obailala:

Who dey deplete our reserves?... it is you and I who prefer to buy 'made in UK' handkerchief with $5 instead of the one made in Aba for N50.

The nation is presently suffering from what is termed a 'negative balance of trade'. Before now, let's assume the total amount of forex leaving Nigeria per month was $10billion (this amount includes money spent importing fuel, food, clothes, foreign school and medical fees, you $5 handkerchief etc), this forex outflow of $10bn is balanced by a forex inflow of $10bn or more mainly from oil sales. Today the proceeds from oil sales has fallen by 70%, but our taste for foreign goods has obviously not changed. So today we are getting inflow of only $3bn but still spending $10bn. This is the negative balance of trade which is reducing the reserves.

To manage this crisis and prevent reserves from reaching zero, cbn has totally stopped releasing forex to banks and BDCs which help people like yourself who want to buy a mere handkerchief; except you can prove that you want to purchase an essential commodity like import fuel or rice etc, the cbn will not release its scarce forex to you. So the forex which your bank sold to you for N350 was not gotten from cbn, it was from the blackmarket. The blackmarket guys get their forex from diverse sources (including raw cash from people who return from diaspora). The scarcity of forex in the open market is the reason why it sells for up to N350 or N400.

Cc: olamonsor2

The present tools government is using is causing mayhem in the economy. They have proven to be blunt and highly ineffective shortchanging almost everyone. The best indicator of this is that a bag of pure water is now 100 naira.

The proper thing to do is to allow the currency depreciate to its real value based on the present forex earning so that the government can provide enough forex to everyone who demands it.

GEJ allowed the currency to depreciate snd that is why is why despite oil prices falling from $118 to $45, the naira fell from 165 to 210.

It is the opposite with PMB who said he won't allow the currency to depreciate from day 1. That is why there is so much bedlam.

Uchefrancis16:
Permit my ignorance.

If they bought from the black market at say 300 and sell at 350. why then do they pay 198.5 to us receiving money from AdSense? Is that not dubious? They will be making gain of over 150 per 1$

some1 is making sense

magicminister:
I only have 2,000 naira on my zenith bank account and i made a 5 dollar transaction only to be charged 1700 naira.
This implies that zenith bank sold each dollar at the rate of 350 NAIRA.
Yet, the central bank sells dollar to these banks at the rate of 190-199.

This is crazy and greedy!!!!

Your transaction does not qualify for forex from CBN. You don't know where the bank got its dollars from and how much so you can't blame them. If you want to buy at the official rate, go to your bank and fill the necessary forms.

it sounds crazy my brother, but GTB, Stanbic IBTC and Diamond Bank charged me closed to that amount find out the reason here: http://www.talkasset.com/why-nigerian-banks-are-selling-forex-at-parallel-market-rate/#.Vsnix7QrLIV

grandstar:


The present tools government is using is causing mayhem in the economy. They have proven to be blunt and highly ineffective shortchanging almost everyone. The best indicator of this is that a bag of pure water is now 100 naira.

The proper thing to do is to allow the currency depreciate to its real value based on the present forex earning so that the government can provide enough forex to everyone who demands it.

GEJ allowed the currency to depreciate snd that is why is why despite oil prices falling from $118 to $45, the naira fell from 165 to 210.

It is the opposite with PMB who said he won't allow the currency to depreciate from day 1. That is why there is so much bedlam.

GEJ allowed the naira to depreciate to about N197 and not 210. Depreciation does not increase the amount of dollars in our reserves. It only makes it more expensive for those who buy dollars. If they don't mind paying more for the dollar(as is currently happening), why depreciate?

obailala:
CBN doesnt sell dollars to banks anymore, zenith got your dollars from the blackmarket.

whoever told you this is deceiving you

magicminister:
I only have 2,000 naira on my zenith bank account and i made a 5 dollar transaction only to be charged 1700 naira.
This implies that zenith bank sold each dollar at the rate of 350 NAIRA.
Yet, the central bank sells dollar to these banks at the rate of 190-199.

