Over the years, we've been made to beleive that demand and supply is the key factor determining the exchange rate.

Oil which is Nigeria greatest source of foreign exchange fell down in price back in 2015/2016 it fell to a low of about $28 per barrel. Instantly our Naira fell to about half its worth.
From 190 to 360 but as at 2017/2018 we recorded positive increment in oil price to about $65 per barrel yet no subsequent increase in price.

Covid-19 came to place. Meaning no demand for foreign products, less use of dollar, yet no appreciation.

Does it mean it's impossible for Naira to appreciate?
Unlike previous years, we know our demand for foreign products has reduced but no positive subsequent change in currency. Instead it keeps falling.
In fact I could remember a year when the dollar crashed a bit nothing changed in Naira.

Who ever designed the foreign exchange policy is a fraudster and must be washed off completely otherwise no developing country would ever develope with such traits.

My observations though..

immediatly Baba go slow added those 41 items to ban list. dollar went up and has never come down

Because with Nigeria it's one step forward, two step backwards....war ina babylon!

the dollar is backed by he US gold reserves, the dollar is a promissory bank note stating you have old worth a dollar or a million dollars in the American gold reserve,
the nairaaaa............... like you have a toilet paper and you had wiped your ass and still keeping it to wipe again for a next round.
no backings just a show for, little or no value

godofuck231:
the dollar is backed by he US gold reserves, the dollar is a promissory bank note stating you have old worth a dollar or a million dollars in the American gold reserve,
the nairaaaa............... like you have a toilet paper and you had wiped your ass and still keeping it to wipe again for a next round.
no backings just a show for, little or no value

But who confirmed the gold

That's not how it works.

Since the dollar is d
Commonly agreed base for international transactions.

The more dollars you can retain in the economy, the higher the value of your currency.

But look around you, does it look like we produce anything in this country.

A visit to computer village will give you a better insight. Almost 60-70% of the goods sold there are imported. With what? The dollar. So in essence, we bring in dollars, but we also push it out in form of Imports.

northbird:
That's not how it works.

Since the dollar is d
Commonly agreed base for international transactions.

The more dollars you can retain in the economy, the higher the value of your currency.

But look around you, does it look like we produce anything in this country.

A visit to computer village will give you a better insight. Almost 60-70% of the goods sold there are imported. With what? The dollar. So in essence, we bring in dollars, but we also push it out in form of Imports.

how about this covid era when the dollar demand is low as little case of import is recorded?

if it were the other way, if won't take days for Naira to depreciate..

northbird:
That's not how it works.

Since the dollar is d
Commonly agreed base for international transactions.

The more dollars you can retain in the economy, the higher the value of your currency.

But look around you, does it look like we produce anything in this country.

A visit to computer village will give you a better insight. Almost 60-70% of the goods sold there are imported. With what? The dollar. So in essence, we bring in dollars, but we also push it out in form of Imports.

also, how comes Kuwait currency is stronger than the dollar? euros stronger than dollar and we hardly use euros??

the financial system doesn't favour developing countries..

northbird:
That's not how it works.

Since the dollar is d
Commonly agreed base for international transactions.

The more dollars you can retain in the economy, the higher the value of your currency.

But look around you, does it look like we produce anything in this country.

A visit to computer village will give you a better insight. Almost 60-70% of the goods sold there are imported. With what? The dollar. So in essence, we bring in dollars, but we also push it out in form of Imports.

I disagree with this assertion........the Ghanaians do not produce quarter of what we produce and there currency is still firm against the naira and a little bit firm against the dollar. Before our dear bubu came the naira was firm against the dollar and we rely on imort even though we produce . So why is it so brother ?

Jazzafizzy:

I disagree with this assertion........the Ghanaians do not produce quarter of what we produce and there currency is still firm against the naira and a little bit firm against the dollar. Before our dear bubu came the naira was firm against the dollar and we rely on imort even though we produce . So why is it so brother ?

