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Naira Drops As US Begins Monetary Tightening !!! - Politics - Nairaland

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Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 3:20am On Aug 28, 2013
Emerging market currencies have been hit hard, with the Indian rupee, Indonesian rupiah and Thai baht among others at multi-year lows.

Indonesia's central bank board will meet on Thursday in a surprise move amid widespread speculation it will have to raise interest rates again to defend the fast-falling rupiah, now its lowest since April 2009, and its implied volatility at its highest.

The Indian rupee hit a record low on Tuesday and posted its biggest single-day fall in nearly 18 years after the lower house of Parliament approved a nearly $20 billion plan to provide cheap grain to the poor, raising concerns the fiscal deficit will blow out even further.

The Thai baht was at 32.15 per, its weakest level in three years.

The heightened geopolitical risk in the Middle East drove the prices of gold and oil higher, however.

Brent crude prices advanced 0.7 percent to a six-month high of $115.44 a barrel, extending Tuesday's 3.3 percent surge - their biggest one-day percentage gain in nearly 10 months.

It is now 162 naira to the Dollar officially as of close of business yesterday.

I hope this Oil windfall will shield us from the Storm of the tapering of the US Federal Reserve and the introduction of Larry Summers as the new Fed Chairman- he is said to be interested in raising rates Volker style.

Advice to start your Christmas shopping very early!!
Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 3:44am On Aug 28, 2013
Any further fall will allow Angola to assume Nigeria's position as the continent's largest crude producer, the report stated.

"Output has been less than two million barrels a day for several months," said Rolake Akinkugbe, Head of Energy Research, Ecobank.

"It's a reflection of the headwinds facing oil companies in Nigeria," she added.

The country's production difficulties have helped push global crude prices above $110 a barrel. They have also damaged the financial outlook in Africa's second-biggest economy, where oil and gas account for nearly 80 per cent of fiscal revenues.

The country had budgeted for oil sales of 2.5 million bpd in 2013, which, combined with the high petroleum prices, should have allowed for substantial savings in the Excess Crude Account, the government's rainy-day fund. But instead of increasing, the fund has been run down from $9bn in December to $5.1bn in July.

The Head, Africa Research, Standard Chartered Bank, Mrs. Razia Khan, said falling oil revenues should be a worry for the government, especially with a presidential election scheduled for early 2015.

The Financial Times reported that previous polls had been preceded by a sharp increase in spending and leakages in revenue collection as politicians tried to buy their way to power.

"Nigeria still has a comfortable current account surplus, but it is declining, as is the Excess Crude Account. Unless we see a turnaround in oil revenues, investors are going to start to get concerned," Khan said.
Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 6:26am On Aug 28, 2013
http://www.zerohedge.com/news/2013-08-28/indian-rupee-collapses-most-over-20-years

http://www.zerohedge.com/news/2013-08-27/crude-breaks-through-asian-sea-red-27-month-high

From a weak open, the Indian Rupee has now plunged a stunning 3.88% today. This is the largest single-day drop in the Rupee's value since March 1993. The Indian people have lost 30% of their global purchasing power since March 2013 (though those who swapped their paper wealth to gold have seen their purchasing power rise 6% in Rupee terms). With Gold in Rupees having broken to a new all-time high, it would seem the government has little choice but to lease its gold (no matter how vehemntly they deny the fact).

The Rupee's largest single-day drop since March 1993...
Re: Naira Drops As US Begins Monetary Tightening !!! by Nobody: 6:27am On Aug 28, 2013
.
Re: Naira Drops As US Begins Monetary Tightening !!! by iterator25: 6:29am On Aug 28, 2013
Can't wait grin
Re: Naira Drops As US Begins Monetary Tightening !!! by infobiz9ja(m): 6:39am On Aug 28, 2013
undecided
Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 6:41am On Aug 28, 2013
Bank exchange rate as of yesterday. Still to climb

Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 9:07am On Aug 28, 2013
Time to buy dollars and leave the stock market
Re: Naira Drops As US Begins Monetary Tightening !!! by Ibrahimmrfish(m): 10:25am On Aug 28, 2013
Who cares.
Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 6:13pm On Aug 28, 2013
New rate

Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 7:56pm On Aug 28, 2013
http://businessdayonline.com/2013/08/naira-falls-to-weakest-in-nine-weeks/

The naira fell to its weakest in nearly nine weeks on the interbank market on Wednesday, after the central bank chose not to supply the extra dollars many banks were hoping for.

