollar. Lemme ask you, do banks return their excess USD to the CBN…? If not, then why should someone who bought BTA..? Can you see where the Fraud lies? 1 Like |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by KaluwisxPRO: 2:33am On Oct 13, 2021 |
grandstar: Your friend is a liar, paying foreign school fees from Nigeria, is at the rate of N410 from any Nigerian bank, it is stated that foreign medical and school fees are not subject to parallel rate. you don’t need to buy USD from black market. What your friend did is the reason legit users find it hard to access. Also what is the % of Nigerians abroad that pays more than $3000 per semester in higher institutions? Now do this maths. Supposing those students are allowed access to USD up to $1500 monthly by their Nigerian banks like before the administration got in, which Nigerians do you think will be struggling to access the USD..? They took access of USD from the majority of users (masses) and gave that privilege to a selected few while the masses gets $100 monthly, and black market to struggle with. Diasporas remittance is still the largest source of Forex for Nigeria (But same Diaspora's, can’t spend their inflows abroad at the same rate) and not even OIL. Now foreign companies who bring in their Dollar at N410 are forced to get the USD at 570 when they need need it locally. How do you expect them to make profit? 2 Likes |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by einsteine(m): 2:55am On Oct 13, 2021 |
Osinbajo always talking like he is not part of the government. By the way, a call for more market determined rates at the official window is effectively a call for devaluation. Or what would you call it, if CBN rates become 575 and parallel market rates become 600? The arbitrage would have been reduced but as far as everybody are concerned, devaluation has occured. Not that devaluation is a bad thing though. |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by Krismas(m): 3:01am On Oct 13, 2021 |
grandstar: ![]() |
Re: Why Osinbajo Advocates Forex Policy That Curbs Arbitrage & Corruption by einsteine(m): 3:02am On Oct 13, 2021 |
KaluwisxPRO: Stop insulting people. It is very clear that you don't understand the VP. Devaluation is not necessarily a bad thing. The VP's call for the reduction of the arbitrage and a change of the exchange rates towards more market determined rates is effectively a call for devaluation. Which rate do you think is the market determined rate? The one fixed by the CBN or the one that anybody willing to buy dollar buys at? So now on the basis of that, does this emotional nonsense you wrote make sense to you? 1 Like |
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