Any Hope For The Naira?

  Nairalanders, is it feasible for the naira to gain ground against other currencies in the nearest future? It's really affecting those of of that are sending money abroad, i hope it goes back to the wat it was.

Can't believe this, Let's wait and see.

@ The Dude

Men, Thanks for your advice. It's nice having some good point from you. 

Let’s face it, economic indicators globally are deeply troubling and the recent devaluation of the naira is no good sign at all. My worry in our country is the financial sector, particularly the banking industry.

We all know last year stock prices plummeted for most banks (e.g. Zenith, First and PHB all reported new 52 week lows for 2008) and speculations are that the downtrend may be sustained for a while.

 
Would the implementation of federal government bailout packages like the US system work in Nigeria?  This would imply capping incentives to bank CEOs, government taking over the losses, encourage more consumer spending, etc.


While I am no economist, I think I know Nigeria and would say it would be a hard sell without accountability, plus most systems in Nigeria work more efficiently under privatization than under government-controlled basis.

 
However, on a side note, imagine, if the stimulus package was utilized even by certain banks in the US to throw parties, what do you think would happen in our owambe-system?


Personally, I’ld brace up for insolvency (^{for me, this involves the conversion of personal funds to the dollar until the naira stabilizes}) it’s all a matter of time.  I anticipate mergers especially from the new generation banks in the near future but the cookie looks definitely crumblin real soon.

We need radical intervention from a few smart economists now!!!

You see the system in America differs from Nigeria’s because our housing market for instance isn’t a major economic measure, and we dont do much credit on that regard.

Needless to say we are actually doing quite well in this area.

However, Nigeria's over-dependence on crude oil supply makes our economy solely reliant on the state of this market.

Here is this for a thought-----a barrel of oil which sold for $150 last year now sells at an estimable $45. Funnily, this oil is globally traded in US dollars, meaning for you to conduct business in this area you have to have the American currency.

This to me spells a double whammy for us------American in recession, so also is there a dip in price for crude oil.     

Till the recession is gone, and people start spending again, with more dollars made available to people, Naira has no chance

pls. what is the current value of the Naira aganist the Dollar

heheheeheh

But its good for us sending money to naija . . . . . .

Different strokes for different folks.

BTW ,why would anyone be sending money abroad 

Present and Future impact need to be considered

Maybe to pay for your kids tuition.

By the way, currency devaluation could be a great thing if nigeria were an export economy like china and japan (remember its because of the devaluation of the yena and the yuan, chinese and american companies are about to put there american counterparts out of business) but it isn't unfortunately, soludo can solve the problem by reducing the money supply which would consequently increase interest rates and this high interest rate would make nigeria very attractive to the nigerian economy who want a higher rate of return on there investments.

Sorry to burst your bubble but that figure is in your imagination. The actual exchange rate is 147.00 naira. I think you need to work harder if you're to complete that project you have in 9ja.
LMAO!

Was 150 naira this morning

 
IMF warns of slow African growth
The International Monetary Fund (IMF) has warned that Africa's economic growth will be affected by the continuing world downturn.

It predicts that growth in sub-Saharan Africa will slow to 3.25% in 2009, half the growth rate it previously thought.

The slump in commodity prices and the credit squeeze are the main culprits, the IMF said.

The report comes ahead of a major IMF conference on Tuesday in Dar-es-Salaam, Tanzania, to discuss how to respond.

The conference will discuss what external support the IMF and other Western donors may be able to provide to help mitigate the impact of the crisis on Africa, which has the highest poverty rate of any region in the world.

The IMF's managing director, Dominique Strauss Kahn, told the BBC that the conference would be a "milestone" and that he wanted to build a different kind of partnership with Africa, as well as providing additional funds.