This is crazy and greedy!!!!

o boi you no hear say na 382 e dey for parallel market, c'mon find person sell am give.

obailala:

Who dey deplete our reserves?... it is you and I who prefer to buy 'made in UK' handkerchief with $5 instead of the one made in Aba for N50.

The nation is presently suffering from what is termed a 'negative balance of trade'. Before now, let's assume the total amount of forex leaving Nigeria per month was $10billion (this amount includes money spent importing fuel, food, clothes, foreign school and medical fees, you $5 handkerchief etc), this forex outflow of $10bn is balanced by a forex inflow of $10bn or more mainly from oil sales. Today the proceeds from oil sales has fallen by 70%, but our taste for foreign goods has obviously not changed. So today we are getting inflow of only $3bn but still spending $10bn. This is the negative balance of trade which is reducing the reserves.

To manage this crisis and prevent reserves from reaching zero, cbn has totally stopped releasing forex to banks and BDCs which help people like yourself who want to buy a mere handkerchief; except you can prove that you want to purchase an essential commodity like import fuel or rice etc, the cbn will not release its scarce forex to you. So the forex which your bank sold to you for N350 was not gotten from cbn, it was from the blackmarket. The blackmarket guys get their forex from diverse sources (including raw cash from people who return from diaspora). The scarcity of forex in the open market is the reason why it sells for up to N350 or N400.

Cc: olamonsor2

This is the first time I'm understanding this negative balance of trade stuff.


Thanks

magicminister:


Really??
so, the cbn sell to the black market in order for the banks to buy from the black market!!...
tell me somechin!!

the guy you replied is a bloody liar

obailala:
CBN doesnt sell dollars to banks anymore, zenith got your dollars from the blackmarket.

Haba,say what you know

obailala:
Its okay.
The fact is that if we have a full understanding of the current situation of things, we would understand it has nothing to do with buhari. A man who earns 100k and finds it hard to feed his 5 children, imagine what will happen when his salary is cut to 30k? I'm sure you would agree with me that such a man would hoard the little he has to ensure the house doesnt run out of food (every other need would be termed 'luxury' and would be made to wait).

Now there is a major scarcity of forex in the country ocassioned by the fall in oil prices. The cbn is simply hoarding the few dollars it has to ensure we would have just sufficient to meet what it terms 'essential commodities' such as petrol, food and raw materials. Buhari is not trying to force anyone not to go to school abroad, it is the economic situation of the time that has led to this and the cbn thinks that food is more important than foreign school fees. Can you imagine the humanitarian crisis that would bedevil the nation if forex reserves run down to zero?... no fuel, no food.

Even before I finished your first post I knew you ate Aisha rice

tolugar:
Op according to your closing balance,


YOU ARE BROKE

it's official

magicminister:


no vex...
i was already fuming at the loss of my 1,700 Naira.
Abi u no see my account balance??
Abeg no even make me vex more loool!!

they charged u 350/$, ur crying. gtb charged me 370/$ just yesterday

magicminister:


besides, i heard cbn stopped selling to bdc's.
so, if they don't sell to bdc's and banks, biko who dey deplete our reserves??

i know its not me and my 5 dollar transaction sha.

They regulate. TheY no longer sell

bizgenius1:



bro thats 243...kinda fair

really? for 1 canadian dollar? i didnt say 1 us dollar o

Uchefrancis16:
Permit my ignorance.

If they bought from the black market at say 300 and sell at 350. why then do they pay 198.5 to us receiving money from AdSense? Is that not dubious? They will be making gain of over 150 per 1$

This is why the Bank are the winners in all this.wen U make.a previous banker head of CBN what do you xpect

magicminister:


i am sorry maine.
it is the situation we have found ourselves.
Yet, buhari will fly around the world and buy bmw worth billions of dollars!

Don't mind the dullard called Buhari!

bebe2:


U see life and if I tell u 500 to 1£ u no go gree oo

Haha...you dey operate for Aberdeen?

500 na black market nah...we go deal for parallel market since no be naija we dey

grandstar:


The present tools government is using is causing mayhem in the economy. They have proven to be blunt and highly ineffective shortchanging almost everyone. The best indicator of this is that a bag of pure water is now 100 naira.

