seunmsg:



It is not a matter of Buhari or Osinbajo. CBN is simply flooding the market with dollars and naturally, the market will respond to the laws of demand and supply.

With this policy, we are back to the era of throwing our forex around to defend the naira so, it is nothing new or magical. The down side is that CBN may likely stop building the reserve in order to sustain this policy and any slight drop in crude production, sustainability will become an issue.

That's the point.
Buhari was building reserve.
Osibanjo is flooding the economy.
It's a matter of PMB, PYO

Please, I never insinuated that reserve shouldnt be built but PYO's tilt is far better than PMB's

unclezuma:


That's correct at the rate we dumping Petrodollars into the market without a strong influx God Help Us All.

not true....this will give investors more confidence to invest...dont also forget that crude oil price is increasing surprisingly.this will increase our foreign reserve,which has been increasing astronomically since last december

martineverest:
not true....this will give investors more confidence to invest...dont also forget that crude oil price is increasing surprisingly.this will increase our foreign reserve,which has been increasing astronomically since last december

My opinion.

martineverest:
so,u have been hoarding dollars.na God catch u

Haba, how much is $500. Is Yakubu not a Nigerian. $9.8m just from one bunker na beans.

Bevista:
Your first paragraph gives the impression that the CBN is only spending about $600m from $2.8b. Kindly note that prior to the new policy, the apex bank was already spending a lot to fund critical sectors of the economy like fuel imports, equipment & machinery for agriculture and manufacturing, raw materials for critical sectors, military hardware, etc. So you see, when you add this new monthly spend to the existing spending, then the NET balance left for the Reserves might not be that much.
---
Secondly, considering that monthly FAAC sharing is less than N500b (about $1.5b), I'm curious to know whether, indeed, the country gets as much as $2.8b from crude oil sales.

You still do not understand how this works. We are talking about forex generation here, not the total revenue generated. Taxes, commissions, etc are used for fiscal spending since they are generated in Naira, whereas foreign loans are used to cushion the economy and finance capital projects via interbank forex market which exchange it at 305/$ for contractors.

Also, when you calculate expenditure always remember to exclude 'amount exchanged/auctioned' by the CBN. Except when it is used to clear backlogs. Please note that oil revenue is just 10 percent of the GDP. Another thing is that the CBN has been adding about $100 million to reserves on a daily basis for the past one week. So they have plans and clearly know what they are doing.

I have learnt a lot from the economists in this thread. Thanks for the insightful and diplomatic arguments.

I just pray that the positive impact on the foreign exchange hence less pressure on the naira is sustainable (continuum process).

Though some credit should be given to PYO for his diplomatic/peaceful dialogue with oil producing states communities as militants attack on oil facilities has reduced drastically albeit contributing oil production increase. With the crude price above $50 per barrel against the bench mark of $37 for our budget leaving minimum of $13, such difference is being reflected today as foreign reserve is getting fat, naira gaining value and more forex available for manufacturers,traders to import raw materials, machinery, etc, to meet their production needs.

Also, we also need to know that non oil sectors are improving though at a snail speed and if these trends continues, I believe before 2020, Naira may exchange at N150 per dollars, resulting to reduction in inflation rate with employment rate higher, improve power generation and other positive trends, I just pray corruption will not ruin this trend.

mars123:
You are saying people shouldn't attribute the success to the acting president and you're also saying peace negotiations in the ND is responsible for increase in oil production. But you're forgetting that the VP is the one currently leading peace talks over there. Can't you see how wrong you are when you say the vice president shouldn't get some well deserved credit.

The current rise in oil price has led to the surplus in FX, even with the peace talks, if we had low crude price, we won't have achieved this, not forgetting he was appointed to lead the peace talks by the President as well as made the head of economic team by the President.
I hope the refineries can come on stream, then you will know the real power of the Naira.

Incrizz:

That's the point.
Buhari was building reserve.
Osibanjo is flooding the economy.
It's a matter of PMB, PYO

Please, I never insinuated that reserve shouldnt be built but PYO's tilt is far better than PMB's

Osibanjo is not flooding the economy, the reserve has been built to a level that gives foreign investors hope.
Don't forget that when dollobecomes so low, investors might not want to come in,
A big mistake was made in agreeing to devalue, for investors to come in, when we still had boko haram in the north and militancy in the south, as well as funny herds men everywhere, who would have wanted to invest in such a situation. We have relative peace now, let's hope investors will come, so we can push the dollar down further.

martineverest:
naysayer and bad belle...the crude oil is pegged at 38 dollars and its been sold at 53-58 dollars.dats about 15-20 dollars in xcess...if it moves to 70-100 dollar/barrell,it will signal the end of recession.CBN will float our markets with dollars

We are nit talking about recession here, we are talking about exchange rate.

YOU GUYS SAID NIGER DELTA IS NOT IMPORTANT SO EVERY THING IN IS DEPENDENT ON THE OIL....IF THEY BLOW UP PIPE LINE NOW MEANS WE ARE BACK TO SQUARE ZERO....SO THE NORTH NOR THE WEST DO NOT MOVE OUR ECONOMY GOD BLESS THE SOUTH SOUTH AND SOUTH EAST IF NOT NIGERIA WILL BE LIKE ZIMBABWE

2dugged:
Gains #10 depreciates by #50, the gain will only be significant if it's gains by atleast #100

The most important thing is stability.

Ones that is settled then we know the direction

Truth234:


Foreign exchange research analyst

OK, I'm an economist.

emmabest2000:
They buy 440 and sell 460 now ...
It will skyrocket to 550 soon

is that what you like?

kolaaderin:


Haba, how much is $500. Is Yakubu not a Nigerian. $9.8m just from one bunker na beans.

my guy,na u dey look am dat way....if 10,000 ppl hoard 5OO dollars and another hoard 200 dollars,do u know the implication?

seunmsg:


My initial post was to address some people who are erroneously attributing the success of the policy to the acting president.