The naira closed at 162.25 to the dollar, the weakest since June 28 when it closed at 162.60. The local currency closed at 162.05 to the dollar on Tuesday, Reuters reports.

Traders said the naira hovered around 161.95-162 earlier in the day on expectations that the central bank would sell dollars directly to banks, but when this failed to materialise the naira trended lower.

1 Like

Re: Naira Drops As US Begins Monetary Tightening !!! by mayorall(m): 9:46pm On Aug 28, 2013
citizenisb: New rate


Are you sure of this, I made 5 payments online yesterday, both first bank and GT bank charged me #164 / $1
Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 7:55am On Aug 29, 2013
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10272285/Emerging-market-rout-is-too-big-for-the-Fed-to-ignore.html


The US Federal Reserve has told Asia, Latin America, Africa and Eastern Europe to drop dead.

This has the makings of a grave policy error: a repeat of the dramatic events in the autumn of 1998 at best; a full-blown debacle and a slide into a second leg of the Long Slump at worst.

Emerging markets are now big enough to drag down the global economy.

As Indonesia, India, Ukraine, Brazil, Turkey, Venezuela, South Africa, Russia, Thailand and Kazakhstan try to shore up their currencies, the effect is ricocheting back into the advanced world in higher borrowing costs. Even

China felt compelled to sell $20bn of US Treasuries in July.

1 Like

Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 8:00am On Aug 29, 2013
We are in entirely uncharted waters. Emerging markets were less than 15pc of global GDP in the early 1980s, when tightening by the Volcker Fed brought Latin America crashing down. That was an ugly episode for Western banks, but easily contained. China was then in autarky, shut off from the world. The Soviet Union and its satellites formed a closed system.

The picture was already very different by the mid-1990s, when ex-Communists had joined the party. By then emerging markets had grown to a third of global GDP, big enough to rock the boat, as Fed chair Alan Greenspan discovered after Russia's default in August 1998.

Mr Greenspan became worried enough to canvas Fed governors on the need for a response at the Jackson Hole conclave that month. The Fed cut rates in September but it was not enough to stop the crisis spinning out of control as currencies crashed across East Asia, and the pre-EMU "convergence play" in Europe reversed violently.

The New York Fed was forced to intervene in October 1998, rescuing the hedge fund Long Term Capital Management. The Fed cut rates again in October and November. Mr Greenspan said "the probability of systemic collapse was sufficiently large to make us very uncomfortable about doing nothing".

If the stakes were high then, they are higher now. Emerging markets are half the world economy, according to IMF data. The "power ratio" is no longer 1:2, it is 1:1. Those who fell in love with the BRICS and mini-BRICS in the boom were entirely right to claim that an economic revolution was taking place.
Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 8:08am On Aug 29, 2013
Yet all we heard from Jackson Hole this time were dismissive comments that the emerging market rout is not the Fed's problem.

"Other countries simply have to take that as a reality and adjust to us," said Dennis Lockhart, the Atlanta Fed chief. Terrence Checki from the New York Fed said "there is no master stroke that will insulate countries from financial spillovers”.

The big risk is that Fed tapering will spark a rush for US dollars. That is when the Fed will stop being complacent," said Lars Christensen from Danske Bank.

"Central banks around the world think they have been doing something they shouldn't do with all this stimulus, and they want to unwind it as quickly as possible. But the danger is that they will go too far and trigger a relapse like 1937."
Re: Naira Drops As US Begins Monetary Tightening !!! by Okijajuju1(m): 11:47am On Aug 29, 2013
This NEWS is for Abokis only..




Exits Thread

1 Like

Re: Naira Drops As US Begins Monetary Tightening !!! by citizenisb: 11:47am On Aug 29, 2013
It gets worse everyday. Convert your savings now to Dollars before it loses value in Naira. Change money and keep in a Domiciliary Account ASAP

Re: Naira Drops As US Begins Monetary Tightening !!! by koolet: 11:47am On Aug 29, 2013
Mtcheew..... and some Directors are busy planning to rebrand the valueless Naira :-/
Re: Naira Drops As US Begins Monetary Tightening !!! by koolet: 11:49am On Aug 29, 2013
Why not, When our artiste and polithiefcianz launder the money anyhow,
All in all sef the Money no get Value.....