I've taught this out.
border closure should reduce import but no effect on Naira, covid-19 has reduced the demand for dollar, still it crashed from 360 to 390.

Economics don use us finish..

jumper524:
also, how comes Kuwait currency is stronger than the dollar? euros stronger than dollar and we hardly use euros??

the financial system doesn't favour developing countries..

Thank God some people are reasoning like me. Currency is the work of the cabals and economy is built on dollars. Even if ur currency is stronger than the dollars, it will not be more useful than the dollars, the question is why? For u as a 3rd world country to grow, u must disobey all the rules of money intelligently. China manipulates there currency and its one of the reasons US does not like them. I was in Oslo and they use Krone, so i asked why they dont use Euro at once, they said its been manipulated. For Naira to add any value, we must build an economy with Naira, manipulate it for Naira otherwise, e go soon turn tissue paper.

jumper524:
Over the years, we've been made to beleive that demand and supply is the key factor determining the exchange rate.

Oil which is Nigeria greatest source of foreign exchange fell down in price back in 2015/2016 it fell to a low of about $28 per barrel. Instantly our Naira fell to about half its worth.
From 190 to 360 but as at 2017/2018 we recorded positive increment in oil price to about $65 per barrel yet no subsequent increase in price.

Covid-19 came to place. Meaning no demand for foreign products, less use of dollar, yet no appreciation.

Does it mean it's impossible for Naira to appreciate?
Unlike previous years, we know our demand for foreign products has reduced but no positive subsequent change in currency. Instead it keeps falling.
In fact I could remember a year when the dollar crashed a bit nothing changed in Naira.

Who ever designed the foreign exchange policy is a fraudster and must be washed off completely otherwise no developing country would ever develope with such traits.

My observations though..

Let me correct this.

During the Corona virus, there has been demand for dollars.

Many multinationals and foreign investors have been keen on repatriating their money in dollars.

Besides, the locals have been desirous of converting their naira to dollars as haven, thereby reducing the value of the currency further.

Let's not even talk about hoarding of dollars.

I think this is enough to refute one of the claims in your post

jumper524:
I've taught this out.
border closure should reduce import but no effect on Naira, covid-19 has reduced the demand for dollar, still it crashed from 360 to 390.

Economics don use us finish..

I swear ,that na why I no dey like all this grammarian who talk and not walk there talk . Where I hate themi s that long chat they draw indicating how economy is fairing nd in the end nothing to show for it . Politicians re stealing , economic saboteurs re having a field day milking us . So who is fooling who now ?

godofuck231:
the dollar is backed by he US gold reserves, the dollar is a promissory bank note stating you have old worth a dollar or a million dollars in the American gold reserve,
the nairaaaa............... like you have a toilet paper and you had wiped your ass and still keeping it to wipe again for a next round.
no backings just a show for, little or no value

I would advise you read more on monetary policies of Federal Reserves. Dollar is not backed by gold reserves since 60's.

The entire monetary system is based on trust which is not backed by any valuable treasures

Goddys:


I would advise you read more on monetary policies of Federal Reserves. Dollar is not backed by gold reserves since 60's.

The entire monetary system is based on trust which is not backed by any valuable treasures

I would advice you found why the us ousted gadaffi out of power for accumulation of gold reserves larger than that of the us reserve and trying to implement a unified African currency of gold as paper money is actually as good as toilet paper, he was willing to sell Libyan oil for nothing more than gold , against' his promise for nothing else than the dollar, the only currency that's actually valuable was gold.

godofuck231:

I would advice you found why the us ousted gadaffi out of power for accumulation of gold reserves larger than that of the us reserve and trying to implement a unified African currency of gold as paper money is actually as good as toilet paper, he was willing to sell Libyan oil for nothing more than gold , against' his promise for nothing else than the dollar, the only currency that's actually valuable was gold.

