Global investment and financial institution, Goldman Sachs Group Inc., has said the devaluation of the naira by the Central Bank of Nigeria (CBN), though necessary, was not a sufficient condition for unifying the official and parallel market exchange rates.
In the same vein, renowned economist and Managing Director and Chief Executive Officer of Financial Derivatives Company Limited, Bismarck Rewane, yesterday, urged the federal government to implement institutional reforms to augment ongoing monetary and fiscal policy reforms.
This was just as the naira depreciated further yesterday, to N702/$1 on the investors and exporters’ (I & E), lower than the N664.04 to a dollar it closed the previous day.


Although the naira closed at N702/$1 on the I & E FX window, data from FMDQ showed that the highest spot rate recorded was N791/$1.
Also, on the parallel market, the nation’s currency depreciated by N7 from N755 to a dollar the previous day, to N762 to $1 yesterday.
The central bank on Wednesday, collapsed all of its multiple official FX rates into the I&E window.
Goldman Sachs Group noted that while the end-game for monetary/FX policy in Nigeria was still, “quite uncertain, we nonetheless interpret the incremental developments as positive.”


Specifically, Goldman Sachs noted that the apex bank had failed to “provide any clarity on current/capital account FX restrictions that result in a parallel market exchange rate that is weaker than that offered at the official window(s)”.
Goldman Sachs also stated that easing FX restrictions and clearing the FX backlog which it estimated at $12 billion, would be required to achieve a unified naira exchange rate.

https://www.thisdaylive.com/index.php/2023/06/16/goldman-sachs-naira-devaluation-not-sufficient-condition-for-exchange-rates-unification-wants-clarity-on-fx-restrictions

@mynd44

Okay

Proper planning was required for rate unification. Neither CBN nor FG had a grip of the market to open it up to supposed market forces. This is definitely a game speculators and banks love to play.

"Although the naira closed at N702/$1 on the I & E FX window, data from FMDQ showed that the highest spot rate recorded was N791/$1"

"Also, on the parallel market, the nation’s currency depreciated by N7 from N755 to a dollar the previous day, to N762 to $1 yesterday"

Lessons will be learnt

Flets:

Goldman Sachs also stated that easing FX restrictions and clearing the FX backlog which it estimated at $12 billion, would be required to achieve a unified naira exchange rate.


https://www.thisdaylive.com/index.php/2023/06/16/goldman-sachs-naira-devaluation-not-sufficient-condition-for-exchange-rates-unification-wants-clarity-on-fx-restrictions

We will get there

From 664 to 702 in one day. What will now happen in one year?

how high the exchange rate is doesnt matter solong we produce and sell to others....

japanese yen is very high too but the difference is they export alot....
next step is to criminalize black market rates....

tsdarkside:
how high the exchange rate is doesnt matter solong we produce and sell to others....

japanese yen is very high too but the difference is they export alot....
next step is to criminalize black market rates....

As long as CBN cannot satisfy all fx demands, and we still need Form A, M etc to source FX from the banks, black market aint going anywhere.
Nigeria is a highly import dependent nation. Until our balace of trade is positive, all of these actions by FG and CBN are knee jerk reactions.

You cannot remove subsidy and float naira at the same time you are going to kill the masses in the long run. Imf poliies are not for corrupt nations.

(((Goldman Sachs))) will not stop until Nigeria's currency is trading at #1,000,000 to a $1.

This is how they force nations to devalue their currency and peg it to their fiat dollar.

It's a heist on a nations resources and labour force .

Flets:


As long as CBN cannot satisfy all fx demands, and we still need Form A, M etc to source FX from the banks, black market aint going anywhere.
Nigeria is a highly import dependent nation. Until our balace of trade is positive, all of these actions by FG and CBN are knee jerk reactions.

thats why we have to criminalize it....
when people land in jail when caught,it will reduce....

thats the only way....

tsdarkside:


thats why we have to criminalize it....
when people land in jail when caught,it will reduce....

thats the only way....

As long as CBN and banks cant meet the FX demands completely without hassles of Form A, M etc..... you cant do anything about the black market. The parallel market addresses the inefficiency of the banks.

CBN does not have sufficient FX to meet national demand and that is why floating rates was a bit premature

Flets:


As long as CBN cannot satisfy all fx demands, and we still need Form A, M etc to source FX from the banks, black market aint going anywhere.
Nigeria is a highly import dependent nation. Until our balace of trade is positive, all of these actions by FG and CBN are knee jerk reactions.

anybody caught usin black market should land in jail....
both seller and buyer....

Flets:


As long as CBN and banks cant meet the FX demands completely without hassles of Form A, M etc..... you cant do anything about the black market. The parallel market addresses the inefficiency of the banks.

CBN does not have sufficient FX to meet national demand and that is why floating rates was a bit premature

you must criminalize black market....
infact even criminalize the use of dollars in nigeria....

tsdarkside:


you must criminalize black market....
infact even criminalize the use of dollars in nigeria....

Criminalizing everything wont take away FX demands. The demands are real because we are an import driven nation and very low on manufacturing. Black market aint going anywhere soon.

Flets:


Criminalizing everything wont take away FX demands. The demands are real because we are an import driven nation and very low on manufacturing. Black market aint going anywhere soon.

who says you must use dollars to import stuffs....??
take the local currency of any nation that wants to do business with you....

why use dollars when you need something from south africa....??
take south african rands....

only do business with nations that accept nairas aswell....

tsdarkside:


who says you must use dollars to import stuffs....??
take the local currency of any nation that wants to do business with you....

why use dollars when you need something from south africa....??
take south african rands....

only do business with nations that accept nairas....

