EyinadeAdemola:
All I know is dry bones shall rise again

jomoh:


You're the one who obviously needs a lesson on economics.

The government has placed ban on purchase of unnecessary items reducing the demand for dollars to purchase them invariably increasing the supply of dollars.

The government has made sure all credit/debit cards with accounts domiciled in the country cannot spend more than the amount stipulated when used out side the country. This will reduce the amount of dollars leaving the Nigerian economy invariably increasing the supply of dollars.

The CBN has refused to effect foreign transfers from account that has no BVN. Most politicians who does not want to be directly linked to the money in the dollar accounts of companies they used to front for syphoning money would find it hard to transfer their money that are in dollars. They will be forced to sell the dollars in their account or allow it to remain their and eventually loose value. Either way the dollars for supply in the economy increases. The only other option is, they withdraw the dollars and smuggle it out of the country but they risk being caught. The one in Naira account too will not be able to be transferred reducing the demand for dollars and invariably increasing its supply.

All the above policies ensures that the demand for dollars is drastically reduced and eventually when supply finally starts to outstrip dollars Naira will gain tremendously. Though not totally enough but it go a long way to reduce the tension on dollars.

Here are some other areas that can affect the demand and supply of dollars(not exclusive)

Foreign reserve
It is on the increase which will also increase the supply of dollars Nigeria have.

Resumption of refineries
The resumption of refineries will reduce the demand for dollars to purchase refined crude oil from foreign countries and on the flip side supply of dollars for necessary transactions will increase.

Ban on Nigerias beans and other export to europe
This will have negative effect on the Naira unless the FG does something about it real quick because it will reduce Nigerias foreign receipt of dollar thereby reducing the dollar supply to the economy.

So far the economy is on its way to recovery. Thanks to PMB.

cmt1:
Best analysis so far. Keep up the good work.

GreenUzzy:
What time is Chelsea Arsenal match?

jomoh:


You're the one who obviously needs a lesson on economics.

The government has placed ban on purchase of unnecessary items reducing the demand for dollars to purchase them invariably increasing the supply of dollars.

The government has made sure all credit/debit cards with accounts domiciled in the country cannot spend more than the amount stipulated when used out side the country. This will reduce the amount of dollars leaving the Nigerian economy invariably increasing the supply of dollars.

The CBN has refused to effect foreign transfers from account that has no BVN. Most politicians who does not want to be directly linked to the money in the dollar accounts of companies they used to front for syphoning money would find it hard to transfer their money that are in dollars. They will be forced to sell the dollars in their account or allow it to remain their and eventually loose value. Either way the dollars for supply in the economy increases. The only other option is, they withdraw the dollars and smuggle it out of the country but they risk being caught. The one in Naira account too will not be able to be transferred reducing the demand for dollars and invariably increasing its supply.

All the above policies ensures that the demand for dollars is drastically reduced and eventually when supply finally starts to outstrip dollars Naira will gain tremendously. Though not totally enough but it go a long way to reduce the tension on dollars.

Here are some other areas that can affect the demand and supply of dollars(not exclusive)

Foreign reserve
It is on the increase which will also increase the supply of dollars Nigeria have.

Resumption of refineries
The resumption of refineries will reduce the demand for dollars to purchase refined crude oil from foreign countries and on the flip side supply of dollars for necessary transactions will increase.

Ban on Nigerias beans and other export to europe
This will have negative effect on the Naira unless the FG does something about it real quick because it will reduce Nigerias foreign receipt of dollar thereby reducing the dollar supply to the economy.

So far the economy is on its way to recovery. Thanks to PMB.

989900:


Well said.

If the CBN can pull a psychological move on the market by letting the Naira appreciate by a Naira or 2 at this time, I guess all those hoarders will flood the market with dollars in quantum.

OTOH, the CBN's monetary policy causing excess liquidity will have to be addressed for a long lasting cure.

Adesiji77:



http://nairametrics.com/conspiracy-theory-of-what-could-happen-to-nairadollar-in-the-next-few-weeks/

jomoh:


You're right but unfortunately there's little the CBN can do on the excess liquidity for now for the following reasons.

1. The Debt being owed by the FG through various Bonds is monumental. Issuing another bond to mop up the excess liquidity will only increase the debt and this would be like postponing the trouble.
The only solution I see to it is for the CBN and NAICOM to compel Banks and insurance companies to increase their capital base. This will mop excess cash and at the same time make such organisations stronger.

2. The stolen funds circulating in the economy is also one reason why there's excess money in the system. Until the government starts to recover those funds from banks where they are stashed the excess Naira will remain in system making the supply of Naira in the economy greater than Dollars available to balance it.

holicalpha:
Impowsivil, our Baba will make #1 equal $1 plus phight and end kwarruption

Just give him 10more years...every thing will be alright.

