Brother if you were given an opportunity at the now based on what is on ground; what would you do differently considering the fact you can't stop people not to send their kids abroad, medicals, luxurious items etc I'm open to learning from you.
Luxury items as you clearly stated are for THOSE WHO CAN AFFORD THEM!!!! If you can afford them, by all means go for them AT YOUR OWN EXPENSE!!! That shouldn't be the government's priority in an ailing economy, our priority is to see an economic rebound which can only be achieved by chanelling our limited stock of dollars to those areas of the economy, (infrastructure, agriculture and mass production) that are most sensitive to long term development. I agree it's gonna take some time with some price to pay, but its going to be a bold step in the right direction. And we haven't seen any of that yet in the present government. Remember selling dollars to select importers who inturn sell back to the parallel market lead to this precipitous decline. Importers who need the dollars for importing capital goods should not have them physically, the government should only act as their payment agents through a stable and transparent process
Am telling you. Why not reduce the rate to 10 percent since the parallel market is catching up already with bank selling price. Even the article said BDC are willing to buy @ N370 from speculators which is N5 below the approved N375 selling price @ banks.
Another thing that drew my attention on the article is BDC are willing to buy but don't want to sell in order not to incur further loss. The question is where do they get the liquid to purchase these dollars except if they are into big business sha probably through commodity trading.
To be honest, if these dollars used in defending naira are used for infrastructural development such as power, road, housing and water projects, the country will attain it's projection in a short run but with this current CBN intervention, it's going to take a very long time as development will be slowed down.
Money used for currency intervention is not spent but exchanged, the naira equivalent is still with the CBN for other purposes you mentioned.
HAH: Is time for CBN to converge all rates in same place an equilibrium price should determined this is because the parallel market rate of 380 is almost the rate at which bank sell PTA which 375 and the CBN should reduce the spread between interbank and selling rate by banks the present 20% is very high infact the highest in the world at best it should be 5% just imagine the CBN give them dollars at 315 and they sell at 375, now if parallel market will sell at 375 too no one will go to bank bank buy because there is limit, trail or much documentation unless the banks drop their rate too thereby competing with the BDC for customers which will lead to drop in price, during the soludo and even sanusi era spread by BDC are hardly 5% sometimes just 2%.
Those saying we should float the naira should have a rethink, most nations defend their currency, floating your currency is like opening up the borders of your country no customs, no immigration, no visa, no duty everyone and everything enters at will. Assuming Nigeria is a major multi product exporting country floating may be ok, but as it is our major export is oil which is very volatile, believe me if we float speculators will run this country down dollar will be N1000 in no time.
@$50 per barrel Nigeria earn about $110M daily let's say 40% goes to the JV that means we will be left with $66m daily, I recommend a 50-50 approach between reserve and injection into the economy that means every week about $220M will be injected and $220M will be saved in the reserves. I believe the present intervention by CBN is necessary and very sustainable if there is the political will.
48% of Nigeria's oil earnings go to the joint venture partners.
LuckyLadolce: heheheheh, not until you call yourself a forex trader before I will be able to identify you as one.. we know guys like.
[color=#006600]You need to get an education, enough of this shameful act of displaying crass ignorance on such a respectable forum. I keep exposing your ignorance and foolishness even after making baseless allegations, but i feel you bask in the euphoria of getting replies from me!! This will be the last one
okosodo: All i can say as a forex trader is that when this government gets tired of using the money gained from making nigerians suffer, then the dollar will still overrun the naira. Liquidity is unchanged , still at 85%.
okosodo: All i can say as a forex trader is that when this government gets tired of using the money gained from making nigerians suffer, then the dollar will still overrun the naira. Liquidity is unchanged , still at 85%.
How can they get tired?
