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Nigeria Exchange Rates To Dollar-history - Business (1) - Nairaland

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Exchange Rate Of Naira To Dollar As At Today / CBN Lowers Rates To Encourage Bank Lending / Naira Now 200 To Dollar - It Could Get Worse (1) (2) (3) (4)

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Re: Nigeria Exchange Rates To Dollar-history by naijaking1: 3:05pm On Aug 18, 2010
@Paddy-lo
Thanks for the examples of the need to have a weakened currecny at times.
The big question is whether that theory applies to Nigeria?
A friend once said that Nigeria is one place where known economic theories never apply.
If Nigeria makes toothpicks for export example, then weakening the naira might encourage people to buy more of our toothpicks, but that's not the case. We have refused to expand our export base from the crude oil that is already priced in dollar.
So, you see, our exchange rates has been a function of oil export, and immediate short-term criminal political agenda such as elections and the need to shift significant quantity of currency from Nigeria to country XYZ.
The most extreme of these cases would be to Abacharize the whole market: set up 2 systems, one official; and the other unofficial. Then make a "killing" collecting kick-back from people who want to pay the official 1:20 rate as against the 1:120 market rate.
Re: Nigeria Exchange Rates To Dollar-history by paddylo1(m): 3:38pm On Aug 18, 2010
@Paddy-lo
Thanks for the examples of the need to have a weakened currecny at times.
The big question is whether that theory applies to Nigeria?
A friend once said that Nigeria is one place where known economic theories never apply.
If Nigeria makes toothpicks for export example, then weakening the naira might encourage people to buy more of our toothpicks, but that's not the case. We have refused to expand our export base from the crude oil that is already priced in dollar.
So, you see, our exchange rates has been a function of oil export, and immediate short-term criminal political agenda such as elections and the need to shift significant quantity of currency from Nigeria to country XYZ.
The most extreme of these cases would be to Abacharize the whole market: set up 2 systems, one official; and the other unofficial. Then make a "killing" collecting kick-back from people who want to pay the official 1:20 rate as against the 1:120 market rate.

Nigeria is not immune to known economic theory like your friend claims

The problem with Nigeria(in the past),and to a small extent today

was the absence of what economists call a transmission mechanism,for economic policies

That is a Financial system,that transmit GOVt economic plans into reality. . .

Because our financial system was never linked to the real sector,no matter what GOVT tried to do it never worked. . .

Not until SOLUDO,came and did his consolidation,before u began to see that transmission

Credit by banks to the private sector,exceeded credit by banks to the GOVt for the first time ever in Nigeria's history in 2008

We have just established credit bureaus,the bond market is deepening after being resuscitated in 2005,

companies can now issue corporate bonds and price it off the FGN bonds

These are some of the financial transmission mechanism,that are beginning to take root in the country

so that when the CBN reduces interest rates,it will affect the rates banks charge
When companies want to expand they can go for debt or equity
When the CBN/Finance ministry wants to encourage credit growth to targeted sectors like Manufacturers
they now have banks they can work with,large enough to handle such funds

These were all non-existent till 2005 -2006

so i am hopeful. . with more innovations in the near future,like Real estate investment trusts(REITS),derivatives to hedge exchange or interest rate risk,securitization of loans,retail trading of bonds/equity and so on the financial system in the country will be more advanced and can fund more economic activity

of course having the right GOVT policy is also key
Re: Nigeria Exchange Rates To Dollar-history by Kobojunkie: 3:41pm On Aug 18, 2010
naijaking1:

@Paddy-lo
Thanks for the examples of the need to have a weakened currecny at times.
The big question is whether that theory applies to Nigeria?
A friend once said that Nigeria is one place where known economic theories never apply.
If Nigeria makes toothpicks for export example, then weakening the naira might encourage people to buy more of our toothpicks, but that's not the case. We have refused to expand our export base from the crude oil that is already priced in dollar.


