The Central Bank of Nigeria has been rationing forex to prospective importers in the past 16 months, after the global fall in the prices of crude oil, the nation’s main forex earner.

The situation has exacerbated over time and tens of thousands of applications for forex by intending importers have been kept on hold by the CBN for months.

CBN made these policies with a good intention to better the nation's economy and strengthen the naira, but that has turned the opposite way. The United State dollar is like the official currency of the world. According to purchasing Power Parity which is the number of units of a country's currency required to buy the same amount of goods and services in the domestic market as a U.S. dollar would buy in the United States. This means their is no escape route for naira. CBN is hoarding the US dollars from the reach of importer in a bid to get Nigerians to patronize our locally made goods, but that desire has not happened. There are two major reasons why price of goods rise. These are increase in demand and scarcity of the goods. when demand is high price of goods increases. The other way is if there is scarcity, demand starts building and when it accumulates then prices would definitely rise.

The CBN has put in different measures to decrease the value of naira against other currencies but non seems to work. the scarcity of dollar would just continue to pile up pressure against the naira. There is no way Nigerians would stop demanding for dollars to help import their goods. Now who are the biggest beneficiaries of these policies.

The local manufacturers who export their goods are arguably the biggest winners. they produce goods for export, these goods are exported and payments are made in dollars, this the exporter exchanges for naira and this time the amount made is far above what they use to make 16 months ago.

The second group are bankers. the big question is how? Now the official exchange rate for FOREX sales is N199 per dollar. i use some banks for my forex payment of services rendered to me. used Stanbic IBTC and they charged me N199 per dollar. but when I use my favourite bank (I won't name the bank for personal reasons but your guese is as good as mine) which i am sure is also the favourite bank of millions of Nigeria i was charged the parallel market rate which was at that time arount N270 per dollar. Imagine how many banks would be doing this illegal business and the millions of dollars that they would have made.

I think the CBN should let the naira flow freely in the market because these policies are not helping us. Right now the usd is selling at about N314 per $1. God save Nigeria.

source: http://www.talkasset.com/find-out-the-2-biggest-beneficiaries-of-cbns-forex-policies/

This logic is too technical for our Buhari to understand.


Please simplify it for dear dull one.

christinie:
This logic is too technical for our Buhari to understand.


Please simplify it for dear dull one.

What marvels me is why he is too rigid to understand that his CHANGE mantra is not positively effective on the economy

He will never understand dear or do you also expect a nursery school kid to understand it?

Buhari didn't see any four walls of any school. Do you now understand?

anisalome:

What marvels me is why he is too rigid to understand that his CHANGE mantra is not positively effective on the economy

christinie:
He will never understand dear or do you also expect a nursery school kid to understand it?

Buhari didn't see any four walls of any school. Do you now understand?

chai, u wicked o.

godoluwa:
chai, u wicked o.

some how he is saying the raw truth.

Just a little bit.

godoluwa:
chai, u wicked o.