Currently
1.There is a decline in oil revenue for the Nigerian government, less dollars is coming into the country from the No1 source of forex for the governemnt.

2. Covid 19 has caused decrease in global activities thereby less demand for oil and activities globally is estimated to be fully back when Covid vaccine is out mid next year.

3. Artificial intervention to keep the Naira v Dollar rate low only enrich the BDCs.

Resumption of International flights will force demand of forex up, the cbn resuming sale of forex to BDCs will not reverse the damage rather induce more scarcity, there is a backlog of forex transactions by banks. Once supply resume, businesses and multinationals will mop up the forex.

From history, since the existence of Nigeria, the issue of Naira going south always prevail, short term strategy to a long term problem only hurt the economy further.

Philantropists:
Currently
1.There is a decline in oil revenue for the Nigerian government, less dollars is coming into the country from the No1 source of forex for the governemnt.

2. Covid 19 has caused decrease in global activities thereby less demand for oil and activities globally is estimated to be fully back when Covid vaccine is out mid next year.

3. Artificial intervention to keep the Naira v Dollar rate low only enrich the BDCs.

Resumption of International flights will force demand of forex up, the cbn resuming sale of forex to BDCs will not reverse the damage rather induce more scarcity, there is a backlog of forex transactions by banks. Once supply resume, businesses and multinationals will mop up the forex.

From history, since the existence of Nigeria, the issue of Naira going south always prevail, short term strategy to a long term problem only hurt the economy further.

I tend to agree with the bolded.
Like someone else said, I think black market rates will fall next week as everyone rushes to sell off, and then once the BDCs are back in business and forex demand increases, they will go up again. But of course, we're all gazing into crystal balls here, so let's see what the position is 3 weeks from now.

Conglomerate, u don improve. U were able to hold a discussion without insults.

On this forex matter, I then to align with you. Whether we like it or not, as a nation, our forex inflow has been minimal. Crude oil price is at a low, global industries are still not working at full capacity. People are still encouraged to stay at home which means they are not burning as much fuel while driving. So, the demand for crude is not that high leading to a lot of production cut.

There is no abracadabra to it, the small forex available will be rationed.

Philantropists:
Currently
1.There is a decline in oil revenue for the Nigerian government, less dollars is coming into the country from the No1 source of forex for the governemnt.

2. Covid 19 has caused decrease in global activities thereby less demand for oil and activities globally is estimated to be fully back when Covid vaccine is out mid next year.

3. Artificial intervention to keep the Naira v Dollar rate low only enrich the BDCs.

Resumption of International flights will force demand of forex up, the cbn resuming sale of forex to BDCs will not reverse the damage rather induce more scarcity, there is a backlog of forex transactions by banks. Once supply resume, businesses and multinationals will mop up the forex.

From history, since the existence of Nigeria, the issue of Naira going south always prevail, short term strategy to a long term problem only hurt the economy further.

what is the monthly genuine demand of dollars by the Nigeria economy ? What is the speculative demand...what is the corrupt income demand .....the last two demads are false demands and many Nigerians holding dollars up and down dont have any tangible reasons ,buying and hoarding dollars to speculative....going forward i will advice the cbn to shut down dorm accounts holding ...once your are in Nigeria u must spend Naira .....Naira is the tender here ....why do americans, British and other dont hold dorm naira accounts in Britain .......20 bn dollars unproductive dollars warehouse in dorm accounts .....this false demand must be taken out....

ahiboilandgas:
what is the monthly genuine demand of dollars by the Nigeria economy ? What is the speculative demand...what is the corrupt income demand .....the last two demads are false demands and many Nigerians holding dollars up and down dont have any tangible reasons ,buying and hoarding dollars to speculative....going forward i will advice the cbn to shut down dorm accounts holding ...once your are in Nigeria u must spend Naira .....Naira is the tender here ....why do americans, British and other dont hold dorm naira accounts in Britain .......20 bn dollars unproductive dollars warehouse in dorm accounts .....this false demand must be taken out....