CRUNCH TIME FOR AFRICA

World leaders will meet next month in London to discuss measures to tackle the downturn. Click here for to the G20 summit.
Only one African country will be represented at summit - South Africa
This week BBC World News and World Service Radio will be examining how Africa is coping with the crisis, with reports from around the continent

In recent years, many African countries have enjoyed strong growth rates, boosted by rising commodity prices, including oil.

"The gains of the past decade, during which many countries in sub-Saharan Africa saw sustained high rates of economic growth and rising income levels, are at risk," said Antoinette Sayeh, the IMF's African department director.

Less than a year ago, the IMF's forecast for sub-Saharan Africa was economic growth of 6.7% in 2009, an increase on the 5% growth enjoyed in 2008.

Now the low growth forecast means that many African countries are likely to see very little increase in living standards, and could fall further behind in meeting poverty targets.

It says that 15 of the 21 countries which it judges most vulnerable to the crisis are in Africa.

Widespread impact

The IMF says that many countries will not have the funds to protect the poor from the affects of the downturn and may need external help.

"While African policymakers are rising to this unexpected challenge, donors must also play their part. They must maintain their commitments and scale up, not scale back their support," it says.

Africa has little direct exposure to the credit crisis. Its banks have not invested much, if at all, in the problem financial assets at the heart of the crisis.

But the global downturn has undermined demand for many industrial commodities, which are important exports for several African countries. - including oil in Nigeria, Angola and Equatorial Guinea, and copper in Zambia.

Africa is also likely to be hit by reduced financial flows from abroad, including fewer remittances and less foreign direct investment.

However, providing more aid could prove controversial.

The IMF itself is expected to ask for a substantial increase in its funding at the G20 summit of world leaders in London next month.

But it is not certain such additional funds will be forthcoming.

As the IMF itself points out, historically foreign aid declines during an economic downturn.

Why would any rational person expect the naira to bounce back?
With badly selling crude oil as our only major export, and subsequent near depletion of our foreign reserve to an all time low; why would anybody expect for the naira to appreciate

CBN MAINTAINS EXCHANGE RATE At N144-150 to dollar
By Mojeed Jamiu, Deputy Editor, Daily

The Central Bank of Nigeria (CBN) on Monday reiterated that the official exchange rate has ranged from N144-N150 to $1 since mid-January.



 

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A statement the CBN issued on Monday night noted that the exchange rate quoted above represents about 95 per cent of legitimate foreign exchange (forex). However, Bureau the change rates have continued to slide to as high as N180 to the Dollar.

The CBN noted that the objective of the current forex rate policy is to conserve foreign reserves and ensure stability of the exchange rate system.

"So far, we are succeeding and the outflow of foreign exchange has reduced by more than 50 per cent. The policy will ensure that even if the global crisis lasts for the next three years, Nigeria will continue to meet all legitimate foreign exchange demand at a stable exchange rate," the statement said.

Other complementary on-going reforms will significantly affect the parallel/black market exchange rate soon. Once the global crisis abates, the Naira is expected to strengthen.

The CBN Monetary Policy Committee (MPC) had in a recent meeting taken measures to inject liquidity into the banking system as part of strategy to minimise the effects of the global credit crunch on the banks and the economy at large.

CBN Governor, Chukwuma Soludo, has also often warned of the likely inflationary impact of the liquidity injection, and also put forward proposals on how Nigeria can weather the global crisis, including the key legislations the National Assembly needs to pass urgently.

He has been invited to several fora to answer mostly two questions.

First, are Nigerian banks safe or do they require any bailout? Second, are Nigeria's foreign reserves safe?

To the first question, Soludo has been consistent in stating that because Nigeria moved ahead of the world to recapitalise and consolidate its banking system, its banks are robust enough to take losses and are protected from the full effects of the global financial system.

He has repeatedly assured that the CBN would take all necessary measures to ensure that Nigerian banks do not fail like their counterparts elsewhere.

To the second question, he has also consistently reassured that the foreign reserves are safe.

There's an official rate and there's the real rate. The average depends on the real rate, ie about 180 today