My own problem is simple. Why banks (Gtbank) also charging N270 for international payments made with a naira card.

Does this move mean banks will now be able to revert to the official rate?

scary stuff....i hope u r nt right..

Wallie:
Too many people are over analyzing the situation.
Here's a simple explanation:

1. Nigerians need dollars to buy stuff abroad.
2. Nigeria only prints Naira.
3. Nigeria has to sell something that pays in dollars so that they earn dollars.
4. Oil pays in dollars but we don't make as much money anymore.
5. Regardless of the price of oil, people still need to buy stuff abroad and pay in dollars.

6. You now go to DBCs and banks to buy dollars with your Naira that wouldn't be accepted abroad.
7. BDCs and banks tell you that they don't have dollars to sell for whatever reason.
8. You go to the black market to buy dollars but law of supply vs demand takes over, and you end up paying a crazy exchange rate.

All cbn is trying to do now is to get the dollars closer to consumers instead of DBCs with the hope that it will alleviate some of the noise.

Here's my take: it won't work unless the CBN (1) reduces demand, and/or (2) earns more dollars by selling more stuff abroad. The cbn governor tried to reduce demand buy stopping people for using debit cards for legitimate reasons and that's a mistake. With this new policy, the Cbn probably hopes that selling dollars directly to customers through banks will curb large scale hoarding by rich people wanting to hold their nairas in dollars but the solution will only work temporarily.

The simple non-punitive solution is to earn more dollars by exporting more. The fast punitive solution is to devalue Naira so that people will become poorer and would in turn buy less dollars.

God bless u..wil dey now charging at 199 per dollar..cbn rate?

otoidea:
My own problem is simple. Why banks (Gtbank) also charging N270 for international payments made with a naira card.

Does this move mean banks will now be able to revert to the official rate?

PaulJohn1:


If it is school fees in the top currencies, you have no problem. Though not easier as before, because it's only possible in one day of the week.


Your banker should be able to help.
The OP even stated it.

" 6. To avoid further depletion in the reserves, the CBN took a number of countervailing actions including the prioritization of the most critical needs for foreign exchange. In this regard, and in order of priority, we decided to provide the available but highly limited foreign exchange to meet the following needs:
· Matured Letters of Credit from Commercial Banks
· Importation of Petroleum Products
· Importation of critical Raw Materials, Plants, and Equipment, and
· Payments for School Fees, BTA, PTA, and related expenses
Student upkeep inclusive

Yeye dey smell... upkeep my foot. For two months now I have applied for forex for my school welfare. I have not got it till now... don't trust this people

I just hope commercial banks pays its customers in dollars not forcefully changing it to naira @197/$ and alas selling @ 280/$. That would redicilous of CBN policies

doctokwus:
This cbn governor is a dunce.
Is he not aware the bdc and ab okis source their dollars mainly from banks?
The banks will simply sell their deposits and up goes the rate again.
Wonder when this Emefiele will be sacked.

And what happens when the Owner comes back for his or her money?

It won't change anything. BDC get only $28m from $250m CBN earns in a week. There are other things depleting the reserve. cbn should stop blaming BDCs.

doctokwus:
This cbn governor is a dunce.
Is he not aware the bdc and ab okis source their dollars mainly from banks?
The banks will simply sell their deposits and up goes the rate again.
Wonder when this Emefiele will be sacked.

banks can't do that again, they need to provide bvn documents of their buyers to the cbn in their statements

If commercial banks are to source for forex from independent sources then we are in for a crazy ride..We might end up getting 300 naira to a dollar..

Let's see how this new scheme pans out...

igboboy3:
BUHARINOMICS
Day 1: Ban all Banks from accepting dollar deposits


Day 4: Instruct all Banks to accept dollar deposits

I don't envy Emefiele at the moment. He has been forced to do a good job with a bad instrument. Northerners run the parallel market racket in this country. No matter where you go, na a.b.o.k.i dey sell dollar. Unfortunately, it is near impossible to ban them.

Nobody will deposit dollars in the banks because you can't be sure of collecting it. Everybody will keep it at home. The innocent business men who need dollars to import can't fund their industry because the BDCs have been cut off.

Which "autonomous source" does the CBN want BDCs to get dollars from? Dasuki?

I think autonomous sources are independent sources like people who got dollar from their relatives abroad

Message is clear, if you are an importer, you need to change and become an exporter.

Otherwise ensure you start importing goods on the CBN approved list, eg. Spare parts for plants etc.