If the government can make the naira freely convertible, then commit to making it available for people who genuinely have a need, then it can ban domiciliary accounts, or restrict their use to people with demonstrable need for it (those who transact business genuine abroad or receive salaries, etc.) because their availability to all will always contribute to speculative pressure.

ojesymsym:
Conglomerate, u don improve. U were able to hold a discussion without insults.

On this forex matter, I then to align with you. Whether we like it or not, as a nation, our forex inflow has been minimal. Crude oil price is at a low, global industries are still not working at full capacity. People are still encouraged to stay at home which means they are not burning as much fuel while driving. So, the demand for crude is not that high leading to a lot of production cut.

There is no abracadabra to it, the small forex available will be rationed.

how come forex demand in Nigeria is going up when the whole world is closed .....why didnt this demand from from millions of traveller from Nigeria spur up the naira since no bta or pta and bdc selling to retail end user should have stop........2 labasene guys where caught with over 1m dollars cash in port Harcourt airports ..how many have escaped where was this dollars sourced from ? Is this a real demand for forex or criminal demand ?

Cyberknight:


If the government can make the naira freely convertible, then commit to making it available for people who genuinely have a need, then it can ban domiciliary accounts, or restrict their use to people with demonstrable need for it (those who transact business genuine abroad or receive salaries, etc.) because their availability to all will always contribute to speculative pressure.

why would the vp of Nigeria hold over 1m pounds in a dorm accounts? Where did he source for the pounds ? Is Nigeria a colony of uk or we spend pounds in Nigeria .....do any uk citizen's coming to nigeria hold naira dorm accounts ( they only change on arrival to nigeria)....why would economic saboture (smugglers) determine the naira to dollars exchange rate ? The vp holding pounds (unproductive) will be source from the little crude oil earn ....so all this future earnings paid by the Nigeria state in naira will be quicky converted to pounds ? From which source and supply since we dont print pounds....

ahiboilandgas:
Waiting for the 386 public dollars to stock up my dorm again ......

Does this means black market rate will crash? I'm asking because I have some few dollars on Binance currently traded at 463/$. If the CBN intervention will force black market rate down, it wouldn't be wise holding on to dollars now right?

Sir, you provided most of the answer in the post before this. Many people are hoarding. Just like when there is fuel scarcity, people hoard and then the price will increase.
Someone also mentioned that there is a growing interest in crypto currency, which also drives the demand for USD in a bid to buy those crypto.

Many of those who are keeping dollar right now, do not really need it, it is more of speculative. Make una non close our domiciliary account o.

ahiboilandgas:
how come forex demand in Nigeria is going up when the whole world is closed .....why didnt this demand from from millions of traveller from Nigeria spur up the naira since no bta or pta and bdc selling to retail end user should have stop........2 labasene guys where caught with over 1m dollars cash in port Harcourt airports ..how many have escaped where was this dollars sourced from ? Is this a real demand for forex or criminal demand ?

This is one of the major issue.

ahiboilandgas:
what is the monthly genuine demand of dollars by the Nigeria economy ? What is the speculative demand...what is the corrupt income demand .....the last two demads are false demands and many Nigerians holding dollars up and down dont have any tangible reasons ,buying and hoarding dollars to speculative....going forward i will advice the cbn to shut down dorm accounts holding ...once your are in Nigeria u must spend Naira .....Naira is the tender here ....why do americans, British and other dont hold dorm naira accounts in Britain .......20 bn dollars unproductive dollars warehouse in dorm accounts .....this false demand must be taken out....

ahiboilandgas:
what is the monthly genuine demand of dollars by the Nigeria economy ? What is the speculative demand...what is the corrupt income demand .....the last two demads are false demands and many Nigerians holding dollars up and down dont have any tangible reasons ,buying and hoarding dollars to speculative....going forward i will advice the cbn to shut down dorm accounts holding ...once your are in Nigeria u must spend Naira .....Naira is the tender here ....why do americans, British and other dont hold dorm naira accounts in Britain .......20 bn dollars unproductive dollars warehouse in dorm accounts .....this false demand must be taken out....