And yes, CBN is flooding the market with dollars right now because they have the means. As at this time last year with foreign reserve at around $25billion and crude production at an all time low coupled with the price of crude then, they couldn't have rolled out this type of policy.

The simple summary is that, we are now earning more forex due to the sustained price of crude oil at over $50 and the steady rise in production due to ongoing peace negotiation. If these two variables decline sharply, we will be back to square one again. So, those who are concerned about the sustainability of this policy are not wrong because CBN does not control these two variables.

If you insist osinbajo has no hand in this policy, why not ask yourself why such policy was never put in place when Buhari was around? And have you forgotten that osinbajo is the head of the Presidential Economic Team? Why are you so angry?


This link below may help enlighten your ignorance. Even if you lack the sense of reasoning to apologise, you may have the morality to stop spreading lies and bad blood around the place.

https://www.nairaland.com/3649241/how-naira-went-n525-1

HAH:
black market exist when there is scarcity, if CBN sustain it supply with the crude price increasing and vandalism nonexistent, no one will do black marketing it will die a natural death unless the government changes it policies to the worse

Exactly. It happened in the era of soludo, where the diff with parallel market was not up to #5. Welcome development

Truth234:

Foreign exchange research analyst

Hello bro, I sent u a message.

BizBayo:


Hello bro, I sent u a message.

Replied.

Proudlyngwa:

Osibanjo is not flooding the economy

Sorry, did you read the OP?
That CBN announced a new forex policy on Monday

Economists and speculators were so sure that trading would close at N600/$1 before mid March, 2017.
However, on February 20, 2017, the Central Bank of Nigeria (CBN) tweaked its foreign exchange policy following marching orders from the national economic council headed by Vice President Yemi Osinbajo.

And you still haven't seen this on FP right now?
Here's the link:
https://www.nairaland.com/3649241/how-naira-went-n525-1#54035035


It's about PMB, PYO!!!!

bayelsaowei:
Abeg make buhari never return ooo...abeg....

Dey there na wen him cum back just no sa naira don die.

Truth234:


There is nothing like flooding the market with dollars, you just need to understand how the CBN works. Currently, the institution is generating about $2.4 billion-$2.8 billion in forex a month, and since this new policy was introduced a total of $610 million ($370+$240) has been auctioned.

Meaning, the CBN is saving more than its spending, and don't forget our output is near all time low 1.6mbpd but once the trans forcado pipeline is open by the second quarter, we should be able to up our production to about 1.8mbpd-1.9mbpd and increase our revenue generation even more.

Once the manufacturers can access forex at a moderate rate, the consumer prices (inflation rate) will cool and job creation will increase. So will consumer spending and gradually the economy will once again come alive. There is no point saving all the money while the economy dies of scarcity.

you have earned my admiration with the above economic analysis. most peps don't understand hw this things work. they just jump into shallow conclusions

Since prof became the acting president, the Nigerian Naira has been steadily gaining strength against the USSD. Well we are hoping for better things to come. God bless the prof.

Incrizz:

Sorry, did you read the OP?
That CBN announced a new forex policy on Monday


And you still haven't seen this on FP right now?
Here's the link:
https://www.nairaland.com/3649241/how-naira-went-n525-1#54035035


It's about PMB, PYO!!!!

And how is that flooding

Proudlyngwa:

And how is that flooding

That's the PMB, PYO thingy I've been trying to tell you about.

As for how it's flooding,
Aww..'can't help ya with copying and pasting.
You will need to re-read the Original Post.

If you like

kaboninc:


The most important thing is stability.

Ones that is settled then we know the direction

thanks to our trial and error government for the instability

Nigerians are behind the problem of dollar,if the transaction is well checked Naira will still appreciate the more.
Good job the VP

Truth234:


There is nothing like flooding the market with dollars, you just need to understand how the CBN works. Currently, the institution is generating about $2.4 billion-$2.8 billion in forex a month, and since this new policy was introduced a total of $610 million ($370+$240) has been auctioned.

Meaning, the CBN is saving more than its spending, and don't forget our output is near all time low 1.6mbpd but once the trans forcado pipeline is open by the second quarter, we should be able to up our production to about 1.8mbpd-1.9mbpd and increase our revenue generation even more.

Once the manufacturers can access forex at a moderate rate, the consumer prices (inflation rate) will cool and job creation will increase. So will consumer spending and gradually the economy will once again come alive. There is no point saving all the money while the economy dies of scarcity.

Good bless you for this explanation.

989900:


Pipeline vandals are a major draw back on our collective progress. Less vandalism brings in more dollars, more power generation, which ultimately translates to less fuel consumption and by extension less Forex consumption.

So it means NigerDelta should be treated speacially, since we all seem to agree that region sustains this marriage!!!

xpiranza:
YOU GUYS SAID NIGER DELTA IS NOT IMPORTANT SO EVERY THING IN IS DEPENDENT ON THE OIL....IF THEY BLOW UP PIPE LINE NOW MEANS WE ARE BACK TO SQUARE ZERO....SO THE NORTH NOR THE WEST DO NOT MOVE OUR ECONOMY GOD BLESS THE SOUTH SOUTH AND SOUTH EAST IF NOT NIGERIA WILL BE LIKE ZIMBABWE

well said
SS/SE sustains this marriage somehow! that region should be treated with some respect

Incrizz:

That's the PMB, PYO thingy I've been trying to tell you about.

As for how it's flooding,
Aww..'can't help ya with copying and pasting.
You will need to re-read the Original Post.

If you like

Read and reread
E be like say sun no hot reach for your side
This one wey u dey give me work

how much is it now?