wealthprod:
i believe this is a topic we nigeria must treat seriously or else the bank are going to be taking us for a ride.
imagine Cbn selling dollar to the bank at the rate of 199 per dollar while bank in return will charge us at the rate of 301 or 300 per dollar when using your debit card to make transaction online

Nigeria let wake up and take this topic seriously because bank are not BDC but institution and they keep milking us this way
The best solution to this is to cry out and let the Cbn know what is happening so that the bank can be sanction for this

viktor01:
Sorry about that OP but here in Nigeria, 1USD = 1NAIRA Since our new President assumed power.

Which country did you say you are from again?

wealthprod:
i believe this is a topic we nigeria must treat seriously or else the bank are going to be taking us for a ride.
imagine Cbn selling dollar to the bank at the rate of 199 per dollar while bank in return will charge us at the rate of 301 or 300 per dollar when using your debit card to make transaction online

Nigeria let wake up and take this topic seriously because bank are not BDC but institution and they keep milking us this way
The best solution to this is to cry out and let the Cbn know what is happening so that the bank can be sanction for this

wealthprod:
i believe this is a topic we nigeria must treat seriously or else the bank are going to be taking us for a ride.
imagine Cbn selling dollar to the bank at the rate of 199 per dollar while bank in return will charge us at the rate of 301 or 300 per dollar when using your debit card to make transaction online

Nigeria let wake up and take this topic seriously because bank are not BDC but institution and they keep milking us this way
The best solution to this is to cry out and let the Cbn know what is happening so that the bank can be sanction for this

Bevista:
I am not sure the CBN sells dollars directly to banks arbitrarily.
---
The dollars allocated to DMBs are based on customer requirements which the banks will have to show evidence to the CBN. Such requirements include approved LCs, BTA, Medical bills, school fees, etc. So, all dollars given to banks already have pre-determined purposes.
---
The bank is most likely sourcing extra dollars from independent & unconventional sources and will transfer this cost to the customer. If they do not do what they are doing now, then you may not even be able to use your cards for international payments because the banks won't have dollars to clear that transaction. Maybe then you will be begging to pay N350.
---
The major problem I see here is when the banks are buying dollars from customers. They pay less than N197 and yet will sell that same dollars to another customer at N285. As long as the huge divergence exist between the official and black market rates, this arbitrage will continue.
---
What the CBN needs to do is to devalue the official rate to anywhere between N230 - N250 and that will narrow the gap between the two markets. Pending that, the banks will continue their roundtripping and there's nothing you can do about it. Have you wondered why the CBN is not saying anything about the matter? Or do you think they are not aware?

saleskara:
This could be due to the principle of seeking undue advantage of the inability of teh CBN to regulate how the dollar is managed by the banks and other institutions that buy dollar at the official rate.

The Central Bank needs to start monitoring the utilization of the forex allocated and publish weekly the list of all beneficiary banks and businesses.

This article says more about steps to fix the dollar to naira valuation http://therenaissanceng.com/naira-devaluation-emefieles-battle-to-save-nigerian-economy

Yet Emefiele devalued the currency twice in the twilight of Goodluck Jonathan’s administration. Then I decided to look into the merits and demerits of the approach by the CBN governor in keeping with the wishes of PMB that Naira should be strong.

How does he go about taming the hawks running after the chick (Naira)? No doubt some would gain from a devaluation of the Naira against the USD while others would lose.

Why devalue the Naira? The most common arguments are the forces of demand and supply. Many authors claim that the supply of the dollar is too low due to crude oil prices and our ability to build our foreign reserves when the crude oil prices were as high as $140.

So the story keeps going on around the supply side of the equation with little or no consideration for the demand side.

So what is happening on the demand side?

The demand for US dollar in Nigeria is putting pressure on the Naira and our foreign reserves, thereby depleting the reserves faster than we are able to replenish it.

So the CBN decided to reduce its supply of forex to the market by removing some items from the list of products eligible for funding through the official forex window also known as Wholesale Dutch Auction System (WDAS).

Immediately this was announced the importers shifted to the Bureau De Change (BDC) for their dollar demand. So the demand advocates want to survive by relying on the BDCs and the BDCs saw a surge in demand with little supply causing the first major pressure that led to Naira selling at above N230 and the upward trend for dollar demand continues.

One interesting point in this period was that the demand started to drop as the appetite for imported goods started to drop but with minimal effect on the foreign reserves since the crude oil prices also kept dropping.

So CBN acted the second time by preventing banks from accepting dollar deposits, this resulted in the next supply shock and uncertainty in the parallel forex market pushing the USD to Naira rate to approximately N270. Does this mean that the demand for dollar would keep going up?

The most recent action by the CBN in January 2016 made the most recent jump to N300. My answer is Yes, every pronouncement by the CBN has only succeeded in fueling an increase in the demand of the dollar at the parallel market.

The reason for the decline is the anticipated official devaluation; every announcement shows the CBN is desperate to curb the demand. This action is a signal to rent seekers, prospective hoarders who feel they may need dollar anytime soon and currency speculators to continue to convert all spare naira cash to US dollars.

If I bought dollar when it was N220 and sell now that is N300 I don’t need to import to make a margin of N80 or 36% through the devaluation of the Naira at the Black Market.