Farkson:


So also ur breakthrough will tarry for two decade...just wishing u what u wish ursef.

obailala:
Sounds like a good analysis, but I must confess, I'm not an economist and dont understand up to half of what has just been analysed.

In summary, is the latest trend good or bad for the naira and the Nigerian economy?

jomoh:


You're the one who obviously needs a lesson on economics.

The government has placed ban on purchase of unnecessary items reducing the demand for dollars to purchase them invariably increasing the supply of dollars.

The government has made sure all credit/debit cards with accounts domiciled in the country cannot spend more than the amount stipulated when used out side the country. This will reduce the amount of dollars leaving the Nigerian economy invariably increasing the supply of dollars.

The CBN has refused to effect foreign transfers from account that has no BVN. Most politicians who does not want to be directly linked to the money in the dollar accounts of companies they used to front for syphoning money would find it hard to transfer their money that are in dollars. They will be forced to sell the dollars in their account or allow it to remain their and eventually loose value. Either way the dollars for supply in the economy increases. The only other option is, they withdraw the dollars and smuggle it out of the country but they risk being caught. The one in Naira account too will not be able to be transferred reducing the demand for dollars and invariably increasing its supply.

All the above policies ensures that the demand for dollars is drastically reduced and eventually when supply finally starts to outstrip dollars Naira will gain tremendously. Though not totally enough but it go a long way to reduce the tension on dollars.

Here are some other areas that can affect the demand and supply of dollars(not exclusive)

Foreign reserve
It is on the increase which will also increase the supply of dollars Nigeria have.

Resumption of refineries
The resumption of refineries will reduce the demand for dollars to purchase refined crude oil from foreign countries and on the flip side supply of dollars for necessary transactions will increase.

Ban on Nigerias beans and other export to europe
This will have negative effect on the Naira unless the FG does something about it real quick because it will reduce Nigerias foreign receipt of dollar thereby reducing the dollar supply to the economy.

So far the economy is on its way to recovery. Thanks to PMB.

holicalpha:
Impowsivil, our Baba will make #1 equal $1 plus phight and end kwarruption

Just give him 10more years...every thing will be alright.

PStacks:
[s]I doubt if this truly was from JP Morgan or is it Morgan Stanley? I don't know tho.

But such giant coporations should know Exchange rates aren't determined only by happenstances in one country.

Exchange rate is a battle between 2 countries by and large 2 economies.

The American Economy has an unemployment rate placed at 5.4% as at the last stastistics from the Department of Labour in America.

The American Non-farm payrol and unemployment claims would be out Friday this coming week, those are better barometers to use in tracking dollar strength as against other major currencies.

Right now as it were, The Dollar has dwarfed other major World Currencies notably the Euro.

The Euro has slumped below 1.100 to a single dollar from aroun 1.600 last year and analyst are expecting parity between the dollar and the euro by end of this year owing to political and economic uncertainties in Greece and other Euro-zone nation.

In essence, if the Dollar can dwarf the Euro, of course Greece is going thru reforms, greece is a far more stable country according to Fitch rating as compared to nigeria.

Then analyst should be careful not to be to optimistic to forcast a recovery for the Dollar naira rate in the near future.

Should Buhari truly fight institutionalised corrupt and implement such reforms IMF is forcing down the throat of greeks, should Austerity measures be deployed in a nigeria where there is already war and starvation and internally displaced people cos of boko haram, in a country where States owe salaries of up to 8 months.

Should any further Measures be added to the hell nigerians are going thru to shaw-up naira exchange rate illegally and no allow for natural process of demand and supply play out.

There might be some large scale recession in the economy and people would be depressed the more, already I hear in osun state people can't pay their childrens school fees, can't pay hospital bills and can't get nourishment from the market because no money,

Greece doesn't have any insurgency like nigeria, greece hasn't gotten any where close where nigeria has gotten yet she's on all international media headlines.

Nigeria is a real unique scenario. A country where one minister loots over 9 Billion dollars, what do you expect.

Institutionalised and monumental corruption is at an unprecedented level hence 5 years after buhari leaves office and succesfully carries out reforms is only when Nigerians should expect that Exchange rates could go down, because America too isn't sleeping. In the interim, they should be careful the dollar don't trade even above #280 #300 cos that's where it seems to be going now.

Buhari might halt the free fall it in his 2nd or 3rd year of governance but reversing it, I doubt.

Cautious Optimism should be far from nigeria at the moment not even Buhari is a Prophet, a Magician or a Miracle worker.


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stagger:


How will demand for dollars reduce when we still import petroleum products and a lot of school fees remittances to schools abroad still occurs?

Built2last:


I will explain better when am less busy if you need further clarifications