You need to gain understanding. US dollar is not backed by Gold. They left gold standard in 1966. That's why Gadaffi rejected USD because it has no intrinsic value

Goddys:


You need to gain understanding. US dollar is not backed by Gold. They left gold standard in 1966. That's why Gadaffi rejected USD because it has no intrinsic value

you cannot learn ,it is clear

Hmmmm, as for me I don't have time to study the intricacies of exchange rate or the worthless naira.

My own is to think of how to earn Dollars, Pounds or Euros so that I can enjoy the system, I am tired of been disadvantaged....

babakb:
Hmmmm, as for me I don't have time to study the intricacies of exchange rate or the worthless naira.

My own is to think of how to earn Dollars, Pounds or Euros so that I can enjoy the system, I am tired of been disadvantaged....

funny you man..
let's just use the us-dollar as official currency then..

jumper524:
how about this covid era when the dollar demand is low as little case of import is recorded?

if it were the other way, if won't take days for Naira to depreciate..

It'll take Nigeria many hundreds of years to get to the ranks of America. It's a function of what Ur GDP is worth. That being the case, what affects America once will affect 100 times.

ihemyoro:

It'll take Nigeria many hundreds of years to get to the ranks of America. It's a function of what Ur GDP is worth. That being the case, what affects America once will affect 100 times.

hope GDP is not considered in exchange rate?

every developing country currency is always loosing out against the dollar..
why??

S.A is on a falling spree lately..

jumper524:
Over the years, we've been made to beleive that demand and supply is the key factor determining the exchange rate.

Oil which is Nigeria greatest source of foreign exchange fell down in price back in 2015/2016 it fell to a low of about $28 per barrel. Instantly our Naira fell to about half its worth.
From 190 to 360 but as at 2017/2018 we recorded positive increment in oil price to about $65 per barrel yet no subsequent increase in price.

Covid-19 came to place. Meaning no demand for foreign products, less use of dollar, yet no appreciation.

Does it mean it's impossible for Naira to appreciate?
Unlike previous years, we know our demand for foreign products has reduced but no positive subsequent change in currency. Instead it keeps falling.
In fact I could remember a year when the dollar crashed a bit nothing changed in Naira.

Who ever designed the foreign exchange policy is a fraudster and must be washed off completely otherwise no developing country would ever develope with such traits.

My observations though..

First of all, there is nothing wrong with the exchange rate policy... The reason why Naira does not appreciate as dollar is very simple.

Naira is made to chase dollar, and when that happen the naira will lose value against the dollar.
Nigeria produces in large quantity only crude oil and exports virtually almost every other commodity it consumes, so it is just like selling 1 and buying 99 other goods.

Here is a good example, dollar is running, and naira keep chasing dolla (using dollar to buy foriegn goods), dollar will feel strong and it ego will raise while naira feel weak and ashamed.

Now if Naira stop chasing dollar and turns back (producing an consuming more local goods) dollar will also stop running and ask naira why it stop chasing it, at this point dollar will start following naira to and naira's ego will raise and it value will also raise.
The point is this... Nigeria must increase production and consumption of local goods and reduce dratically the importation of foriegn goods thereby using less of dollar.... I hope this helps.

Saintinoo:

First of all, there is nothing wrong with the exchange rate policy... The reason why Naira does not appreciate as dollar is very simple.

Naira is made to chase dollar, and when that happen the naira will lose value against the dollar.
Nigeria produces in large quantity only crude oil and exports virtually almost every other commodity it consumes, so it is just like selling 1 and buying 99 other goods.

Here is a good example, dollar is running, and naira keep chasing dolla (using dollar to buy foriegn goods), dollar will feel strong and it ego will raise while naira feel weak and ashamed.