Who is CBN selling the scarce dollars to? Why do some business men have a right to buy dollar at N197 (dollar subsidy) while every other business buys at N300. In recent times, many companies who buy dollar at official rate come to the market to claim that dollar is affecting them so they calculate sales based on N300.

CBN cannot control what the recipients of dollars at N197 do when the product gets to Nigeria. So the artificial demand for dollar and the traditional forex round tripping (where people buy at official rate, get some extra dollars at the official rate and sell the extra to the parallel market for profit)

CBN needs to introduce transparency by providing the details of all beneficiaries of the sale of USD N197 since May 29, 2015 for public scrutiny. This should show details of the purpose of the transactions.

What is happening at the supply side?

http://therenaissanceng.com/naira-devaluation-emefieles-battle-to-save-nigerian-economy

familierl:
I recently wrote about this issue on Ben Bruce facebook page, the banks are the major culprit of corruption. They are also responsible for the artificial rise in FX. How on earth would they be charging the same rates as the black market. Their must be a huge number of people benefiting from this lawless means. Its a shame! Nigerians should please condemn this act by the banks.

veraponpo:
I do not think banks can do that because they are bound by BOFID/BOFIA. Because of the following reasons:

CBN sells at N197.

Banks do not sell at N301 rather it is BDC that does that.

There is inter-bank rates and that is within N198-201.

It is the parallel market that is selling above N300. There reason is because Nigeria as a country has very poor exporting ability. Our major export is crude oil and there is bad market for it now.

The demand and supply economics theory is working too. Demand for dollar is high and supply is low, therefore price is high.

Bevista:
I am not sure the CBN sells dollars directly to banks arbitrarily.
---
The dollars allocated to DMBs are based on customer requirements which the banks will have to show evidence to the CBN. Such requirements include approved LCs, BTA, Medical bills, school fees, etc. So, all dollars given to banks already have pre-determined purposes.
---
The bank is most likely sourcing extra dollars from independent & unconventional sources and will transfer this cost to the customer. If they do not do what they are doing now, then you may not even be able to use your cards for international payments because the banks won't have dollars to clear that transaction. Maybe then you will be begging to pay N350.
---
The major problem I see here is when the banks are buying dollars from customers. They pay less than N197 and yet will sell that same dollars to another customer at N285. As long as the huge divergence exist between the official and black market rates, this arbitrage will continue.
---
What the CBN needs to do is to devalue the official rate to anywhere between N230 - N250 and that will narrow the gap between the two markets. Pending that, the banks will continue their roundtripping and there's nothing you can do about it. Have you wondered why the CBN is not saying anything about the matter? Or do you think they are not aware?

Bevista:
LCs, BTA, Medical bills, school fees

mployer:

The banks don't get their fx from cbn, so cbn has no say in their exchange rate.

veraponpo:
I do not think banks can do that because they are bound by BOFID/BOFIA. Because of the following reasons:

CBN sells at N197.

Banks do not sell at N301 rather it is BDC that does that.

There is inter-bank rates and that is within N198-201.

It is the parallel market that is selling above N300. There reason is because Nigeria as a country has very poor exporting ability. Our major export is crude oil and there is bad market for it now.

The demand and supply economics theory is working too. Demand for dollar is high and supply is low, therefore price is high.

ican2020:
That is naija for you.
When GEJ was there, we called him weakling.
Today, we have GMB a fighter that has failed to call this corporate organization to order.
I am already searching for a leader that will protect our interest, because these past and present leaders have failed us BIG TIME.

ibe9ja:
FYI cbn is aware of that. Do u think the banks are foolish enough to dare Buhari after what he did to them regarding the adoption of single TSA? The more u look the less u see my brother. The only thing we can do is to pray for 2019 to come fast.

wealthprod:
i believe this is a topic we nigeria must treat seriously or else the bank are going to be taking us for a ride.
imagine Cbn selling dollar to the bank at the rate of 199 per dollar while bank in return will charge us at the rate of 301 or 300 per dollar when using your debit card to make transaction online

Nigeria let wake up and take this topic seriously because bank are not BDC but institution and they keep milking us this way
The best solution to this is to cry out and let the Cbn know what is happening so that the bank can be sanction for this

Bevista:
I am not sure the CBN sells dollars directly to banks arbitrarily.
---
The dollars allocated to DMBs are based on customer requirements which the banks will have to show evidence to the CBN. Such requirements include approved LCs, BTA, Medical bills, school fees, etc. So, all dollars given to banks already have pre-determined purposes.
---
The bank is most likely sourcing extra dollars from independent & unconventional sources and will transfer this cost to the customer. If they do not do what they are doing now, then you may not even be able to use your cards for international payments because the banks won't have dollars to clear that transaction. Maybe then you will be begging to pay N350.
---
The major problem I see here is when the banks are buying dollars from customers. They pay less than N197 and yet will sell that same dollars to another customer at N285. As long as the huge divergence exist between the official and black market rates, this arbitrage will continue.
---
What the CBN needs to do is to devalue the official rate to anywhere between N230 - N250 and that will narrow the gap between the two markets. Pending that, the banks will continue their roundtripping and there's nothing you can do about it. Have you wondered why the CBN is not saying anything about the matter? Or do you think they are not aware?