If need to import anything outside the approved list, consider barter trading.

If it were my fellow igbos that their business were cut off, they would start crying blue murder.

Which kain 250. Dollar is selling at 270

busomma:
The banks are not helping matters as a matter of fact. I am in Washington DC as I write this. I withdrew $200 from bank of America @ the rate of N277.8/$ against official rate of N199/$.

Happened to me recently too .

bookface:

Emefiele policies will simply end up harming the Nigerian economy, more than it will help it. He should have listened to the advise of his two predecessors - Sanusi and Soludo - and allowed a moderate devaluation of the Nigerian Naira in other to absorb the shocks of the the low oil prices.

His approach of burning through the foreign reserves, and banning imports will simply harm economic growth in the medium and the longer term. Medium scale businesses that rely a lot on import will now have no choice but to simply go out of business.

It's better for some ppl to go out of business because they don't have valid documentation to enable them source forex directly from banks at interbank rates than a whole lot of Nigerians (including you) to lose the value of the hard earned money that we suffer to get in this country.
What is the minimum wage in Nigeria? 18k. Money that cannot even buy anything meaningful these days and that is what a lot of Nigerians manage to survive on. Now you want it devalued further? So that the 18k (and indeed all our salaries and incomes) to become mere tissue papers?
I'm sorry but I don't think you understand the impact of devaluation in an import based economy. The IMF, World Bank and some very powerful foreign and Nigerian investors are the one pushing for this devaluation because of the huge margins they'll make if the Naira is devalued now.
It's unfortunate that ordinary Nigerians who do not have anything to gain from devaluation (and in fact have all to lose) are the once buying this crap devaluation push.

Dominiquez:
I am still wondering how we allowed a man who retired 30 years ago and never ran any business but rear cow to come back and become our leader.

Welcome to the cow paradise.

So we would have voted for Jonathan?

Just got a mail from gtbank to this effect

Dear Customer,
 
 Resumption of Foreign Currency Cash Deposits at GTBank 
 
We are pleased to inform you that you can now make Foreign Currency Cash deposits into your GTBank domiciliary account(s) at any of our branches from Tuesday, 12thof January, 2016.
 
Our resumption of this service is in response to the Central Bank of Nigeria’s (CBN) directive, issued on the 11th of January, 2016, authorizing Commercial Banks in Nigeria to resume acceptance of foreign currency cash deposits.
 
We appreciate your patronage and thank you for banking with us.

Addicted2Women:

Hi
I wanna ask you a question

Oya na...... Ask

PaulJohn1:


If it is school fees in the top currencies, you have no problem. Though not easier as before, because it's only possible in one day of the week.


Your banker should be able to help.
The OP even stated it.

" 6. To avoid further depletion in the reserves, the CBN took a number of countervailing actions including the prioritization of the most critical needs for foreign exchange. In this regard, and in order of priority, we decided to provide the available but highly limited foreign exchange to meet the following needs:
· Matured Letters of Credit from Commercial Banks
· Importation of Petroleum Products
· Importation of critical Raw Materials, Plants, and Equipment, and
· Payments for School Fees, BTA, PTA, and related expenses "

Student upkeep inclusive

How should students go about it. I mean the payment of fees

Now that banks can now accept foreign currency as deposits, how can we source for foreign currency to fund our account.

Am I missing something?

bookface:


Yeah, true, we are.

I think the fair value of the Naira is probably around 310 dollars.

Smart Nigerians should invest money now in real assets - the dumbest thing anyone could do right now is letting his money rot away in a bank account somewhere.

Stagflation is coming, and it is coming big time.

What do you recommend investing in?

gottliebglobal:

That is the problem with armchair Economists. The laws of supply and demand should take its course, but no, Government wants to put their hands in everything and control the exchange rate. Now they have seen that the CBN cannot continue to prop up the Naira against other world currencies. Next stop, devaluation.
It is now not a question of whether to devalue or not, it is WHEN?
I project within 28 days. Watch out for $1= Naira 350

Apt!!!

Boss13:


CBN will sell dollars to genuine importers, especially if such goods are allowable into the country. We cannot fund importers to bring in tooth pick. Nigeria should not be a dumping ground

Any idea who manufactures toothpicks in Nigeria? Curios..

Onegai:


What do you recommend investing in?

Government bonds for one - If you can ask your broker about this. If you can get rates closer to 12 or 13 %, this should help you beat inflation which is currently at 9% by about 3% per annum.

