CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan - Business (2) - Nairaland
Nairaland Forum / Nairaland / General / Business / CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan (6329 Views)
CBN Stops Sales Of Forex To Bureax-De-Change / Nigeria’s Gas Reserves To Last 79 Years – DPR / FG To Convert Federal Reserves To Chinese Currency (2) (3) (4)
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by 2bosun: 6:24pm On Sep 05, 2011 |
Yeske!: It's a good move because China is a bit more insulated from the economic downturn right now but if the Chinese continue to devalue their currency against the dollar as they have done in the past it could backfire. The Naira pegged to the Dollar is a rubbish move because the value of the Dollar is dropping by the minute- saving our money in Yuan is completely different. If the Yuan rises- as it is looking likely to soon- the value of our reserves increase. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Daddi: 6:35pm On Sep 05, 2011 |
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| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by courage89(m): 6:36pm On Sep 05, 2011 |
This is a good move by the CBN. I think the Yuan has only one way to go, and that is up. This is predicated on the continuous pressure mounted on the Chinese by the world super power to appreciate their currency. Based on the believe that their currency lacks fundamental, and needs not to be manipulated. The value of the Yuan should reflect their continuous current account surplus, and growth. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by lagerwhenindoubt(m): 6:48pm On Sep 05, 2011 |
Daddi: Check Options -->About or Help and you will see the version |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by uche63: 6:51pm On Sep 05, 2011 |
good move. Can only recomend increase in the percentage allocation. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Onlytruth(m): 6:59pm On Sep 05, 2011 |
Hmm, on the surface may seen like diversification of assets, sort of not putting all your eggs in one basket, BUT. I don't want to put some of my eggs in the basket of a chameleon because I may not recognize my eggs tomorrow! Can someone in the house please tell me the REAL value of the Chinese Yuan?  If you don't know that, then, how can you trust it?  |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by kulutempa: 7:02pm On Sep 05, 2011 |
1stCitizen: Well said. The US Federal Reserve (equivalent to our central bank) led by Ben Bernanke has been printing US dollars to fight the recession in America and flood the economy with cheap money. They are effectively abusing the dollar's status as the world's reserve currency and there is therefore no point in holding on to such a currency that is being deliberately debased everyday. Much better to keep your money in currencies of growing and productive economies like China, or better still buy gold, which cannot be debased by Central banks. This move by Lamido Sanusi, is the sort of vision I wish more of our leaders have. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by PStacks(m): 7:03pm On Sep 05, 2011 |
This Sanusi guy is either dis smart or that close to a genius. China is the future, even American billioniars like warren buffets are investing in China. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Chubhie: 7:55pm On Sep 05, 2011 |
Go the way of Gaddafi! Gold! All these paper monies needs to be backed up with gold or possibly cowries. When will humanity ever be free from the very few who feel they can control the world? I sense a great awakeing. Just a thought. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Alinco20: 8:16pm On Sep 05, 2011 |
A very good move from the CBN,, but he should look b4 he leaps,,,,, To my understanding,,, the world will finally come into one currency by 2015,,,, |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by wasobia(m): 8:19pm On Sep 05, 2011 |
This is not a good move! The day the US, UK, France, Germany and those industrialized nations moved their workshop out of China, their doom begins. I am not sure if you guys know that their production capacity is more (in all ramifications) than their population. The shift is coming, no one really knows where it is going. Remember, those developed nations will forever have their relevance in the global field of the noble, they built the field and they maintain it. Its like a family of a generational rich man who passes inheritance from one generation to the other. Its possible one child messes up but the inheritance still speaks. Who is China? Whats yuan? Gold is far better than yuan, please correct me! Sanusi a big fool. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by femmy2010(m): 8:30pm On Sep 05, 2011 |
prettyG: Hope it is for the good of Nigeria and not i do this and you do that arrangement. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by kulutempa: 8:52pm On Sep 05, 2011 |
wasobia: You wanna bet? Why do you think they moved to China in the first place? Cheap labour, that's what. They realised that the high wages of their workers were such that they could no longer compete globally. Even if they move their factories out of China, the Chinese have learnt enough to build theirs, and produce goods more cheaply than the West. To use a Nigerian example, that is why all other things, being equal, you are better off setting up a nail factory in Ilorin, than one in Lagos because your production costs (land, wages) will be much lower. The West priced themselves out of the global market and the shift to the East in now irreversible. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by 2bosun: 8:55pm On Sep 05, 2011 |
