LordAdam16:
In recent days, I've heard lots of predictions about the USD/NGN exchange rate.

Some overzealous believers say it's going down to N200/$1. Some more conservative estimates put it at N350/$1. Others just say less than N400/$1.

The fact is that the rate will hover between N450 and N500 in the short term, pending any drastic action like what happened last week.

The CBN has made it ultimately clear that they would regularly intervene in the market to protect the Naira. Last week's reaction was one of such interventions and highly expected. The government wouldn't let the difference between the parallel and official rate to be more than N200/$1. That is a monetary disaster.

But here's the other fact. There is ABSOLUTELY NOTHING the government can do now to harmonize the exchange rates without severe rattling of the economy.

Nigeria is already selling 2.1m barrels of oil a day (almost close to 2.2m barrels high in 2013). The oil price will not cross the $50-$60 band anytime soon. It means Nigeria is making the most money it can make from our single largest foreign earner (which is why our reserves have been rising) at the moment.

The CBN has been plunging money into the market since the managed float started to the tune of several hundreds of millions of dollars weekly (last week it was over $400m, this week it's already over $100m). There is a limit to which they can go.

And that is why the 41 prohibited list still exists, and Nigerian bank cards (aside GTB and Access) cannot do USD transactions.

Last week, the CBN liberalized accessing Forex for students, travelers, and those in need of medical attention. It is a very welcome policy. These groups of FX buyers have been unfairly targeted by the CBN since Buhari stepped on the brakes. But according to even the most generous estimates, these people only account for 20% of the Forex demand. Meaning the black market still caters to a majority of the Forex demand.

Even travelers at the Airports would not get dollars, unless they apply weeks in advance via their banks. This is because no bank in this recession will open FX outlets in airports, despite the instruction from CBN to do so. The major reason is that it's a short term measure that also hurts their bottom line.

For the parallel market rate to fall permanently, the CBN has to liberalize the FX market completely. The prohibited import list has to be redacted and no one should be barred from buying dollars at the official rate (whether he/she is a student or a blogger buying web hosting on NameCheap with a Naira card).

While the naira will become more valuable at the parallel market (from 450+ to 400 or less), it will lose value at the official market (from <315 to between 350 and 400) in the medium term. But the basic idea is that the difference between the official and parallel market rates will be less than 50 naira. And probably go back to 2012 levels of less than 10 naira. Basically, the divergence will no longer be business-worthy for speculators.

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

Speculators are business men who make their living off plummeting currencies. They are like undertakers who make their living off dead people. If no body dies, the undertaker goes out of business. If an economy strengthens and the currency follows suit, speculators move on to another currency).

Saying speculators are unpatriotic and enemies of Nigeria is VERY SILLY. If the government didn't create the environment for them to thrive, they wouldn't thrive. Leave a bread for days and fungi would grow on it. You can't say the fungi are unpatriotic. Their only patriotism is to their survival.

I expect the parallel market rate to climb albeit slowly in the coming weeks to 470. N500/$1 seems like a stretch now and I expect the CBN to make another intervention if the rate crosses that resistance point again.

Until the Naira is fully floated, the speculators are going no where and the illusion of a N400 or less exchange rate in the parallel market will remain a pipe dream.

-Lord

onatisi:

This is simple common sense but nigerains are just too stupid and foolish not to be able to think and see through all these politicians gimmicks. Now the dollar looting is gradually coming to a close,530 million dollars has been released within the last 7days , the politicians and apc members have nlw changed all their looted naira into dollars at cheap prices . Now the dollars rise can start and Nigerians start crying again. Every sensible intelligent human being on this knew osinbajo policy defy every economic sense and wouldn't last. Then why did he do it ?

emmabest2000:


You never see anything ...

Next step will be skyrocket to 600 and then appreciate to 550 before jumping to 700

Confused GOVERNMENT..

martineverest:
how come this news is not on punch,thisday,thenation and other media websites xcept this particular blogger?

LordAdam16:
In recent days, I've heard lots of predictions about the USD/NGN exchange rate.

Some overzealous believers say it's going down to N200/$1. Some more conservative estimates put it at N350/$1. Others just say less than N400/$1.