The U.S are watching.....
Re: Naira Drops As US Begins Monetary Tightening !!! by BabaEleko(m): 11:55am On Aug 29, 2013
Oloribu ni awon illuminati yen sha.
Re: Naira Drops As US Begins Monetary Tightening !!! by Nobody: 11:56am On Aug 29, 2013
pls can someone ..xplain dis acct textbook for me in just 1 paragraph undecided
Re: Naira Drops As US Begins Monetary Tightening !!! by FilesUpdator(f): 12:01pm On Aug 29, 2013
Forex things...
Re: Naira Drops As US Begins Monetary Tightening !!! by Clemzy16(m): 12:01pm On Aug 29, 2013
i was here at 1202pm


™ƺƔcιεмεηт®

1 Like

Re: Naira Drops As US Begins Monetary Tightening !!! by Nobody: 12:02pm On Aug 29, 2013
Also, let's remember that the US is currently investing in energy self-sufficiency with the massive development of shale gas and tar sands deposits as well as the new fracking technology.

When the US becomes self-sufficient (in 2017 or so) they should witness an improvement in its balance of payments position as they don't have to spend so much on energy imports. This will boost the value of the dollar against other currencies (naira inclusive) and the naira may eventually fall in value to about N250 to the dollar.

Meanwhile, our crude oil is being stolen (meaning the government revenue from oil is dwindling). Nigerians are yet to curb their taste for imported goods, meaning that less and less naira will be exchanged for more expensive US dollars going forward. This will lead to "imported inflation" as the increased cost of such goods gets transferred to the final buyer.

Meanwhile, wages will remain constant, and unemployment will remain high as companies will not be able to expand.

While all these ominous events are taking place, our "leaders" are busy strategising for 2015.

Issokay...

6 Likes

Re: Naira Drops As US Begins Monetary Tightening !!! by drstan(m): 12:06pm On Aug 29, 2013
Danielstainz: pls can someone ..xplain dis acct textbook for me in just 1 paragraph undecided
as in ehh, d tin confuse me, thank God i only worry about virus and diseases,
Re: Naira Drops As US Begins Monetary Tightening !!! by gabriel212: 12:07pm On Aug 29, 2013
Quite unfortunate coz average man feel the pain. Moreoevr, this will cause an increase in price of every commodities/ reduce in qty in order to cushion the effect of dollars rise against # beacuse Nigeria is sole importer of products. even, petroleum product price will increase/ the FGN will pay more subsidy at the end affecting our supplimentary budget. In addition, am yet to confirm the CBN is planning devaluate the # agaist $ as being read few weeks back.
Re: Naira Drops As US Begins Monetary Tightening !!! by strangest(m): 12:18pm On Aug 29, 2013
How much aboki dey sell dollar?
Re: Naira Drops As US Begins Monetary Tightening !!! by auwal87(m): 12:26pm On Aug 29, 2013
HNosegbe: Also, let's remember that the US is currently investing in energy self-sufficiency with the massive development of shale gas and tar sands deposits as well as the new fracking technology.

When the US becomes self-sufficient (in 2017 or so) they should witness an improvement in its balance of payments position as they don't have to spend so much on energy imports. This will boost the value of the dollar against other currencies (naira inclusive) and the naira may eventually fall in value to about N250 to the dollar.

Meanwhile, our crude oil is being stolen (meaning the government revenue from oil is dwindling). Nigerians are yet to curb their taste for imported goods, meaning that less and less naira will be exchanged for more expensive US dollars in order to keep importing. This will lead to "imported inflation" as the increased cost of such goods gets transferred to the final buyer.

Meanwhile, wages will remain constant, and unemployment will remain high as companies will not be able to expand.

While all these ominous events are taking place, our "leaders" are busy strategising for 2015.

Issokay...

Actually, it will be around N2,500 to $1 by 2017, due to so many factors, both political and economic.
Re: Naira Drops As US Begins Monetary Tightening !!! by UyiIredia(m): 12:34pm On Aug 29, 2013
strangest: How much aboki dey sell dollar?

#150 for the old dollar note (ie those printed before 2006). They can however buy dollar at #160 especially if it is very fresh (the latest year) sold a hundered bycks couple of days ago and had to settle for 150 to the dollar. Peace.
Re: Naira Drops As US Begins Monetary Tightening !!! by Nobody: 12:34pm On Aug 29, 2013
Chineke! shocked make I quickly go bill my clients.

1 Like

Re: Naira Drops As US Begins Monetary Tightening !!! by Nobody: 12:38pm On Aug 29, 2013
Today

Re: Naira Drops As US Begins Monetary Tightening !!! by Fairbanks(m): 12:42pm On Aug 29, 2013
geeeeesssshhh!!!!! see ghana cedes. cheesy

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