wasobia: You're right but the price of Gold has started to drop after reaching an all-time high. If it were 6 months ago-yes but right now I believe the Yuan is a good bet. China has devalued their currency for so long that now the only direction it's going is up. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by JosephJon: 8:56pm On Sep 05, 2011 |
Chinese Yuan //Shame to Nigeria,I can remember when Nigeria's economy was ahead of China's but today we are diversifying to reserve their currency in our foreign reserves. Hell SHAME. Sanusi is really a stupid idiot who read economics without economics history. Please help me tell the stupid economist that U.S own 50% of the Chinese economy which will fall yakata by any economic measure taken by any U.S government to checkmate chinese economy. I am sure he has personal motives on this move and GEJ should do something very fast before he comes tomorrow and tell us''sorry'' we lost so,so $billion due to Chinese Yuan depreciation and inflation induced exchange rate globally for the yuan. What happened to GOLD reserve . Why good people will never see the light of handling the affairs of our great nation ?. Let me tell Sanusi that China's democracy is still shaking and the recent economic boom could rescind within a twinkle of an eye.Let him be wise. When U.S imposed special tariff on Steel from EU,all of us noticed what happened before it was lifted. Just one economic measure against china,yuan will become lesser than Naira and we lost Billion of dollars,any way Sanusi managed to belonged to the few elites,so if anything happens he is not affected like his colleagues in robbery in and outside Aso Rock and NASS. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by alhajiwada(m): 9:06pm On Sep 05, 2011 |
kosoro Canada Posts: 67 Offline Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan « #19 on: Today at 05:10:45 PM » This is another form of ISLAMIC BANKING!!! Seriously? Are you for real?? |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by kulutempa: 9:10pm On Sep 05, 2011 |
Joseph Jon: Really? Do you know who America's largest creditor is? Yes it's China. Read it here: http://www.creditwritedowns.com/2008/11/china-is-now-americas-largest-creditor.html If China stops buying US debt, it is in fact the US that will be checkmated. As it is said in the Bible, the borrower is the servant of the lender. China is living off the sweat of her workers, while America is living the high life on a credit card issued in China. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by occam(m): 9:12pm On Sep 05, 2011 |
How is this a good move? Looks more of a symbolic gesture than practical economic sense. China currently invests about $1.3 trillion in U.S. Treasury bond and continues to increase its holding. Why? U.S. is the largest and freest capital market and despite the S & P downgrade, U.S. T-bill is still a very safe and solid investment. So while China is investing in T-bills, Nigeria wants to diversify our reserve into Chinese yuan; a currency no one can determine its real value. The authorities in Beijing control capital flows and the exchange rate to remain competitive. The Chinese yuan is kept artificially low against dollar and other major currency to ensure its exports are very low. This is one of the reasons why goods from China are very cheap. Also, Chinese companies employs all kinds of anti-labour practices to keep prices low e.g. use of child labour in factories. We only need to look at the shady practices of Chinese companies in Nigeria and pause before investing our foreign reserve in such an economy. China is a very closed economy where information flow is restricted. We'll never know when the economy is tanking before its too late. Frankly, some of the rosy predictions on the Chinese economy is based on manipulated data from Beijing. Sanusi needs to think about this move carefully and longer term implications for our economy. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Remii(m): 9:20pm On Sep 05, 2011 |
Chubhie: That may be dangerous oo. I can almost guarantee that as soon as that happened the West may want to change Naija govt immediately. Sadam did it he didn't last tat year, Gadaffi you know. Moving away from USD without good tactics may likely be treated as act of war by the US. Watch it, Libya may go back to USD very soon. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by macroworld: 9:38pm On Sep 05, 2011 |
While it is good to diversify its foreign reserves, it needs to be approached with caution. There are few financial analysis emerging that Chinese Economy might be having some Hick-ups. On the other hand, the Chinese Government deliberately keeps its currency low for competition. Could we recollect that around 18 months ago or so Obama was really putting pressure on the Chinese regarding the low value on their currency because of the negative impact on US exports. On the other hand, the US economy might be experiencing some inflationary issues down the line, thus it is rational to diversify if you have currency reserves in dollars. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Nobody: 10:01pm On Sep 05, 2011 |