It's not like they are giving it away free. Naira receipts are used to pay domestic debts and reflate the economy. That is not going to change.
hobermener: The smart ones will increase their stock of dollars, i repeat, the smart ones will increase their stock of dollars!!!! Funelling millions of dollars into the forex maket on a daily basis, is a stupid short term solution to a longer term problem, which i assume is just a calculated move to score cheap political points.the price of Oil, the major foreign exchange earner is still very low, with opec struggling to stick with its production quota, any sensible human will evisage a further drop in oil prices, as the world moves to cleaner energy, and opec member nations continue to ignore the organizations agreements. Though slow, a long term policy of import substitution and agressive exportation through economic diversification would ultimately lead to a precipitous decline in the dollar price, but what do we have, a government still spending billions on oil prospecting, foreign direct investment at an all time low, and one of the worst economic contraction in recent times, yet some fools still cheer this fire brigade method of pumping dollars into the market for school fee payments and tourism, things that only end up driving exports higher, further complicating balance of payment problems. Producers who need forex the most do not get them, these people are supposed to be top priority, expecially the agricultural sector and the mining sector, agressive importation of producer goods is the top priority of any country that seeks to curb foreign exchange problems in the long run, these producers should have government acting as payment agents(in dollars) after these purchases have been verified by the cbn, while these producers pay in naira at subsidized rates, but what do we have, a government subsidizing payments for pilgrimage and other bullshït of little to no economic significance. Call me a pessimist, that's your opinion, buth when the inevitable consequence of this stupid move raises its ugly head, there will be no one to save the naira!!!!!
nonsense ....let Dangote refinary come on board... All these ur analysis will fail u
hobermener: [color=#006600]You need to get an education, enough of this shameful act of displaying crass ignorance on such a respectable forum. I keep exposing your ignorance and foolishness even after making baseless allegations, but i feel you bask in the euphoria of getting replies from me!! This will be the last one
why quoting just part of my comments this time and not all, well that's just by the way. people like you find it painful when you're being criticized but you find pleasure in criticizing a government that's trying to fix the bullshit the previous governments put us into. Go get a life bro. I don't have your time either. Nairaland champion
HAH: Is time for CBN to converge all rates in same place an equilibrium price should determined this is because the parallel market rate of 380 is almost the rate at which bank sell PTA which 375 and the CBN should reduce the spread between interbank and selling rate by banks the present 20% is very high infact the highest in the world at best it should be 5% just imagine the CBN give them dollars at 315 and they sell at 375, now if parallel market will sell at 375 too no one will go to bank bank buy because there is limit, trail or much documentation unless the banks drop their rate too thereby competing with the BDC for customers which will lead to drop in price, during the soludo and even sanusi era spread by BDC are hardly 5% sometimes just 2%. Good analysis but the JVs don't get anything near 40%. There are petroleum tax, NDDC and other charges. They get around 15% to cover cost of operation/profit.
Those saying we should float the naira should have a rethink, most nations defend their currency, floating your currency is like opening up the borders of your country no customs, no immigration, no visa, no duty everyone and everything enters at will. Assuming Nigeria is a major multi product exporting country floating may be ok, but as it is our major export is oil which is very volatile, believe me if we float speculators will run this country down dollar will be N1000 in no time.
@$50 per barrel Nigeria earn about $110M daily let's say 40% goes to the JV that means we will be left with $66m daily, I recommend a 50-50 approach between reserve and injection into the economy that means every week about $220M will be injected and $220M will be saved in the reserves. I believe the present intervention by CBN is necessary and very sustainable if there is the political will.
hobermener: The smart ones will increase their stock of dollars, i repeat, the smart ones will increase their stock of dollars!!!! Funelling millions of dollars into the forex maket on a daily basis, is a stupid short term solution to a longer term problem, which i assume is just a calculated move to score cheap political points.the price of Oil, the major foreign exchange earner is still very low, with opec struggling to stick with its production quota, any sensible human will evisage a further drop in oil prices, as the world moves to cleaner energy, and opec member nations continue to ignore the organizations agreements. Though slow, a long term policy of import substitution and agressive exportation through economic diversification would ultimately lead to a precipitous decline in the dollar price, but what do we have, a government still spending billions on oil prospecting, foreign direct investment at an all time low, and one of the worst economic contraction in recent times, yet some fools still cheer this fire brigade method of pumping dollars into the market for school fee payments and tourism, things that only end up driving exports higher, further complicating balance of payment problems. Producers who need forex the most do not get them, these people are supposed to be top priority, expecially the agricultural sector and the mining sector, agressive importation of producer goods is the top priority of any country that seeks to curb foreign exchange problems in the long run, these producers should have government acting as payment agents(in dollars) after these purchases have been verified by the cbn, while these producers pay in naira at subsidized rates, but what do we have, a government subsidizing payments for pilgrimage and other bullshït of little to no economic significance. Call me a pessimist, that's your opinion, buth when the inevitable consequence of this stupid move raises its ugly head, there will be no one to save the naira!!!!!
nice post.