The fact is that the rate will hover between N450 and N500 in the short term, pending any drastic action like what happened last week.

The CBN has made it ultimately clear that they would regularly intervene in the market to protect the Naira. Last week's reaction was one of such interventions and highly expected. The government wouldn't let the difference between the parallel and official rate to be more than N200/$1. That is a monetary disaster.

But here's the other fact. There is ABSOLUTELY NOTHING the government can do now to harmonize the exchange rates without severe rattling of the economy.

Nigeria is already selling 2.1m barrels of oil a day (almost close to 2.2m barrels high in 2013). The oil price will not cross the $50-$60 band anytime soon. It means Nigeria is making the most money it can make from our single largest foreign earner (which is why our reserves have been rising) at the moment.

The CBN has been plunging money into the market since the managed float started to the tune of several hundreds of millions of dollars weekly (last week it was over $400m, this week it's already over $100m). There is a limit to which they can go.

And that is why the 41 prohibited list still exists, and Nigerian bank cards (aside GTB and Access) cannot do USD transactions.

Last week, the CBN liberalized accessing Forex for students, travelers, and those in need of medical attention. It is a very welcome policy. These groups of FX buyers have been unfairly targeted by the CBN since Buhari stepped on the brakes. But according to even the most generous estimates, these people only account for 20% of the Forex demand. Meaning the black market still caters to a majority of the Forex demand.

Even travelers at the Airports would not get dollars, unless they apply weeks in advance via their banks. This is because no bank in this recession will open FX outlets in airports, despite the instruction from CBN to do so. The major reason is that it's a short term measure that also hurts their bottom line.

For the parallel market rate to fall permanently, the CBN has to liberalize the FX market completely. The prohibited import list has to be redacted and no one should be barred from buying dollars at the official rate (whether he/she is a student or a blogger buying web hosting on NameCheap with a Naira card).

While the naira will become more valuable at the parallel market (from 450+ to 400 or less), it will lose value at the official market (from <315 to between 350 and 400) in the medium term. But the basic idea is that the difference between the official and parallel market rates will be less than 50 naira. And probably go back to 2012 levels of less than 10 naira. Basically, the divergence will no longer be business-worthy for speculators.

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

Speculators are business men who make their living off plummeting currencies. They are like undertakers who make their living off dead people. If no body dies, the undertaker goes out of business. If an economy strengthens and the currency follows suit, speculators move on to another currency).

Saying speculators are unpatriotic and enemies of Nigeria is VERY SILLY. If the government didn't create the environment for them to thrive, they wouldn't thrive. Leave a bread for days and fungi would grow on it. You can't say the fungi are unpatriotic. Their only patriotism is to their survival.

I expect the parallel market rate to climb albeit slowly in the coming weeks to 470. N500/$1 seems like a stretch now and I expect the CBN to make another intervention if the rate crosses that resistance point again.

Until the Naira is fully floated, the speculators are going no where and the illusion of a N400 or less exchange rate in the parallel market will remain a pipe dream.

-Lord

martineverest:
its a fake new by the blogger...no other news agent is carrying this news

LordAdam16:
In recent days, I've heard lots of predictions about the USD/NGN exchange rate.

Some overzealous believers say it's going down to N200/$1. Some more conservative estimates put it at N350/$1. Others just say less than N400/$1.

The fact is that the rate will hover between N450 and N500 in the short term, pending any drastic action like what happened last week.

The CBN has made it ultimately clear that they would regularly intervene in the market to protect the Naira. Last week's reaction was one of such interventions and highly expected. The government wouldn't let the difference between the parallel and official rate to be more than N200/$1. That is a monetary disaster.

But here's the other fact. There is ABSOLUTELY NOTHING the government can do now to harmonize the exchange rates without severe rattling of the economy.

Nigeria is already selling 2.1m barrels of oil a day (almost close to 2.2m barrels high in 2013). The oil price will not cross the $50-$60 band anytime soon. It means Nigeria is making the most money it can make from our single largest foreign earner (which is why our reserves have been rising) at the moment.