Excellent view point

A country like Nigeria really has no business making foreign currency accounts available to all, because that makes it possible for people to use foreign currency as a store of value, thus weakening the local unit. The U.S., for instance, restricts foreign currency accounts to big companies, or people with proven foreign investment portfolios, etc., among other eligibility requirements.

Speculative pressure against the naira would reduce if there were no domiciliary accounts for people to keep their foreign currencies in. By the time people realise they cannot build up huge quantities of forex at home under their mattresses, it will check the trend somewhat.

In any event, I am no fan of Nigeria's currency management in any way - the layers of middlemen should be reduced, BDCs should be restricted to selling small amounts needed by travellers, while the naira should be made freely convertible for all other legitimate uses subject to money laundering and other regulations.

The greatest disservice to the Nigeria state is the dorm accounts....if dstv hold a dorm accounts is understandable they buy foreign contents , if dangote hold a dorm accounts he buys equipments and raw materials ....but why will mr xxxx hold 1000 dollars in his dorm accounts in Nigeria when he has never been to the airports or have any business what ao ever with the dollars aside from speculations.......this constitute over 15bn dollars unproductive dollars held in dorm accounts....more so this dollars where source from cbn dollars to the bdc .....if u must come to Nigeria then u must spend ,earn and save in Nigeria ......this is sovereignty......even mnc oil companies operating in Nigeria dont hold dorm naira accounts oversea incase Naira become scare and they need to pay salaries locally....

ahiboilandgas:
why would the vp of Nigeria hold over 1m pounds in a dorm accounts? Where did he source for the pounds ? Is Nigeria a colony of uk or we spend pounds in Nigeria .....do any uk citizen's coming to nigeria hold naira dorm accounts ( they only change on arrival to nigeria)....why would economic saboture (smugglers) determine the naira to dollars exchange rate ? The vp holding pounds (unproductive) will be source from the little crude oil earn ....so all this future earnings paid by the Nigeria state in naira will be quicky converted to pounds ? From which source and supply since we dont print pounds....

Symptoms of the disease - Nigeria, its leaders and its people treat Nigeria as an extractive forum, a source of income solely and not as a place in whose future any investment should be made.

ukay2:


Excellent view point

my grand father is among pioneer currency trader in the 50 called wapa ( west african pilgrims authority) in 1980 they where raided severally ....how can a foreign currency be traded for profits with zero productive ....this bring endless price hike , uncessary and unproductive demands , hoarding, manipulations and speculation.....all bdcs and legitimate bdc should be selling and buying at the entry and exit points ....not on streets in surulere like sweets and chocolates ....

If you bought dollars above 450. This may be a good time to offload. If you bought at 400, no shaking, for now.

Crazeworld:
Does this means black market rate will crash? I'm asking because I have some few dollars on Binance currently traded at 463/$. If the CBN intervention will force black market rate down, it wouldn't be wise holding on to dollars now right?

u are part of the problem cos u dont need the dollars now ....

ahiboilandgas:
my grand father is among pioneer currency trader in the 50 called wapa ( west african pilgrims authority) in 1980 they where raided severally ....how can a foreign currency be traded for profits with zero productive ....this bring endless price hike , uncessary and unproductive demands , hoarding, manipulations and speculation.....all bdcs and legitimate bdc should be selling and buying at the entry and exit points ....not on streets in surulere like sweets and chocolates ....