But what do you say about this mans post
s time for CBN to converge all rates in same place an equilibrium price should determined this is because the parallel market rate of 380 is almost the rate at which bank sell PTA which 375 and the CBN should reduce the spread between interbank and selling rate by banks the present 20% is very high infact the highest in the world at best it should be 5% just imagine the CBN give them dollars at 315 and they sell at 375, now if parallel market will sell at 375 too no one will go to bank bank buy because there is limit, trail or much documentation unless the banks drop their rate too thereby competing with the BDC for customers which will lead to drop in price, during the soludo and even sanusi era spread by BDC are hardly 5% sometimes just 2%. Those saying we should float the naira should have a rethink, most nations defend their currency, floating your currency is like opening up the borders of your country no customs, no immigration, no visa, no duty everyone and everything enters at will. Assuming Nigeria is a major multi product exporting country floating may be ok, but as it is our major export is oil which is very volatile, believe me if we float speculators will run this country down dollar will be N1000 in no time. @$50 per barrel Nigeria earn about $110M daily let's say 40% goes to the JV that means we will be left with $66m daily, I recommend a 50-50 approach between reserve and injection into the economy that means every week about $220M will be injected and $220M will be saved in the reserves. I believe the present intervention by CBN is necessary and very sustainable if there is the political will.
okosodo: All i can say as a forex trader is that when this government gets tired of using the money gained from making nigerians suffer, then the dollar will still overrun the naira. Liquidity is unchanged, still at 85%.
You're just coating your hypocrisy and selfishness in a garb of patriotism,meanwhile hoping the Naira continues falling for your own selfish gain..Pray tell what's the difference between what the government is doing now and what previous governments have done to sustain the Naira.. In case you lack the proper understanding,the government propping up the Naira is a way to lessen the suffering of her Citizens as you claimed..
Am telling you. Why not reduce the rate to 10 percent since the parallel market is catching up already with bank selling price. Even the article said BDC are willing to buy @ N370 from speculators which is N5 below the approved N375 selling price @ banks.
Another thing that drew my attention on the article is BDC are willing to buy but don't want to sell in order not to incur further loss. The question is where do they get the liquid to purchase these dollars except if they are into big business sha probably through commodity trading.
To be honest, if these dollars used in defending naira are used for infrastructural development such as power, road, housing and water projects, the country will attain it's projection in a short run but with this current CBN intervention, it's going to take a very long time as development will be slowed down.
I dont agree with you make it sound like the intervention is a free donation, they get naira for every dollar put out there and this dollar was earned through oil sale, and mind you the development projects you mentioned are planned or budgeted for in naira, our national budget is in naira correct me if am wrong though
hobermener: The smart ones will increase their stock of dollars, i repeat, the smart ones will increase their stock of dollars!!!! Funelling millions of dollars into the forex maket on a daily basis, is a stupid short term solution to a longer term problem, which i assume is just a calculated move to score cheap political points.the price of Oil, the major foreign exchange earner is still very low, with opec struggling to stick with its production quota, any sensible human will evisage a further drop in oil prices, as the world moves to cleaner energy, and opec member nations continue to ignore the organizations agreements. Though slow, a long term policy of import substitution and agressive exportation through economic diversification would ultimately lead to a precipitous decline in the dollar price, but what do we have, a government still spending billions on oil prospecting, foreign direct investment at an all time low, and one of the worst economic contraction in recent times, yet some fools still cheer this fire brigade method of pumping dollars into the market for school fee payments and tourism, things that only end up driving exports higher, further complicating balance of payment problems. Producers who need forex the most do not get them, these people are supposed to be top priority, expecially the agricultural sector and the mining sector, agressive importation of producer goods is the top priority of any country that seeks to curb foreign exchange problems in the long run, these producers should have government acting as payment agents(in dollars) after these purchases have been verified by the cbn, while these producers pay in naira at subsidized rates, but what do we have, a government subsidizing payments for pilgrimage and other bullshït of little to no economic significance. Call me a pessimist, that's your opinion, buth when the inevitable consequence of this stupid move raises its ugly head, there will be no one to save the naira!!!!!