The CBN has been plunging money into the market since the managed float started to the tune of several hundreds of millions of dollars weekly (last week it was over $400m, this week it's already over $100m). There is a limit to which they can go.

And that is why the 41 prohibited list still exists, and Nigerian bank cards (aside GTB and Access) cannot do USD transactions.

Last week, the CBN liberalized accessing Forex for students, travelers, and those in need of medical attention. It is a very welcome policy. These groups of FX buyers have been unfairly targeted by the CBN since Buhari stepped on the brakes. But according to even the most generous estimates, these people only account for 20% of the Forex demand. Meaning the black market still caters to a majority of the Forex demand.

Even travelers at the Airports would not get dollars, unless they apply weeks in advance via their banks. This is because no bank in this recession will open FX outlets in airports, despite the instruction from CBN to do so. The major reason is that it's a short term measure that also hurts their bottom line.

For the parallel market rate to fall permanently, the CBN has to liberalize the FX market completely. The prohibited import list has to be redacted and no one should be barred from buying dollars at the official rate (whether he/she is a student or a blogger buying web hosting on NameCheap with a Naira card).

While the naira will become more valuable at the parallel market (from 450+ to 400 or less), it will lose value at the official market (from <315 to between 350 and 400) in the medium term. But the basic idea is that the difference between the official and parallel market rates will be less than 50 naira. And probably go back to 2012 levels of less than 10 naira. Basically, the divergence will no longer be business-worthy for speculators.

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

Speculators are business men who make their living off plummeting currencies. They are like undertakers who make their living off dead people. If no body dies, the undertaker goes out of business. If an economy strengthens and the currency follows suit, speculators move on to another currency).

Saying speculators are unpatriotic and enemies of Nigeria is VERY SILLY. If the government didn't create the environment for them to thrive, they wouldn't thrive. Leave a bread for days and fungi would grow on it. You can't say the fungi are unpatriotic. Their only patriotism is to their survival.

I expect the parallel market rate to climb albeit slowly in the coming weeks to 470. N500/$1 seems like a stretch now and I expect the CBN to make another intervention if the rate crosses that resistance point again.

Until the Naira is fully floated, the speculators are going no where and the illusion of a N400 or less exchange rate in the parallel market will remain a pipe dream.

-Lord

musicwriter:
The exchange rate was already getting better. Suddenly, some people got worried Osinbajo would outshine the master. I guess that's why they want it to go up again.

You can see why Charlie Boy said we're ruled by "a very wicked ruling class", so wicked they'll actually like this just to spite Osinbajo.

musicwriter:
The exchange rate was already getting better. Suddenly, some people got worried Osinbajo would outshine the master. I guess that's why they want it to go up again.

You can see why Charlie Boy said we're ruled by "a very wicked ruling class", so wicked they'll actually like this just to spite Osinbajo.

REIIGN:
And our president is busy lying "hale and hearty" in a London hospital. Wasting tax payers money treating an illness which he brought upon himself.

naija1stpikin:
i knew the magic was not going to work for long. We need long term solutions not all this short term things

LordAdam16:
In recent days, I've heard lots of predictions about the USD/NGN exchange rate.

Some overzealous believers say it's going down to N200/$1. Some more conservative estimates put it at N350/$1. Others just say less than N400/$1.

The fact is that the rate will hover between N450 and N500 in the short term, pending any drastic action like what happened last week.

The CBN has made it ultimately clear that they would regularly intervene in the market to protect the Naira. Last week's reaction was one of such interventions and highly expected. The government wouldn't let the difference between the parallel and official rate to be more than N200/$1. That is a monetary disaster.

But here's the other fact. There is ABSOLUTELY NOTHING the government can do now to harmonize the exchange rates without severe rattling of the economy.

Nigeria is already selling 2.1m barrels of oil a day (almost close to 2.2m barrels high in 2013). The oil price will not cross the $50-$60 band anytime soon. It means Nigeria is making the most money it can make from our single largest foreign earner (which is why our reserves have been rising) at the moment.

The CBN has been plunging money into the market since the managed float started to the tune of several hundreds of millions of dollars weekly (last week it was over $400m, this week it's already over $100m). There is a limit to which they can go.