We are an import dependent country,with millions of importers not eligible to get forex from CBN.
So why won't dollar trade on the street like sweets?
If una like,make una no devalue,naira go depreciate and spiral till it collapse las las
Btw,your BDC people are still selling in the 400s this morning oo upon say CBN dey threaten fire and brimstone on monday
Them don know say CBN na toothless bulldog

sirrotex:
From a legal perspective, if you have a will, upon your demise, the beneficiaries to your estate would apply to the court for a grant of probate and where you ..

Thanks G!

Dangote is looking for dollars to complete his refinaery via equipment import while some 20bn unproductive dollars are sitting in some accounts including the vp holding over 1m pounds and shouting job creations....they dont need this dollars in the near term ....this hurt the economy and bring in uncessary pressure to rates .....any araka seller can just walk into wema bank open a dorm accounts go to surulere buy at 460 and deposits 100 dollars and add to the pressures.....what does she need the 100 dollars for ....import beans, or fire wood.....or speculative purpose....while xxxx pharmaceutical needs the dollars to import sulphuric acid to make live saving drugs ....he competing with million of akara sellers holding unproductive xxxx million of dollars...

Funny enough it hurts ever one inculding the Bleep akara seller ....cos the drug company is forced to import at speculative rate cos by araka sellers and when the araka seller have malaria he hia force to buy antimalaria at this self induced speculative rate ....instead of 600 naira the akara seller now pay 1000 .....effectively lossing out the imaginary gains ...

ahiboilandgas:
what is the monthly genuine demand of dollars by the Nigeria economy ? What is the speculative demand...what is the corrupt income demand .....the last two demads are false demands and many Nigerians holding dollars up and down dont have any tangible reasons ,buying and hoarding dollars to speculative....going forward i will advice the cbn to shut down dorm accounts holding ...once your are in Nigeria u must spend Naira .....Naira is the tender here ....why do americans, British and other dont hold dorm naira accounts in Britain .......20 bn dollars unproductive dollars warehouse in dorm accounts .....this false demand must be taken out....

Your policy would be completely counterproductive.

You assume that domiciliary accounts are the only way to hold foreign currency in a globalised environment. Some of us would be happy to take advantage of such economic stupidity should the CBN engage in it.

It is simple, if people don't have faith in your currency, even if you carry guns to force them to hold your currency, they won't.

That's how free markets work.

ahiboilandgas:
Dangote is looking for dollars to complete his refinaery via equipment import while some 20bn unproductive dollars are sitting in some accounts including the vp holding over 1m pounds and shouting job creations....they dont need this dollars in the near term ....this hurt the economy and bring in uncessary pressure to rates .....any araka seller can just walk into wema bank open a dorm accounts go to surulere buy at 460 and deposits 100 dollars and add to the pressures.....what does she need the 100 dollars for ....import beans, or fire wood.....or speculative purpose....while xxxx pharmaceutical needs the dollars to import sulphuric acid to make live saving drugs ....he competing with million of akara sellers holding unproductive xxxx million of dollars...

Are you familiar with banking at all?

Yes, the money is in domiciliary accounts in Nigerian banks, that does not mean that it has also not been lent out to Dangote.

It's just like saying SMEs are looking for loans yet there are trillions of Naira in Nigerian bank accounts.

einsteine:



Your policy would be completely counterproductive.

You assume that domiciliary accounts are the only way to hold foreign currency in a globalised environment. Some of us would be happy to take advantage of such economic stupidity should the CBN engage in it.

It is simple, if people don't have faith in your currency, even if you carry guns to force them to hold your currency, they won't.

That's how free markets work.

u are free to keep it under the pillow ..u are free to do explanations on why u are travelling with over 10k into Nigeria ...u are also free to not send any dollars to nigeria ...

Funny enough it hurts ever one inculding the Bleep akara seller ....cos the drug company is forced to import at speculative rate cos by araka sellers and when the araka seller have malaria he hia force to buy antimalaria at this self induced speculative rate ....instead of 600 naira the akara seller now pay 1000 .....effectively lossing out the imaginary gains ...

einsteine:



Your policy would be completely counterproductive.