Properties, is probably still a good idea, although i don't like this idea very much because they are illiquid investments and would not return as much value as the first option in this case. Nigerian properties at the moment are overvalued. The best rental yield you would probably get from your investment is about 3-5% even in prime areas like Lagos and Abuja. Which is well below inflation rate at 9% and well below government bond yields at 13%.

Finally, if you are into stocks, you could consider a buy and hold strategy - but with a very long term view. In the short term (about 2 to 3 years) stocks will probably underperform, if current economic situation worsens. However, in the longer term, you would probably make a lot of money from holding some stocks in your portfolio. You should stay away from oil and gas stocks such as the likes of Oando - stay away from banks with bad corporate governance (especially banks with large un-collateralized loans to the oil and gas industry) - you can buy company stocks like 7Up, Coca Cola, Maggi, Cement etc.

The best approach is holding each of this items in your portfolio, and having a diversified portfolio holding

In either case, there is nothing worse than simply holding cash in your bank account. You lose 9% of the value of that cash every year.

You should be careful though, there are enough scammers out there, talk to your broker if you have one, and ask about each of the items i have listed above

bookface:


Government bonds for one - If you can ask your broker about this. If you can get rates closer to 12 or 13 %, this should help you beat inflation which is currently at 9% by about 3% per annum.

Properties, is probably still a good idea, although i don't like this idea very much because they are illiquid investments and would not return as much value as the first option in this case. Nigerian properties at the moment are overvalued. The best rental yield you would probably get from your investment is about 3-5% even in prime areas like Lagos and Abuja. Which is well below inflation rate at 9% and well below government bond yields at 13%.

Finally, if you are into stocks, you could consider a buy and hold strategy - but with a very long term view. In the short term (about 2 to 3 years) stocks will probably underperform, if current economic situation worsens. However, in the longer term, you would probably make a lot of money from holding some stocks in your portfolio. You should stay away from oil and gas stocks such as the likes of Oando - stay away from banks with bad corporate governance (especially banks with large un-collateralized loans to the oil and gas industry) - you can buy company stocks like 7Up, Coca Cola, Maggi, Cement etc.

The best approach is holding each of this items in your portfolio, and having a diversified portfolio holding

In either case, there is nothing worse than simply holding cash in your bank account. You lose 9% of the value of that cash every year.

You should be careful though, there are enough scammers out there, talk to your broker if you have one, and ask about each of the items i have listed above

Insightful and well laid out..

buh this CBN governor is funny.. he thinks its better to give banks who after receiving hide the forex in order to control the country's economy?.. lol...let's c how long they think they can supply banks I trust gwadabe won't stay quite.....#autonomous ti take over # for now

miqos03:
banks can't do that again, they need to provide bvn documents of their buyers to the cbn in their statements

Will BVN tell a dollar dealer from an ordinary buyer?

destinychildolu:
And what happens when the Owner comes back for his or her money?

"There is no cash for now, come later".

bookface:

Government bonds for one - If you can ask your broker about this. If you can get rates closer to 12 or 13 %, this should help you beat inflation which is currently at 9% by about 3% per annum.
Properties, is probably still a good idea, although i don't like this idea very much because they are illiquid investments and would not return as much value as the first option in this case. Nigerian properties at the moment are overvalued. The best rental yield you would probably get from your investment is about 3-5% even in prime areas like Lagos and Abuja. Which is well below inflation rate at 9% and well below government bond yields at 13%.
Finally, if you are into stocks, you could consider a buy and hold strategy - but with a very long term view. In the short term (about 2 to 3 years) stocks will probably underperform, if current economic situation worsens. However, in the longer term, you would probably make a lot of money from holding some stocks in your portfolio. You should stay away from oil and gas stocks such as the likes of Oando - stay away from banks with bad corporate governance (especially banks with large un-collateralized loans to the oil and gas industry) - you can buy company stocks like 7Up, Coca Cola, Maggi, Cement etc.
The best approach is holding each of this items in your portfolio, and having a diversified portfolio holding
In either case, there is nothing worse than simply holding cash in your bank account. You lose 9% of the value of that cash every year.
You should be careful though, there are enough scammers out there, talk to your broker if you have one, and ask about each of the items i have listed above

Thanks for this advice. One surely needs these kind of wonderful opinions at this time.

