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Nairaland Forum / Nairaland / General / Politics / Naira Falls To 230, Dollar Supply Dries Up (1884 Views)
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Naira Falls To 230, Dollar Supply Dries Up by Karlman: 6:34am On Jul 02, 2015 |
Naira falls to 230, dollar supply dries up JULY 2, 2015 : OYETUNJI ABIOYE These are definitely not interesting times for the nation’s economy, particularly the national currency, the naira, no thanks to the depleting reserves and the subsequent banning of importers of 41 items from the foreign exchange market by the Central Bank of Nigeria. Barely 10 days after the CBN stopped forex sale to importers of rice, textile and 39 other items, the naira on Wednesday crashed to 230 against the United States dollar at the parallel market, down from 218 recorded on June 23 when the new forex rule was introduced. The policy, which has pushed huge forex demand from the interbank (official) market to the parallel (black) market and the Bureau de Change retail segment, has led to artificial scarcity of dollar and other major foreign currencies as operators now hoard them in anticipation of higher prices. The naira had fallen to 220, 223, 226.5 and 228 against the dollar in the past one week. Black market and BDC operators, however, told our correspondent that serious dollar liquidity squeeze was already hitting the market and operators were no longer in possession of huge stock of forex to meet rising demands, especially from the importers of the banned items. Using the CBN figures, analysts had estimated that about $5.7bn quarterly forex demand was being transferred from the official interbank market to the black market. “The situation is getting critical now. There is serious dollar liquidity squeeze in the market now. The demand is overwhelming and both the black market and the BDC segment can no longer meet the demand,” a black market operator told our correspondent on Wednesday. “The market is very volatile now as a result of the restrictions placed on about 41 items by the central bank. Most importers are now patronising the parallel market to source their dollars,” the head of a BDC, Mr. Harrison Owoh, told Reuters on Wednesday,.Meanwhile, the Association of Bureau De Change Operators has written to the CBN asking it to intervene in the dollar scarcity in the parallel market and the BDC segment to save the naira from crashing further. In the letter, a copy of which was obtained by our correspondent, the association expressed its readiness to work with the CBN to stabilise the market. The letter, signed by association’s President, Alhaji Aminu Gwadabe, and Executive Secretary, Uduma Cletus, advised the CBN to increase its weekly forex sale to the BDCs from $30,000 to $50,000. The body also asked the central bank to reintroduce the autonomous market where it could sell about $100,000 to the operators. Gwadabe told our correspondent that it was expedient for the CBN to increase its forex sale to the BDCs in order to stabilise the naira. Some analysts believe the naira may hit 240 against the dollar in the coming days. However, the naira traded at 198.95 to the dollar at the interbank market on Wednesday, according to Reuters. The central bank had lowered its exchange rate peg to N196.95 to the dollar on Tuesday from N196.90 last week Also, a trade of $735.74m went through on Nigeria’s interbank currency market at N198.45 on Wednesday, Thomson Reuters data showed. Market sources said a foreign client had sold dollars to a bank in Nigeria. Total interbank market volumes stood at $1.12bn on Wednesday, far higher than typical trading sessions since the central bank introduced a naira peg in February. Meanwhile, the CBN has reminded dealers and banks that their dollar cash sale for six items, including schools fees, insurance premium, basic travel allowance and monthly mortgage should not exceed $5,000. In a new circular dated July 1, 2015, the CBN also warned banks not to sell forex to the importers of the 41 items that were banned from the forex market last week. www.punchng.com/news/naira-falls-to-230-dollar-supply-dries-up/ 1 Like
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Re: Naira Falls To 230, Dollar Supply Dries Up by Feranchek(m): 6:36am On Jul 02, 2015 |
Eleyi gidi gan oo0o0!!!!!! |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 6:36am On Jul 02, 2015 |
Leading to crises and America will be happy to hear this. ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by ojimbo(m): 6:37am On Jul 02, 2015 |
Mbaka, what have you to say abi God no dey reveal to you the ones wey get good luck and the ones wey get bad luck? 2 Likes |
Re: Naira Falls To 230, Dollar Supply Dries Up by MKO4ever(m): 6:38am On Jul 02, 2015 |
Okay 1 Like |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 6:39am On Jul 02, 2015 |
ojimbo: You don't judge that way, your yesterday is now hunting you; you're now crying foul. 3 Likes |
Re: Naira Falls To 230, Dollar Supply Dries Up by grandstar(m): 6:45am On Jul 02, 2015 |
when will they sack this man? he is ruining the economy ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by ShowYourCertificate: 6:48am On Jul 02, 2015 |
Buhari has destroyed our economy. I knew what I was saying when I was demanding for the Dullard's Certificate. He knows ziltch about economics. He's a confirmed dullard from Daura [size=25pt]#ShowYourCertificate #BabaOneChance #DauraDullard[/size] 4 Likes 1 Share |
Re: Naira Falls To 230, Dollar Supply Dries Up by Lucasbalo(m): 6:48am On Jul 02, 2015 |
mistabiola:America has got nothing to do with the devaluation if your Naira. |
Re: Naira Falls To 230, Dollar Supply Dries Up by Karlman: 6:50am On Jul 02, 2015 |