And that is why the 41 prohibited list still exists, and Nigerian bank cards (aside GTB and Access) cannot do USD transactions.

Last week, the CBN liberalized accessing Forex for students, travelers, and those in need of medical attention. It is a very welcome policy. These groups of FX buyers have been unfairly targeted by the CBN since Buhari stepped on the brakes. But according to even the most generous estimates, these people only account for 20% of the Forex demand. Meaning the black market still caters to a majority of the Forex demand.

Even travelers at the Airports would not get dollars, unless they apply weeks in advance via their banks. This is because no bank in this recession will open FX outlets in airports, despite the instruction from CBN to do so. The major reason is that it's a short term measure that also hurts their bottom line.

For the parallel market rate to fall permanently, the CBN has to liberalize the FX market completely. The prohibited import list has to be redacted and no one should be barred from buying dollars at the official rate (whether he/she is a student or a blogger buying web hosting on NameCheap with a Naira card).

While the naira will become more valuable at the parallel market (from 450+ to 400 or less), it will lose value at the official market (from <315 to between 350 and 400) in the medium term. But the basic idea is that the difference between the official and parallel market rates will be less than 50 naira. And probably go back to 2012 levels of less than 10 naira. Basically, the divergence will no longer be business-worthy for speculators.

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

Speculators are business men who make their living off plummeting currencies. They are like undertakers who make their living off dead people. If no body dies, the undertaker goes out of business. If an economy strengthens and the currency follows suit, speculators move on to another currency).

Saying speculators are unpatriotic and enemies of Nigeria is VERY SILLY. If the government didn't create the environment for them to thrive, they wouldn't thrive. Leave a bread for days and fungi would grow on it. You can't say the fungi are unpatriotic. Their only patriotism is to their survival.

I expect the parallel market rate to climb albeit slowly in the coming weeks to 470. N500/$1 seems like a stretch now and I expect the CBN to make another intervention if the rate crosses that resistance point again.

Until the Naira is fully floated, the speculators are going no where and the illusion of a N400 or less exchange rate in the parallel market will remain a pipe dream.

-Lord

LordAdam16:
In recent days, I've heard lots of predictions about the USD/NGN exchange rate.

Some overzealous believers say it's going down to N200/$1. Some more conservative estimates put it at N350/$1. Others just say less than N400/$1.

The fact is that the rate will hover between N450 and N500 in the short term, pending any drastic action like what happened last week.

The CBN has made it ultimately clear that they would regularly intervene in the market to protect the Naira. Last week's reaction was one of such interventions and highly expected. The government wouldn't let the difference between the parallel and official rate to be more than N200/$1. That is a monetary disaster.

But here's the other fact. There is ABSOLUTELY NOTHING the government can do now to harmonize the exchange rates without severe rattling of the economy.

Nigeria is already selling 2.1m barrels of oil a day (almost close to 2.2m barrels high in 2013). The oil price will not cross the $50-$60 band anytime soon. It means Nigeria is making the most money it can make from our single largest foreign earner (which is why our reserves have been rising) at the moment.

The CBN has been plunging money into the market since the managed float started to the tune of several hundreds of millions of dollars weekly (last week it was over $400m, this week it's already over $100m). There is a limit to which they can go.

And that is why the 41 prohibited list still exists, and Nigerian bank cards (aside GTB and Access) cannot do USD transactions.

Last week, the CBN liberalized accessing Forex for students, travelers, and those in need of medical attention. It is a very welcome policy. These groups of FX buyers have been unfairly targeted by the CBN since Buhari stepped on the brakes. But according to even the most generous estimates, these people only account for 20% of the Forex demand. Meaning the black market still caters to a majority of the Forex demand.

Even travelers at the Airports would not get dollars, unless they apply weeks in advance via their banks. This is because no bank in this recession will open FX outlets in airports, despite the instruction from CBN to do so. The major reason is that it's a short term measure that also hurts their bottom line.

For the parallel market rate to fall permanently, the CBN has to liberalize the FX market completely. The prohibited import list has to be redacted and no one should be barred from buying dollars at the official rate (whether he/she is a student or a blogger buying web hosting on NameCheap with a Naira card).