Sounds like a step in the right direction. A significant portion of our imports save cars and possibly refined petroleum products come from China - Igbo Kwenu!!! Over the next few years as China wrestles the remnants of economic and political supremacy from the US, there will be a lot of currency devaluation, manipulation and all the other "tions". To reduce the effect of this power tussle on Nigeria, it is only sensible to denominate the reserves in the Yuan . . . and I suspect it will be more than the 10% announced. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Nobody: 10:30pm On Sep 05, 2011 |
kulutempa: Bang on! The West was all book and no common sense and they are now paying a heavy price for their unbridled obsession with that nasty buzzword - outsourcing. Just a few years ago business leaders were harping on outsourcing and even bandied about a meaningless catchphrase -focus on your core business and outsource the non-core. Just how the Chinese and Indianc managed to convince these smart and intelligent business leaders that manufacturing was a non-core business and thus eligible for outsourcing is a puzzle no one might never unravel. The rest as they say is history and businesses made short term profits, paid taxes to government who also got onto the outsourcing bandwagon but eventually ran out of money to make welfare payments to countless unemployed people who were victims of outsourcing. And forget all the headline diplomacy about engaging with America - I do business with them and know their views on America - if it comes to that, they will make sure the shift to the East is irreversible. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by kulutempa: 11:57pm On Sep 05, 2011 |
DJTee: @DJTee, thank you very much. You know, it is always sad and painful to realise that in Nigeria, we don't even have a clue at the great strategic economic and political game being played out right before our eyes, and how much we stand to gain if only we can sit down and focus on where we stand in the scheme of things. There is no reason why with a 150 million population, Nigeria cannot be the manufacturing powerhouse of sub Saharan Africa if only we create an enabling environment for this to happen. Unfortunately we have for too long been saddled with leaders who lack vision and are only interested in the spoils of office. However we can start by demanding more from our leaders and making them more accountable to us. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by adisarasaq(m): 1:18am On Sep 06, 2011 |
That would be a good move if implemented. Everytime USA. USA this USA that and there's no good result. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by aribisala0(m): 4:16am On Sep 06, 2011 |
the chinese are holding 2 trillion dollars of US paper if anything happens to the dollar the yuan is not immune.not the right place to hide from the dollar. a bit like my 3 year old daughter when playing ; hide and seek, she aways shouts out where she is , in short she does not understand the game but it is right to diversify and 5-10% is not unreasonable. another thing is this tendency for western nations to freeze assets at the drop of a hat. if civil war breaks out in naija. first the reserves are frozen and then handed over to boko haram or MEND,OPC,MASSOB etc. we should also consider brazillian currency and gold |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Kossy04: 1:55pm On Sep 06, 2011 |
Really? Do you know who America's largest creditor is? Yes it's China. Read it here: http://www.creditwritedowns.com/2008/11/china-is-now-americas-largest-creditor.html You don't strike me as one with an understanding of the politics of international economics. Look at it this way; You and I are the two wealthiest in the village, and we're sworn enemies. Together, we own almost all the land in the village. I have lots of people working for me, but I spent too much money fighting for people I had no business fighting for. And then, the top executives of the money-yielding ventures I had got greedy and spent more than what I was paying them in my name. On a good day, I would've just ripped out a stash of money and payed off all the creditors, but I lost too much in the various fights I was engaged in that I can't conveniently do that anymore. I'm now in debt. On the other hand, you haven't spent foolishly, and you discipline your workers by KILLING the greedy ones so much that none of them would dare mess with your money. Business is good. Although you're making about the same type of profit that I make on a good day, you don't have MASSIVE AMOUNTS of people you're owing, as I do. You see this as an opportunity to invest your profits. You can't buy more land - I own most other, and I won't sell to you, because I HATE YOU! You can't buy me, I won't sell to you, because I HATE YOU! What else? Give me money to pay my creditors, and charge interest on that sum. It's an agreement - you give me money and stipulate when it'll be paid back, and I'll accept your offer, as I have no other choice. It's an investment, as long as you're getting the money and interest on you money. But you want to invest some more, what other way can your GREEDY A.S.S invest? The truth is, in this village, I'm the only one that can give you what you want; the only one who balls on the same level as you. So what do you do? You keep giving me money. You're not giving me money to do business, you're paying my creditors for me. If I say to you, "You know what? I made a mistake going to that fight. Now, I want to get my act right. I want to save up and start all over again. Don't pay my debt anymore, let