ojimbo: Lolz Can't possibly imagine how Jonathan would be feeling. I mean, that man was simply brought down by clueless people. |
Re: Naira Falls To 230, Dollar Supply Dries Up by seedgreen(m): 6:53am On Jul 02, 2015 |
Following |
Re: Naira Falls To 230, Dollar Supply Dries Up by Karlman: 6:57am On Jul 02, 2015 |
Now what has changed since this Rudderless party took over power, on the contrary, things have gone worst. The North just wanna be in Power at all cost without any iota of idea how to improve on the developmental progress of the country. Unfortunately as it is the north always found a willing accomplice in their quest to continue ruining the nation. A particular group of people has ran a country for over 40years with nothing to show for it other than their very region remaining the poorest even against another region that went through the bitter experience of civil war defeat. This is not about pessimism, but I can assure everyone that until Nigeria is restructured to place Merit above such mediocre policies like Federal Character & Quota System, nigeria would remain stagnant even for a hundred years from now. |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 7:04am On Jul 02, 2015 |
Lucasbalo: The devalued naira will drive export of local products, which do not exist in the required volume for now, but will create an additional burden on the populace, the reason being that the cost of consumables, across the board, will escalate. As the direct consequence of the raise in the base lending rate the cost of loanable funds would have risen. In such case the development will be counterproductive, and against the thrust of the government’s touted plan to create jobs. The prices of local products serve as an incentive and a toast for foreign buyers which the America is one of them and it will only cause more damage than good to Nigeria economy. ![]() ![]() 1 Like |
Re: Naira Falls To 230, Dollar Supply Dries Up by EasternPride: 7:07am On Jul 02, 2015 |
Very soon, zoo's money will be more worthless than Zimbabwean currency. 1 Like
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Re: Naira Falls To 230, Dollar Supply Dries Up by EasternPride: 7:16am On Jul 02, 2015 |
mistabiola: Na today? What do u produce that you export? |
Re: Naira Falls To 230, Dollar Supply Dries Up by Lucasbalo(m): 7:23am On Jul 02, 2015 |
mistabiola:And you say that to put the blame on America for the bastardization of Nigeria's economy by so many of the past worthless leaders of Nigeria. |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 7:24am On Jul 02, 2015 |
EasternPride: Petroleum and Petroleum products, Cocoa, Rubber, Machinery, Processed foods, Entertainment etc. ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 7:26am On Jul 02, 2015 |
Lucasbalo: I'm not blaming them, I mean it's going to be an economic advantage for them. ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by Lucasbalo(m): 7:30am On Jul 02, 2015 |
mistabiola:Believe me my brother, it doesn't make a difference if 1Naira is equivalent of 1$. America's economy doesn't need Naira. |
Re: Naira Falls To 230, Dollar Supply Dries Up by sweat4wat(m): 7:31am On Jul 02, 2015 |
This is bad news for big importers I swear |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 7:33am On Jul 02, 2015 |
Lucasbalo: But it's going to affect our economy negatively. ![]() ![]() I'm worried about my country, I can't deny I'm a Nigerian.
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Re: Naira Falls To 230, Dollar Supply Dries Up by stepo707: 7:34am On Jul 02, 2015 |
Jesus wept |
Re: Naira Falls To 230, Dollar Supply Dries Up by Lucasbalo(m): 7:37am On Jul 02, 2015 |
mistabiola:I see your point. I don't like it myself and it's kind of advantageous to me because I have business dealings in Nigeria. I have to feel for Nigerians since I am of both stock and I am very frequent to Nigeria both for business and holidays . Hopefully, the leaders will turn the economy around for the benefit of all Nigerians. |
Re: Naira Falls To 230, Dollar Supply Dries Up by Jorussia(m): 7:41am On Jul 02, 2015 |
I think buhari should sack Godwin emefiele before he ruins his govt for him. |
Re: Naira Falls To 230, Dollar Supply Dries Up by richidinho(m): 7:42am On Jul 02, 2015 |
Chai..if this man stays beyond 2019 our currency will be like Zimbabwe dollars Dollar was |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 7:46am On Jul 02, 2015 |
Lucasbalo: Which business are you into ![]() ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 7:48am On Jul 02, 2015 |
richidinho: Oboy!!! This is a curse. It seems you're saying this out of ignorance ![]() ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by banki(m): 7:56am On Jul 02, 2015 |
Even the previous government told us that we should tighten our belts especially this year, the minister of finance painted a very gloomy picture Now a new government is in place we expect that things will change, but things must get bad then get better |
Re: Naira Falls To 230, Dollar Supply Dries Up by Lucasbalo(m): 7:58am On Jul 02, 2015 |
mistabiola:I am not into money laundering. I work for a big investment firm with offices in all continents of the world including Africa where my firm hqtrs is based in Johannesburg. I frequent S/A and Nigeria a lots and i have real estate investments in the two countries. 1 Like |
Re: Naira Falls To 230, Dollar Supply Dries Up by mistabiola: 8:08am On Jul 02, 2015 |
Lucasbalo: Can we partner with you. ![]() ![]() ![]() ![]() ![]() |
Re: Naira Falls To 230, Dollar Supply Dries Up by Lucasbalo(m): 8:12am On Jul 02, 2015 |
[quolte author=mistabiola post=35386800] Can we partner with you. ![]() ![]() ![]() ![]() ![]() |
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