Now if Naira stop chasing dollar and turns back (producing an consuming more local goods) dollar will also stop running and ask naira why it stop chasing it, at this point dollar will start following naira to and naira's ego will raise and it value will also raise.
The point is this... Nigeria must increase production and consumption of local goods and reduce dratically the importation of foriegn goods thereby using less of dollar.... I hope this helps.

going by your explanation, Naira chases the dollar right?
does Chinese yen chases the dollar also?
also how comes the euros and Kuwait currency is more stronger than the dollar? or does the world demand the Kuwait currency more than the dollar?


in 2015 we experienced sharp fall in Naira to dollar, largely to our low oil output @$28 per barrel, low reserve at 27billion, large level of importation. but in 2017 things changed, oil output improved to $65 per barrel, importation of foreign products was at a all time low since 2011, foreign reserve went up to 37billion.
all these things happened yet nothing to show for.

pls do pardone my ignorance as am not a full time economics student.
but if you can explain my questions to me better, I'll appreciate.

jumper524:
I've taught this out.
border closure should reduce import but no effect on Naira, covid-19 has reduced the demand for dollar, still it crashed from 360 to 390.

Economics don use us finish..

Dear, economics didn't use anybody, there are some technicalities in econonomics you won't understand. Is just like going on self medication and ignoring the advice of doctors.

Saintinoo:

Dear, economics didn't use anybody, there are some technicalities in econonomics you won't understand. Is just like going on self medication and ignoring the advice of doctors.

Finance policy in economics should be scrapped then since its not Fair and can not be openly explained to its partakers.
batter system works better.

Goddys:


You need to gain understanding. US dollar is not backed by Gold. They left gold standard in 1966. That's why Gadaffi rejected USD because it has no intrinsic value

Abeg leave him, he base his argument on polical rumours.

jumper524:
Finance policy in economics should be scrapped then since its not Fair and can not be openly explained to its partakers.
batter system works better.

Should surgry be scraped because doctors won't tell us the procedure to carry out one?

The basis of monetary policy is there for you to read but not everyone will understand how it works, study the economies of countries is not easy, for all these nairaland economist pasting articles everywhere.

Saintinoo:

Should surgry be scraped because doctors won't tell us the procedure to carry out one?

The basis of monetary policy is there for you to read but not everyone will understand how it works, study the economies of countries is not easy, for all these nairaland economist pasting articles everywhere.

kk I'll take my time to study.
I've gat so much interest on this issue.

pls are you an economics student?

jumper524:
kk I'll take my time to study. I've gat so much interest on this issue.
pls are you an economics student?

yes sir,

godofuck231:
you cannot learn ,it is clear

mr man stop talking out of ignorance. the us dollars is not backed by gold. every country has its own gold reserve. dollar is just as worthless as naira. it's just a promissory note. pls stop this ignorance

lugado:


mr man stop talking out of ignorance. the us dollars is not backed by gold. every country has its own gold reserve. dollar is just as worthless as naira. it's just a promissory note. pls stop this ignorance

Gold has a profound impact on the value of world currencies. Even
though the gold standard has been abandoned, gold as a commodity
can act as a substitute for fiat currencies and be used as an
effective hedge against inflation. There is no doubt that gold will
continue to play an integral role in the foreign exchange markets .
Therefore, it is an important metal to follow and analyze for its
unique ability to represent the health of both local and international
economies .
why did the nazi government during world war 2 use gold as currency when the Dutch mark fell, they sent a u-boat loaded with gold and another with uraniumto Japan to create a nuke bomb, sadly it was intercepted and the uranium used in Hiroshima and nagasaki
please you have done well, you won, please I take my leave

godofuck231:
the dollar is backed by he US gold reserves, the dollar is a promissory bank note stating you have old worth a dollar or a million dollars in the American gold reserve,
the nairaaaa............... like you have a toilet paper and you had wiped your ass and still keeping it to wipe again for a next round.
no backings just a show for, little or no value

Several factors contribute to a country's currency value: GDP, current account balances, reserves (gold), interest rates, etc.