LOL... does not work that way. Who will exchange your naira for SA rands?, what are you selling to SA?
USD is the global legal tender for now....

Flets:


LOL... does not work that way. Who will exchange your naira for SA rands?, what are you selling to SA?
USD is the global legal tender for now....

it has to....
nations are startin to do this deals....

wake up....

tsdarkside:


it has to....
nations are startin to do this deals....

wake up....

Okay... best of luck with that. At the global scale, it is not feasible. Like I ask again, what will you offer SA for their rands?

Everybody is pretending the bought theirs for N750/$. Shithole nation.

Flets:


As long as CBN and banks cant meet the FX demands completely without hassles of Form A, M etc..... you cant do anything about the black market. The parallel market addresses the inefficiency of the banks.

CBN does not have sufficient FX to meet national demand and that is why floating rates was a bit premature

There are legitimate demand for forex in the system like imports of raw materials and payment for school fees /services.....on the other hand you have demand for forex borne out of desire to siphon proceeds of corruption and embezzlement of public funds/ and worst is the fraudulent speculation on the dollar by banks and forex operators............if Tinubu is not ready to seize banking license of such banks..........then in less than 3 months the gap between the official and parallel rates will begin to widen again! A lot of forex demanded of CBN are cooked up by the banks!

The biggest pressure on the Naira itself is the astronomical rate of foreign borrowing by the federal government itself! If Tinubu likes let him not consult the service of people like Okonjo Iweala.........to start engaging Nigeria’s creditors!

Economic time bomb.

Abufo:




There are legitimate demand for forex in the system like imports of raw materials and payment for school fees /services.....on the other hand you have demand for forex borne out of desire to siphon proceeds of corruption and embezzlement of public funds/ and worst is the fraudulent speculation on the dollar by banks and forex operators............if Tinubu is not ready to seize banking license of such banks..........then in less than 3 months the gap between the official and parallel rates will begin to widen again! A lot of forex demanded of CBN are cooked up by the banks!

The biggest pressure on the Naira itself is the astronomical rate of foreign borrowing by the federal government itself! If Tinubu likes let him not consult the service of people like Okonjo Iweala.........to start engaging Nigeria’s creditors!

I agree with you for the most part. My concern is Nigerians are very corrupt from the president to the new CBN governor to the guy on the street. Even the best intentions will be rubbished for selfish gain. I maintain that floating the naira is premature and will be exploited at the expense of the Nigerian people. CBN must take hold of the FX market.

Imagine if the banks and speculators conspire to cause a week scarcity of FX?, what leverage does the CBN have over them in a free floating naira market? What if the banks decide to sell at 900 naira?....We do not have an excess supply of USD to overwhelm demand.

Flets:


Okay... best of luck with that. At the global scale, it is not feasible. Like I ask again, what will you offer SA for their rands?

nairas....and we accept their rands in return....

they can buy anything in nigeria with rands,and we in return can buy anything in south africa with nairas....

tsdarkside:


thats why we have to criminalize it....
when people land in jail when caught,it will reduce....

thats the only way....

and who is going to criminalize and land people in jail?? the same people guilty of the same offence? the same super corrupt justice system?? the same system that protect the connected and shied them from prosecution...we need to be realistic with our projection

tsdarkside:


nairas....and we take their rands....

What does SA need our naira for?, SA will pay for a product we have to offer; that's why its called foreign exchange.
SA cant just take our naira and give you rands .... does that now make sense to you?

That is why USD is the preferred legal tender because its acceptable by most nations as means of exchange

Flets:


What does SA need our naira for?, SA will pay for a product we have to offer; that's why its called foreign exchange.
SA cant just take our naira and give you rands .... does that now make sense to you?

That is why USD is the preferred legal tender because its acceptable by most nations as means of exchange

look....if you as a nigerian need for example cloth from south africa,you pay in nairas....
if south africans need casava from nigeria for example they pay in rands....

tsdarkside:


look....if you as a nigerian need for example cloth from south africa,you pay in nairas....
if south africans need casava from nigeria for example they pay in rands....

You are not making any sense

MXrep:

You are not making any sense

kiki....ofcourse not....because they programmed you to think without them the world can not function....

tsdarkside:


look....if you as a nigerian need for example cloth from south africa,you pay in nairas....
if south africans need casava from nigeria for example they pay in rands....

There is something called balance of trade. Nigeria is in deficit because we demand more of what other nations have to offer than what we have to offer other nations.

I am trying to bring this understanding down to the lowest level for you... I hope you get it now. No nation will accept your currency (naira) if they cant use it to buy what you have to offer. Unfortunately, Nigeria does not have a lot to offer the world apart from crude oil which is traded in USD.

Parachoko:
We will get there

Get where without blue print plans

Flets:


There is something called balance of trade. Nigeria is in deficit because we demand more of what other nations have to offer than what we have to offer other nations.

I am trying to bring this understanding down to the lowest level for you... I hope you get it now. No nation will accept your currency (naira) if they cant use it to buy what you have to offer. Unfortunately, Nigeria does not have a lot to offer the world apart from crude oil which is traded in USD.

south africa is in deficit too....

whats your point....??