90% of the people will see this & call you enemy of progress, saboteur, profiteer even if you have not a single dollar on the market for sale... Simple reading beyond brown envelope journalism will help majority of them face reality..
Better to look away & hope that better days will miracalously come out of this misadventure... BTW, Russia is keeping things "realistic" ...
musicwriter: All we have to pray now is for the world Bank and IMF not to crash crude oil price. Its only if this don't happen that the CBN would be able to sustain this effort of injecting dollars wisely into the market.
Since when has it been the JOB of the IMF and World Bank to regulate Crude Oil Price.. ONLY the Forces of Demand and Supply Controls the Price of Oil..
I dont agree with you make it sound like the intervention is a free donation, they get naira for every dollar put out there and this dollar was earned through oil sale, and mind you the development projects you mentioned are planned or budgeted for in naira, our national budget is in naira correct me if am wrong though
Yes in naira but will they pay those foreigners in naira when contracts on power, roads and other infrastructures are awarded to them?
Badgers14: It is a shame that with all the brains we have in this country this is where we found our selves today.
In my opinion, CBN pumping dollars in the economy is a rubbish idea, voodoo economics.. Whose idea was it anyways It is a shame.
Before you start quoting me, let's reason this,
1. People talk about Forex this and that, Is Nigeria the only country that its citizens operate FOREX?
Why aren't all other countries currency down the toilet as well?
2. People say because we import more and export less. Yes that might be one of the reasons but let me tell you sth. Do you know almost everything sold in the U.S is imported? Yes I kid you not, Iphone is designed in California but produced in China.
The U.S import Bananas, Plantains, Pineapple, coconut Yes.. People living in the U.S, check the label on the bananas at Walmart, Kroeger or which ever grocery store you go.. The label would read most times, From Honduras, Guatemala, Costa Rica or some other south American country.
Also, the U.S import tooth picks, I kid you not, I was surprised when i purchased one and the label reads made in China.
You could disagree with me if you like but the main issue we have is over dependency on foreign currency.
There are some law offices that charge their clients in dollars, some government officials/ contractors are paid in USD.
Even some business, schools etc. Accept only USD as a form of payment.
Why would USD be accepted as a legal tender in Nigeria You couldn't use GBP in the U.S.
Likewise, you can't use USD in GB.
The implication of some business using USD as a legal tender is that, those businesses that accept Dollars from their clients, they pay their employees in Naira and make their office purchases in Naira.
They are indirectly running a BDC. Recall, when clients and the government go and source dollars from banks to pay those busineses , contractors and personnels. Then those business pay their employees in Naira and make their purchase in Naira. At a point banks will run out of dollars and what happens?
Economics 101, scarcity of dollars.. Then those dollar businesses will start selling their stash at a higher rate.
Does anyone recall the NNPC guy that they found $10m cash in his house? How much was recovered from those judges Diezani Plus lots of others we don't know about.
Have we ever asked ourselves, CBN have pumped almost $1bn into the market since this year and still pumping where is the money going
Not withstanding some if ur exaggerations about the US being an importing country, I completely agree with u about the abuse of the Dollar as a legal tender in Nigeria. This is an unacceptable aberration the govt shud put a stop to, immediately.
NOETHNICITY: Not withstanding some if ur exaggerations about the US being an importing country, I completely agree with u about the abuse of the Dollar as a legal tender in Nigeria. This is an unacceptable aberration the govt shud put a stop to, immediately.
I live in the U.S and. I know what am talking about..
Atleast we could find sth to agree on in your last paragraph.
Yes in naira but will they pay those foreigners in naira when contracts on power, roads and other infrastructures are awarded to them?
My point is all expenses for the power, road and other infrastructures are planned for in their naira equivalent of what ever foreign currency it actually is
90% of the people will see this & call you enemy of progress, saboteur, profiteer even if you have not a single dollar on the market for sale... Simple reading beyond brown envelope journalism will help majority of them face reality..
Better to look away & hope that better days will miracalously come out of this misadventure... BTW, Russia is keeping things "realistic" ...
I am one of those that will call him enemy of progress because of his bogus claims. One, according to the picture you posted, you can see for yourself that Trump is favouring defence over energy. That is one of the reasons Shale production surged since he became the president against general view of renewable energy becoming the order of the day, hence, the reason global oil prices plunged below $50/barrel for the first time in 3 months this March. Trump doesn't believe in climate change and their predictions.