my creditors wait till I start making profit ," what do you think will happen? You'd have to look for other ways to invest. Unfortunately, there are no other SURE AND STEADY ways for someone of your statue. So, you let your money rot under the ground, or you leave it in the bank to give you the type of interest you're not used to. At the same time, business is becoming more and more complex, and you need more and more hands. Soon, when I get my enterprise back to shape, I'll be competing with you for the market again, and then business won't be so good for you anymore, because now you'll have a much higher cost than you used to without enjoying the market you used to. Then, all that excess money that you left without allowing it birth more money for you will just become a part of the money for running your expenses, and you won't really have excess again. Yes, the US is currently going down the toilet, no doubt, but if they are serious, they can get back on their feet. But how long will China continue balling on the level they're on now? China's only strength is human resource. What will become of them when India rises, and other countries rich in human resources like Brazil and Nigeria rise? The Americans are busy creating natural resource oriented "friendships" {see the case of Libya}, while China is making natural resource oriented enemies {also see the case of Libya}. Even after human resource propelled economy rises, these people will still have a steady flow of natural resource propulsion. Please, that homeboy made a BIG MISTAKE on this, if indeed IT WAS A MISTAKE!. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by Kossy04: 2:30pm On Sep 06, 2011 |
slam on! The West was all book and no common sense and they are now paying a heavy price for their unbridled obsession with that nasty buzzword - outsourcing. I do not agree with you. You don't seem to understand the challenges that were thrown at the Americans by the Japanese and the Koreans. Look at it this way; Cost of living in Japan is calculated by Yen which is significantly lower in value to Dollars {app. 80 to 1 Dollar}. In a typical American factory, a person earns, at least, 50 Dollars a day. Use Nigeria as an example; can you pay your factory worker 8,000 a day {240K} a month? Na banker? Now replace the Naira with Yen {from a Nigerian point of view}. At the end of the day, Cost of Production in Nigeria will be far lower than in the US. And then, we export things produced in Nigeria, which is very similar in quality to things produced locally in the US, to that same US. The average consumer will take a look at both, with similar quality but greatly differing prizes, and go for the Nigerian made. The Americans will also want to cut costs, or else they'd just stand by and watch as they loose their own markets. They cannot devalue their currency like the Japanese, so many countries are reliant on it, and that'll simply be disastrous. How will they cut costs? By continuously manufacturing in America? |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by occam(m): 3:56pm On Sep 06, 2011 |
DJTee: So buying Yuan bond is a smart move when even the Chinese have more confidence in U.S. bonds as a safe haven compared to their own unverifiable Yuan. What exactly is the Yuan worth? Besides, the lifeblood of the Chinese economy is the U.S. Visit any Walmart store and you’ll begin to understand why China is totally dependent on U.S consumers Why don’t we develop our own local industries and encourage export instead of buying Yuan bonds? China is simply looking for more market to dump its low quality products; hence the reason it’s opening up the tightly controlled bond market to gullible African countries. China has a very weak consumer market, totally dependent on exports to Europe and the US, currency is artificially pegged lower than the dollar and still one of the poorest countries in the world. All this talk about Yuan becoming an international currency is wishful thinking. |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by aurenflani: 7:21pm On Sep 06, 2011 |
what happen to libyan 150 ton gold in their reserve ce any guise? |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by carlinks: 7:42pm On Sep 06, 2011 |
am not a student of Economics so i can't understand somethings, if the USA Federal Reserve has been printing money thereby devaluing the Dollar,why has the Naira not appreciated against the Dollar? Naira still exchanges close to 160 over the counter against the dollar |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by aribisala0(m): 11:42pm On Sep 06, 2011 |
there is a problem with gold reserves you have to keep the gold somewhere.this is quite a challenge from a security perspective. even germany keeps its gold in new york. ditto for venezuela . |
| Re: CBN To Switch 5-10% Of Forex Reserves To Chinese Yuan by JamesDoe: 11:42pm On Sep 06, 2011 |
^^^^^ a very good question, Naira/$ rate is controlled by CBN within a band/range. The current devaluation of $ and £ due to the global economic crisis has allowed the crashing of the Naira to be masked. The minimum wage, elections and new political order has to be paid for somehow. Ordinarily, as Nigeria is a net importer of goods and an exporter of Oil, you would expect the Naira (and our $ reserves) to rise and fall fairly in line with the oil price. Oil represents c$50bn of Nigeria's $300bn GDP and is our main generator of $ reserves. |
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