It is common knowledge actually, and your friend is right to state that.
Re: Nigeria Exchange Rates To Dollar-history by Aigbofa: 6:15pm On Aug 18, 2010
Nigeria is simply not producing enough, partly due to non existent infrastructure. The current value of the Naira depends almost entirely on how much oil we are selling, as there is very little manufacturing and non oil export going on.
Re: Nigeria Exchange Rates To Dollar-history by Nobody: 6:18pm On Aug 18, 2010
KnowAll:

1 Kuwaiti Dinar = N540.00  shocked

1 Maltese Lire = N450.00  shocked



I think I am in the wrong country  
undecided embarassed

cool cool cool
Re: Nigeria Exchange Rates To Dollar-history by Oba234: 9:40pm On Aug 18, 2010
I have a question. does Nigeria have a current account surplus or deficit? Since our currency is weak, it should resorts to current account surplus because we should be a producing country, but with all I am reading, I am kinda confused, so all the economics major in the house, help me out.
Re: Nigeria Exchange Rates To Dollar-history by paddylo1(m): 10:25pm On Aug 18, 2010
I have a question. does Nigeria have a current account surplus or deficit? Since our currency is weak, it should resorts to current account surplus because we should be a producing country, but with all I am reading, I am kinda confused, so all the economics major in the house, help me out.

we have a current account surplus for the past 5yrs. . .except 2009. . when the economic crises hit

we will run a surplus this yr. . .

ill look for data for u
Re: Nigeria Exchange Rates To Dollar-history by 4Play(m): 10:36pm On Aug 18, 2010
We had an overvalued currency in the 70s. Following the oil price crash in the late 70s and early 80s, the Naira had only one way to go, down. Those who blame IBB are clueless. This country was bankrupt when IBB took over and we had no choice but to devalue.

Stop getting emotional about exchange rate parity, which can be fixed with re-denomination anyway, the real issue is maintaining a sound economy and sometimes that can be done by encouraging a weaker currency, ask the Chinese.
Re: Nigeria Exchange Rates To Dollar-history by paddylo1(m): 10:42pm On Aug 18, 2010
Re: Nigeria Exchange Rates To Dollar-history by paddylo1(m): 10:56pm On Aug 18, 2010
We had an overvalued currency in the 70s. Following the oil price crash in the late 70s and early 80s, the Naira had only one way to go, down. Those who blame IBB are clueless. This country was bankrupt when IBB took over and we had no choice but to devalue.

Stop getting emotional about exchange rate parity, which can be fixed with re-denomination anyway, the real issue is maintaining a sound economy and sometimes that can be done by encouraging a weaker currency, ask the Chinese.


u said it all. . .however. .its not just the people on here getting emotional about exchange rates. .

even our CBN governor was blaming IBB for introducing SAP the other day. . .which is kinda silly to me cause sanusi should know better

Bottom line there are lots of things I blame IBB for. . the needless killings and so on, .and his inability to drive an industrialization vision like suharto of indonesia

However Nigeria back then was living a lie. . .its like making the dollar 1 - 1 today and expecting chaos not to ensue

we were bankrupt like u said. . .importing all kinds of cheap goods cause of our artificially strong currency

it made no sense to manufacture anything in the country

so devaluation was the only option
Re: Nigeria Exchange Rates To Dollar-history by 4Play(m): 11:09pm On Aug 18, 2010
I posted this article a while ago
Perhaps the most important promise made by the new military leaders was to reopen stalled talks with the International Monetary Fund on rescheduling Nigeria's unmanageable foreign debt, now estimated to be $22 billion to $25 billion. Half of all Nigeria's annual oil revenues ($12.4 billion in 1984), which account for 95% of its total export earnings, are believed to be sucked up by interest payments on the debt. Moreover, as the world price for crude oil has declined over the past four years, Nigeria's revenues have been cut in half. Buhari had been seeking an IMF loan of $2.5 billion to $3.5 billion to help deal with the growing economic crisis, but he had refused to accept the international agency's demands that Nigeria first devalue its currency, the naira.