While the naira will become more valuable at the parallel market (from 450+ to 400 or less), it will lose value at the official market (from <315 to between 350 and 400) in the medium term. But the basic idea is that the difference between the official and parallel market rates will be less than 50 naira. And probably go back to 2012 levels of less than 10 naira. Basically, the divergence will no longer be business-worthy for speculators.

Unfortunately, the FG and CBN do not want to do this currently for obvious reasons. For example, we do not even have a fiscal economic plan at the moment. Osinbajo, the minister of budget and planning, and Adeosun have been assembling it for more than 12 months now, and they're yet to unwrap it. Also, our FDI levels are not that encouraging. We are also in a biting recession and it appears the economy is finally recovering (so there's good reason to hold back). Then there's the issue of price of fuel which will inevitably rise to N200+ (no one wants the blow back this would lead to).

Speculators are business men who make their living off plummeting currencies. They are like undertakers who make their living off dead people. If no body dies, the undertaker goes out of business. If an economy strengthens and the currency follows suit, speculators move on to another currency).

Saying speculators are unpatriotic and enemies of Nigeria is VERY SILLY. If the government didn't create the environment for them to thrive, they wouldn't thrive. Leave a bread for days and fungi would grow on it. You can't say the fungi are unpatriotic. Their only patriotism is to their survival.

I expect the parallel market rate to climb albeit slowly in the coming weeks to 470. N500/$1 seems like a stretch now and I expect the CBN to make another intervention if the rate crosses that resistance point again.

Until the Naira is fully floated, the speculators are going no where and the illusion of a N400 or less exchange rate in the parallel market will remain a pipe dream.

-Lord

malton:


There was no magic in the first place. You guys blew things out of proportion. Speculation, coupled with the injection of some dollar sum by the cbn was what led to the rise in the value of the naira.

But that cannot sustain long term, as you rightly pointed out.

naija1stpikin:


thats the magic which is not sustainable. How long are the going to inject dollar into the market for? So it's always going to be back to zero which is not what we need

JustCalMeDBoss:
For how long can the government continue to pump dollar into the economy.

HAH:
the truth is they can pump dollar into the economy as long as we sell our oil in dollars, how? We use naira locally not dollars to pay salaries and works, so that dollar earned is what will be converted to naira to be used for the salaries and work, so all they will do is give whatever naira needed equivalent in dollars to banks and get naira inexchange then use it forinternal use

naija1stpikin:

is it sustainable?

TPAND:


Long write up that looks nice but your analysis my friend will do us no go. You can't float any currency in a non-industrialized economy. Full flotation of the naira is not the way my brother

HAH:
as at today due to relative peace in the ND, we export 2.1million barrels in a day and oil sells for averagely $55 per barrel, that means $115M is made daily, now deduct JV of about 40%, tha means Nigeria earns about $70m daily therefore we make about $420m weekly from oil, if I were the government I will pump $200M into the economy and live $220 int the reserves

So my brother your worry should be political will, but not sustainability cos is very sustainable as long as oil is relatively high and there is peace in the land

HAH:
as at today due to relative peace in the ND, we export 2.1million barrels in a day and oil sells for averagely $55 per barrel, that means $115M is made daily, now deduct JV of about 40%, tha means Nigeria earns about $70m daily therefore we make about $420m weekly from oil, if I were the government I will pump $200M into the economy and live $220 int the reserves

So my brother your worry should be political will, but not sustainability cos is very sustainable as long as oil is relatively high and there is peace in the land

jjman2322:


Wrong calculation.. you know oil has a cost of drilling.. we dont earn $55 a barrel.. you have to remove the cost of drilling the oil, which i believe is over $20 a barrel..

maclatunji:


Your post will impress ignorant people. Do not think you are making sense with it. Ignorant people dominate the world.

HAH:
obviously you did not read my write up well I gave 40% to JV the JV partners borne t cost of production that is why they take almost 40% o production returns, so cost of production . Adequately been taken care of

naija1stpikin:


thanks for the explanation. Hopefully, the peace in SS will remain