Two, OPEC is not struggling to stick to production quota, in fact, this is the first time they've recorded over 90 percent compliance. So all member states are devising new modus operandi to factor in renewed shale's production. Therefore, OPEC and non-OPEC member states are meeting this Sunday in Kuwait to discuss US crude stockpile and its impact on global oil glut.
Third, the issue of Russia is not different from Nigeria. Our 2017 budget was initially pegged at $44/barrel before it was increased to $45/barrel after OPEC consensus was reached on November 30th. Even if oil will plunge below that benchmark it would be around September when OPEC second production cut may not have materialized and we would have gained enough from the current increase to offset whatever little deficit we sustain in the 4th quarter of the year.
All the businesses that increase prices with the excuse of rise in dollars since last year, what are they saying now that dollar's don crash? Prices of commodities rose immediately dollars rose but are those prices crashing with dollars crash now?
Naira was losing value and some Nigerians complained of the attendant increase in cost of living, now the government is trying to increase the value so that cost of living reduces in our import dependent economy, they still complain.
Ask them how much dollars they had helped in injecting into the economy individually, none.
I'm sure so many would've been praying the Naira surpasses 1000 to a dollar so that they can cast aspersions on the government of the day.
donbenie: Since when has it been the JOB of the IMF and World Bank to regulate Crude Oil Price.. ONLY the Forces of Demand and Supply Controls the Price of Oil..
Of course, that's what standard education would have you believe in the economic theories proposed by Europeans that you're not supposed to challenge. But, if you want to know who, the history, and what control the world's economy, you must see the below documentary. Yes, the forces of demand and supply do apply, but when you understand, you'll understand how demand is being created and much more.
(1). What is money and how is money created?
Money As Debt: International Bankers Own the World and This Is How.
The United States is the world's second largest manufacturer most cars sold there are made there. What does Nigeria manufacture? They are the largest exporters of aircrafts construction equipment software movies (in gross dollars) and many more. Agricultural products cars I can go on and on. Go back to school please. Russia and Venezuela had currency issues. So did Egypt. State facts next time.
Imagine the person you quoted comparing our economy to that of the USA, what does Nigeria export aside crude oil not even refined products like tiny Singapore does? Some people sef
I am one of those that will call him enemy of progress because of his bogus claims. One, according to the picture you posted, you can see for yourself that Trump is favoring defense over energy. That is one of the reasons Shale production surged since he became the president against general view of renewable energy becoming the order of the day, hence, the reason while global oil prices plunged below $50/barrel for the first time in 3 months this March. Trump doesn't believe in climate change and their predictions.
Two, OPEC is not struggling to stick to production quota, in fact, this is the first time they've recorded over 90 percent compliance. So all member states are devising new modus operandi to factor in renewed shale's production. Therefore, OPEC and non-OPEC member states are meeting this Sunday in Kuwait to discuss US crude stockpile and its impact on global oil glut.
Third, the issue of Russia is not different from Nigeria. Our 2017 budget was initially pegged at $44/barrel before it was increased to $45/barrel after OPEC consensus was reached on November 30th. Even if oil will plunged below that benchmark it would be around September when OPEC second production may not materialism and we would have gained enough from current increase to offset whatever little deficit we sustain in the 4th quarter of the year.
You picked Trump out of that, are you aware of the keystone pipleine?
Like i'll always say, i don't like long drawn out back & forth, it most often than not devolves into animosity... Let me leave you with a few things to peruse...
HAH: Is time for CBN to converge all rates in same place an equilibrium price should determined this is because the parallel market rate of 380 is almost the rate at which bank sell PTA which 375 and the CBN should reduce the spread between interbank and selling rate by banks the present 20% is very high infact the highest in the world at best it should be 5% just imagine the CBN give them dollars at 315 and they sell at 375, now if parallel market will sell at 375 too no one will go to bank bank buy because there is limit, trail or much documentation unless the banks drop their rate too thereby competing with the BDC for customers which will lead to drop in price, during the soludo and even sanusi era spread by BDC are hardly 5% sometimes just 2%.