During the 1970s, on the strength of its oil revenues, Nigeria launched ill- planned, multibillion-dollar public works projects, such as the construction of a proposed new capital city at Abuja and numerous petrochemical plants. When the country's foreign debt ballooned, many of these were left unfinished. Once Africa's leading food exporter, Nigeria became a net importer as farmers abandoned the land for the promise of lucrative jobs in the oil industry. As a result, shortages of basic commodities quickly developed. The Shagari regime's tolerance of corruption only added to the country's woes. In 1983 alone, according to Oil Minister Tam David-West, $1 billion in petroleum was secretly diverted from state oil terminals to foreign tankers, with Nigerian businessmen and politicians taking the profits. Some reports say $1 million a day was skimmed from the public treasury. Transport Minister Dikko reportedly amassed a $1 billion fortune, much of it outside the country.



[url]http://www.time.com/time/magazine/article/0,9171,959779-1,00.html#ixzz0wzu6PiHj[/url]

When you reach the point where half of the Govt revenues are spent on debt repayment, you can forget about maintaining parity with the dolllar. Who borrowed all that money and failed to protect the country against the eventual collapse in oil prices? Blame Shagari, OBJ, MM & Gowon.

even our CBN governor was blaming IBB for introducing SAP the other day. . .which is kinda silly to me cause sanusi should know better

Bottom line there are lots of things I blame IBB for. . the needless killings and so on,  .and his inability to drive an industrialization vision like suharto of indonesia

Sanusi was probably playing to the gallery. IBB was a thieving murderer but Nigerians err in thinking that because he happened to be President when the bill for our earlier spending binge had come due, he was somehow to blame for the economic collapse. It's like Americans who now blame Obama for economic problems he inherited.
Re: Nigeria Exchange Rates To Dollar-history by Kobojunkie: 11:56pm On Aug 18, 2010
4 Play:

We had an overvalued currency in the 70s. Following the oil price crash in the late 70s and early 80s, the Naira had only one way to go, down. Those who blame IBB are clueless. This country was bankrupt when IBB took over and we had no choice but to devalue.

Stop getting emotional about exchange rate parity, which can be fixed with re-denomination anyway, the real issue is maintaining a sound economy and sometimes that can be done by encouraging a weaker currency, ask the Chinese.

Is having a weaker currency really working for us at this point? With all the development that needs to be handled, are we not better off with a stronger naira since we still import over 80% of what we use?
 
Re: Nigeria Exchange Rates To Dollar-history by Fhemmmy: 2:17pm On May 16, 2011
Nigeria has not seen any development . . . I mean Never.
Nigeria has nothing to offer and even their oil is only for the few that are close to the national cake.
So what do you expect will happen to our money?
Re: Nigeria Exchange Rates To Dollar-history by GenBuhari(m): 3:23pm On Jul 11, 2011
So why are we making Abacha out to be the biggest crook?
He never even devalued the Naira,   hold on, wasn't it chief thief OBJ that told us Abacha was worst looter angry


Let us get some perspective, the two people responsible for the state of diarray we find ourselves are

Babaginda - devalued Naira 1700% (also release all officials jailed for corruption by Buhari)
Obasanjo - devalued Naira 500% (during periods of sustained record oil prices)
Re: Nigeria Exchange Rates To Dollar-history by jamace(m): 7:15am On Sep 03, 2012
Kai, OBJ and IBB wounded the Naira beyond treatment. Too bad! angry
Re: Nigeria Exchange Rates To Dollar-history by TonySpike: 2:46pm On Sep 03, 2012
I think the real rot started during IBB's tenure. That guy's tenure led to a free-fall of Nigeria's economy!!!
Re: Nigeria Exchange Rates To Dollar-history by levelszik(m): 1:28pm On Jul 29
Chai,there's God ooooO

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