Atlantian:
Hahahahaha, The Cattle rearers are on Experimentation. Who ever voted a cattle-rearer to Aso Rock should not expect anything more than cow dung.

yes just as you are spewing cow shit from your mouth!!!!

echelons:


It's better for some ppl to go out of business because they don't have valid documentation to enable them source forex directly from banks at interbank rates than a whole lot of Nigerians (including you) to lose the value of the hard earned money that we suffer to get in this country.
What is the minimum wage in Nigeria? 18k. Money that cannot even buy anything meaningful these days and that is what a lot of Nigerians manage to survive on. Now you want it devalued further? So that the 18k (and indeed all our salaries and incomes) to become mere tissue papers?
I'm sorry but I don't think you understand the impact of devaluation in an import based economy. The IMF, World Bank and some very powerful foreign and Nigerian investors are the one pushing for this devaluation because of the huge margins they'll make if the Naira is devalued now.
It's unfortunate that ordinary Nigerians who do not have anything to gain from devaluation (and in fact have all to lose) are the once buying this crap devaluation push.

You simply don't understand.

First - Companies going out of business is more harmful to the Nigerian economy than the Naira losing its value. Medium scale businesses are truly the main backbones of any economy. Think about what happens when a small company of 20 workers decides to close shop - if fires all its workers, who in turn get home and fire their own domestic workers. The result is a dramatic rise in unemployment rate and poverty.

Second - We cannot become an export oriented country overnight. Ignore the rubbish the media spews about diversification of the Nigerian economy. It's possible, but it won't happen for another decade or so. Currently our growth is mostly funded by crude sales, and productivity per worker is incredibly low. If we have the technical know how to substitute imports at a technological advantage over countries where we imported them from, we will already be doing so. Think about it this way, we can probably manufacture toothpicks in Nigeria, but if it cost 120 Naira to import toothpicks and 200 Naira to manufacture, then it is more efficient to import. In economics, its called comparative advantage.

Third - Most Nigerians can't get their forex needs at the official rate of 200 Naira , so most people get their forex at the black market rate of 270 dollars. It doesn't make any difference to the average Nigerian if the central bank devalues the naira to 270 or not. The only people benefiting from the central bank's policy are the rich and wealthy. The likes of Dangote can probably access their forex needs directly from the central bank at 200 naira, whereas the average Nigerian can only do so at the black market rate of 270. This is like taking from the poor and giving to the rich. The central bank is effectively subsidizing the big and rich companies at the expense of the middle tier and small scale companies.
The foreign exchange reserve is the property of ALL Nigerians and not just big companies alone.

Fourth - Devaluation is not the central bank's choice. Nigeria does not mint dollars, and our foreign exchange reserves is not unlimited. Foreign portfolio flows which tends to act as an alternative source to foreign income from exports has since dried up - especially since last September when JP Morgan removed Nigeria from the Emerging Markets index due to the CBN's policy. At some point, we will have very little dollars left to conduct foreign transactions and will have no choice but to devalue the Naira. It is not a matter of IF but when it happens.


Of course, there is pain in devaluing the Nigerian Naira, no doubt, but if Emefiele had done this several months ago, the impact of the oil price drop would not be so exacerbated. Additionally, the impact would have been that our foreign reserve is preserved.

You mentioned that the IMF, the World bank and some foreign investors are the biggest beneficiaries of devaluation - this is simply not true. The biggest beneficiary is the Federal government of Nigeria. The federal government earns the bulk of its revenue in dollars and pays the bulk of its expenses in Naira. In the scenario where Naira is devalued to 300 relative to dollars for instance, ordinary Nigerians would feel the pain, but the government could have mitigated against that by creating more jobs, boosting infrastructure spending, etc. simply because the government revenue is higher in real terms.

The world bank and the IMF by contrast are not profit making bodies. They exist to prevent systemic collapse of the economy. The IMF knows that Nigeria would have to resort to borrowing from it if things get really bad - as a creditor of last resort, the IMF exist to ensure that things don't get really bad. In the 1970s, when the british economy was going through big problems due to persistent inflation and a hike in oil prices, the IMF prescribed a similar dose. This is not a conspiracy stuff by some International organisations to destroy Nigeria.

Guk:
Oh really Only BDCs to blame?? No blame to CBN Gov who kept the FOREX vault open for GEJ and friends to use bulldozers and cranes to pack our $$$$.

The CBN Gov is shameless. He should have fallen on his sword since!!!

what a childish thinking, ppl are looking for ways n means to address problem at hands u r looking for blames. blame culture, u r just like ur father PMB who keeps blaming and blaming pst gvrments for over 9mths now and is yet to find a single solution or even do sth significant since he entered into seat. blames don't solve problem my frnd, solutions do.