Those saying we should float the naira should have a rethink, most nations defend their currency, floating your currency is like opening up the borders of your country no customs, no immigration, no visa, no duty everyone and everything enters at will. Assuming Nigeria is a major multi product exporting country floating may be ok, but as it is our major export is oil which is very volatile, believe me if we float speculators will run this country down dollar will be N1000 in no time.
@$50 per barrel Nigeria earn about $110M daily let's say 40% goes to the JV that means we will be left with $66m daily, I recommend a 50-50 approach between reserve and injection into the economy that mean. s every week about $220M will be injected and $220M will be saved in the reserves. I believe the present intervention by CBN is necessary and very sustainable if there is the political will.
How do you define float exactly? Is the US Dollar not floating" do they have customs,immigration,duty.
Please stop confusing ignorant people and stop saying what you don't know.People with half knowledge are more dangerous than terrorists
FYI The naira is floating even with this intervention it is still floating and what we have is a response to greater supply than afew months ago.The fundamentals have not changed.That supply is still based on oil receipts and since oil receipts are dropping you can be sure that we will be back to 500:1 in less than 3 months. The government like to pretend it has not been floating but could anyone buy at the official rate? The answer is no. The parallel market which is the most responsive to reality has been and still is floating and that is where most deals are done FINALLY.
Winter is almost over and oil did not break $60. It is clear that oil prices will drop from now forward and likely will remain close to $40 in the medium term
The United States is the world's second largest manufacturer most cars sold there are made there. What does Nigeria manufacture? They are the largest exporters of aircrafts construction equipment software movies (in gross dollars) and many more. Agricultural products cars I can go on and on. Go back to school please. Russia and Venezuela had currency issues. So did Egypt. State facts next time.
Classical stupid i too know mentality.
What i offered is my opinion, stop flaunting your single figure IQ in a bid to sound intelligent.
Most of those U.S industry you mention, manufacture over seas and assembly them in the U.S.
My opinion is that Lack of Nigerians export is not the sole problem of currency depreciation.. The major problem is to my opinion, using dollar as a legal tender in Nigeria.
Off course you deleted where i made that argument in your quote.
hobermener: The smart ones will increase their stock of dollars, i repeat, the smart ones will increase their stock of dollars!!!! Funelling millions of dollars into the forex maket on a daily basis, is a stupid short term solution to a longer term problem, which i assume is just a calculated move to score cheap political points.the price of Oil, the major foreign exchange earner is still very low, with opec struggling to stick with its production quota, any sensible human will evisage a further drop in oil prices, as the world moves to cleaner energy, and opec member nations continue to ignore the organizations agreements. Though slow, a long term policy of import substitution and agressive exportation through economic diversification would ultimately lead to a precipitous decline in the dollar price, but what do we have, a government still spending billions on oil prospecting, foreign direct investment at an all time low, and one of the worst economic contraction in recent times, yet some fools still cheer this fire brigade method of pumping dollars into the market for school fee payments and tourism, things that only end up driving exports higher, further complicating balance of payment problems. Producers who need forex the most do not get them, these people are supposed to be top priority, expecially the agricultural sector and the mining sector, agressive importation of producer goods is the top priority of any country that seeks to curb foreign exchange problems in the long run, these producers should have government acting as payment agents(in dollars) after these purchases have been verified by the cbn, while these producers pay in naira at subsidized rates, but what do we have, a government subsidizing payments for pilgrimage and other bullshït of little to no economic significance. Call me a pessimist, that's your opinion, buth when the inevitable consequence of this stupid move raises its ugly head, there will be no one to save the naira!!!!!
Of course, that's what standard education would have you believe in the economic theories proposed by Europeans that you're not supposed to challenge. But, if you want to know who, the history, and what control the world's economy, you must see the below documentary. Yes, the forces of demand and supply do apply, but when you understand, you'll understand how demand is being created and much more.
(1). What is money and how is money created?
Money As Debt: International Bankers Own the World and This Is How.
The MAIN forces that controls Crude Oil Price is the Forces of Demand and Supply,the current glut in the market occasioned by the US Oil producers IS what lead to the Fall of Crude Oil Price which OPEC is fighting by a cut in their barrel per day production.. Quoting a bunch of Conspiracy Theories doesn't change basic economic laws..
Yes.. People living in the U.S, check the label on the bananas at Walmart, Kroeger or which ever grocery store you go.. The label would read most times, From Honduras, Guatemala, Costa Rica or some other south American country.