You assume that domiciliary accounts are the only way to hold foreign currency in a globalised environment. Some of us would be happy to take advantage of such economic stupidity should the CBN engage in it.

It is simple, if people don't have faith in your currency, even if you carry guns to force them to hold your currency, they won't.

That's how free markets work.

I agree.
In my submission, I said that the CBN should make the naira freely convertible within the rules and then restrict the use of foreign currency accounts.

In other words, you try to give the people a measure of confidence in holding the naira, so they can spend it abroad as they choose, while easing the need for people to use forex as a store of value. Just restricting foreign currency accounts alone as a tool would not help in my opinion.

This of course presupposes that the whole lousy multiple exchange rates nonsense and other government-inflicted distortions are done away with.

TransAtlanticEx:
We are an import dependent country,with millions of importers not eligible to get forex from CBN.
So why won't dollar trade on the street like sweets?
If una like,make una no devalue,naira go depreciate and spiral till it collapse las las
Btw,your BDC people are still selling in the 400s this morning oo upon say CBN dey threaten fire and brimstone on monday
Them don know say CBN na toothless bulldog

how will they get the dollars since we dont print or plant it in our farms ....meanwhile 20 bn dollars is held by people u dont need it and they buy ever day....

Making forex freely available for all imports is not even an option bros

Cyberknight:


I agree.
In my submission, I said that the CBN should make the naira freely convertible within the rules and then restrict the use of foreign currency accounts.

In other words, you try to give the people a measure of confidence in holding the naira, so they can spend it abroad as they choose, while easing the need for people to use forex as a store of value. Just restricting foreign currency accounts alone as a tool would not help in my opinion.

The free market always wins.

We have seen such economic foolishness in areas like drug prohibition before. We saw it when George Soros broke the Bank of England and the BOE exhausted its foreign reserve trying to defend the pound before giving up. We saw it when the Swiss tried to prevent their currency from appreciating but were forced by the market to give up. We see it when China tries to prevent capital flight and enterprising hustlers still find a way to provide "capital flight services" to those who don't have faith in the CCP and the CNY.

The CBN refusal to allow the Naira a bit of freedom is economic idiocy and only benefits currency profiteers and hustlers.

ahiboilandgas:
how will they get the dollars since we dont print or plant it in our farms ....meanwhile 20 bn dollars is held by people u dont need it and they buy ever day....

Who says they don't need it?

You buy a land and you don't build on it, waiting for it to appreciate, does the government take the land from you? Should they?

Secondly, like I pointed out to you, the bank's lend in dollars everyday. Where do you think the money they lend for comes from? Just their capital or capital and deposits? The dollars in domiciliary accounts are not idle. Don't fall for the Buharinomics propaganda

einsteine:



Are you familiar with banking at all?

Yes, the money is in domiciliary accounts in Nigerian banks, that does not mean that it has also not been lent out to Dangote.

It's just like saying SMEs are looking for loans yet there are trillions of Naira in Nigerian bank accounts.

what percentage can the bank lend from people dorm accounts saving ? infact a large junk will be idle endlessly cos of the risk of paying back by the borrower in dollars cos the enterprises borrowing is earn in Naira and depend on hawish nigerian system to convert back to dollars to feed this dorm accounts with short call time ...

ojesymsym:
Making forex freely available for all imports is not even an option bros

Of course it isn't, agreed.
But I don't think it is the CBN's place to make such determinations as part of monetary policy - the Nigerian government should find some wiggle room in its WTO or whatever commitments to use import duties or other measures to discourage what it doesn't to see happen with respect to import policy, instead of using CBN measures as a very blunt hammer to do that.

After all they closed the borders to discourage rice smuggling in breach of ECOWAS treaty obligations (with the consequent retaliation from Ghana directed at Nigerian traders), they should have simply banned "repurposed" rice from Benin Republic.