Dbboy:
Ok. When buhari should have devalued all this while he was busy chasing GEJ and look at the repercusion, clueless administration.

erayo2GCA:
What happened to making 1usd = 1naira... we have been scam..zzzzombie over to you...

jtjohn:
you should be the one to go back to school.......

SirAweezy:


There was $26billion in the foreign reserve to play around with according to CBN

TheGoodJoe:


“It’s our estimate” that the bulk of the backlog of orders has been met, Okorafor said by phone from Abuja, the capital. “We’re very optimistic that liquidity in the FX market will improve. Whether we decide to intervene again depends on the dynamics.”

The currency of Africa’s biggest economy strengthened 0.4 percent to 281.5 per dollar by 6:33 p.m. in Lagos, the commercial capital, after declining as much as 1.4 percent earlier to a record 286.5. A currency peg of 197-199 had been in place since March 2015.

The bolded is the most important point.

Due to the floating of the currency, demand and Supply for Dollars determine the price. At the moment, Dollars is scarce and the demand is high. This caused the dollar price compared to the naira to go down. CBN intervened by making dollars available. CBN sold dollars and drove the price of the naira compared to the dollars down.

CBN believes with time, Dollars will be available and they will not have to sell dollars from our reserves to keep the price of the naira low.

TheGoodJoe:



Definitely. Investors are also coming in. The Stock Market is going up. This is due to Foreign investment coming in. The Floating Policy means a more stable market for Foreign investors.

This will also bring in more dollars into the system.

TheGoodJoe:


Exactly but it is not available now. The money is still circulating. If you buy now, you will get at the Black Market rates. When the dollars CBN is selling circulates, you will get the dollars at a cheaper rate like with your cards and bank transfers etc.

The Banks are buying to sell.

Oklander:
Hopefully, it will stabilize at a reasonable rate. This is what you get when you have clueless and merciless looters running a country for years. They made no single plan for possible situations like this in which the price of oil would fall so low with enormous effect on the exchange rate. What befuddle most is the brainless display of some youths here who blame this entirely on the present government even after a minister during the last government talked about the coming hard times and yet the minister and her pay master did nothing to avert it but rather loot and share money in dollar bundles in a bid to retain power. Smh ...Thunder go fire people!

utytill:
Good,why can they not be selling it at cheaper rate so that the blacket market value be affordable at least at 210 naira,also can our foreign students access dollar to pay fees and at what rate?

NePro:
Abeg the economist here should come and explain this for us.. All this saying,,how much person fit buy dollar for mallam people hand ?? Or how much dem dey sell for airport..all this interbank cbn rate don tire me

utytill:
A government that lost control of her currency and price of petroleum products leaving them to market forces to determine is a failure.I see people hoarding dollars waiting for the confused CBN to finish with what they have,the hoarders will then determine the real value of naira.My question is when and where did CBN sees dollars to intervened because they told us that there was no dollar.

TheGoodJoe:


“It’s our estimate” that the bulk of the backlog of orders has been met, Okorafor said by phone from Abuja, the capital. “We’re very optimistic that liquidity in the FX market will improve. Whether we decide to intervene again depends on the dynamics.”

The currency of Africa’s biggest economy strengthened 0.4 percent to 281.5 per dollar by 6:33 p.m. in Lagos, the commercial capital, after declining as much as 1.4 percent earlier to a record 286.5. A currency peg of 197-199 had been in place since March 2015.

The bolded is the most important point.

Due to the floating of the currency, demand and Supply for Dollars determine the price. At the moment, Dollars is scarce and the demand is high. This caused the dollar price compared to the naira to go down. CBN intervened by making dollars available. CBN sold dollars and drove the price of the naira compared to the dollars down.

CBN believes with time, Dollars will be available and they will not have to sell dollars from our reserves to keep the price of the naira low.

InvertedHammer:
It is an open season.DXY (US dollar index) has been trending down and that's why naira and most currencies appreciated against the dollar. Otherwise, the amount CBN used in intervention is inconsequential in the scheme of things. If the down trend in DXY continues, naira will appreciate as well. It has nothing to do with the magical wand of Emefiele or PMB. It is the market forces at play.
\

sexxydiva:
why?

TheGoodJoe:



CBN believes with time, Dollars will be available and they will not have to sell dollars from our reserves to keep the price of the naira low[/color].

trillville:


You are not entirely correct. Emefiele waited for the US economy to show real weakness (last month's jobs report) before he started implementing this policy.

The CBN timed it's action perfectly.

Oklander:
What is this one saying?!!!

Rhesusmonkey:
for how long will the cbn keep intervening

Harwoyeez:
interbank rate is the rate at which banks trade BTW each other which according to the report fell from 286 to 281. However,this is not the rate on the black market or mallams rate. Due to liquidity problem,CBN intervened by providing liquidity in the market which helps to bring d fx rate down to 281 because dollar inflow in the d country is scarce or low. In the long run when inflow increases due to investors coming back or export increasing or crude oil price increase and even remittances from Nigerians abroad, CBN may not need to intervene again because there won't be liquid problem of dollars again.

makapoda:
I love your explanation

Penisinpenisout:


So where will they be getting this $$$$$$ from? I mean if we are no longer touching our reserves?

grandstar:


My worry is how free is the market? For instance, what is the rate for collecting Western Union or Moneygramm.?

Also, are exporters such as oil companies allowed to sell to the BDC's? The sale of forex to the BDC's should also resume as that will break the monopoly the banks presently have over forex. This worked before making the disparity between the official and black market rate insignificant. That will be the true measure of this "float" is working.

TheGoodJoe:


Very good point. That is not clarified. The Banks are also doing this to make money and there are a lot of demands from importers. These importers buy in large quantities and they will be first to get their hands on the dollars.

Especially, our beer people who spend a lot on importation.

It will take time. I do not know how long.

eph12:

Good. The investors will need electricity to maximize profit. That should be a priority.

Cavenchy:


[Based on your post - In blue Italics] Laws of Demand and Supply. Where does high demand of a scarce commodity result in lower price? (or price of the rare commodity coming down?). I think what you mean to say is that the scarcity of dollars in Nigerian reserves and in-circulation drove the price/cost/value of the dollar UP when compared/exchanged/sought-after with naira, and the CBN selling dollars increased supply(reducing demand) of the initially rare currency($), thereby driving the price/cost of obtaining-dollars(dollar value in relation to naira) down.

TheGoodJoe:



It would not be too long because the Black Market dealers are watching the market. As Dollars get available at the banks, the Black Market dealers will lose money.

So the Black Market dealers will drop their price soon.

That is what the Policy is about. Supply and Demand. The Dollars is circulating and price will fall.

If any have dollars, it is best to sell. Even if the Price goes up when CBN stops intervening, it will not take long for the price to go down.