The proper thing to do is to allow the currency depreciate to its real value based on the present forex earning so that the government can provide enough forex to everyone who demands it.

GEJ allowed the currency to depreciate snd that is why is why despite oil prices falling from $118 to $45, the naira fell from 165 to 210.

It is the opposite with PMB who said he won't allow the currency to depreciate from day 1. That is why there is so much bedlam.

I don't think you're still getting the point, the reason why government doesn't want to devalue is because even if it does, the value will still change over time. Cbn can no longer release dollars from our reserves causes it's already depleted. It would mean giving out more than we are getting in through exports, which is not the possibility for now since the major export earner for us has depreciated in value.. If we exhaust our reserves, the naira will loss its value.

pendusky:


People like you should be flogged,


Months Back you opened this tread

Reasons Why Nigerians Must Reject Jonathan And The Pdp.... by
olamonsor2 : 3:45pm On Mar 11 , 2015

www.nairaland.com/2190893/reasons-why-nigerians-must-reject


You rejected 200 per dollars then and now it affecting you 350naira per dollar and ur saying ur loosing hope on which government, If I hear

If u ever open ur mouth again on this govt u will be flogged

Sharrrap and move on.

chair, you wicked. Its not his fault, it was lai Mohammed that brainwashed him.

tolugar:
Op according to your closing balance,

YOU ARE BROKE

Ɣòμ are mocking him right? God Ȋ̝̊̅§ so wonderful †ђǎ̜̣̍† can make Ɣòμ his house help or gatekeeper soon.

emmygzy:
chair, you wicked. Its not his fault, it was lai Mohammed that brainwashed him.

Haba I offend u

irondome:


When I read comment like this, I just feel we still have a long way to go as a country, especially in the aspect of basic knowledge of governance and economics.

Are you aware that GEJ government had to devalue Naira from 166 to 199 when the oil price dipped from the 110-140 range to $70 per barrel? If yes, then, how do expect a GEJ who couldnt maintain naira-dollar rate at 166 with oil price at $70 to do any magic with oil price at $28-$32?

Mind you, Buhari, has not even devalued at all, he has only ensured that "those who want luxury pay for their luxury". You want a foreign app, pay for it. You want a foreign education, pay for it. You want to go on vacation, pay for it. You want foreign medical check out, pay for it.
On the other hand, exchange rate on critical imports remain same.

On a broader perspective, this stringent austerity policy would force more and more people to patronize made in Nigeria Products, which would invariably boost local markets.

Sometimes when I read comments like this I feel like trashing it...

keep ur lessons to ur self bro. preach those sermon when $1=1Dollars as ur oga promised

ranktzy:

I don't think you're still getting the point, the reason why government doesn't want to devalue is because even if it does, the value will still change over time. Cbn can no longer release dollars from our reserves causes it's already depleted. It would mean giving out more than we are getting in through exports, which is not the possibility for now since the major export earner for us has depreciated in value.. If we exhaust our reserves, the naira will loss its value.

Currency depreciations and devaluations do not exist in a void. They are caused by one factor or the other.

For instance, the dollar has been appreciating against the Euro and other currencies in the past 1 year. That means the naira will depreciate against it.

Also, inflation is an implicit devaluation of your currency. If the inflation rate is 10% per year, that means the currency is worth 10% less than the previous year. In the short or long term, such a currency has to devalue.

Countries with very low inflation tend to maintain their value vis a vis countries with higher inflation.

Next, if your currency is properly priced, you can never deplete your reserves!

A good example is India. In 1991, it had only $1b in its foriegn reserves. It was in very desperate situation. It now allowed the currency to float, to be fully determined by market forces.

Immediately, dollars started flowing in from abroad replenishing the foriegn reserves. From $1b, it now$295b.

Buhari has done the complete opposite of floating and the country is in a dilemma.

You speak of depleting the reserves but you are silent on replenishing it? How do you bring in more dollars? That is where the government is failing.

Nobody will bring in forex at 197. Those who receive WU are livid at the poor rates. Is it someone bringing in $10m that will be pleased?

obailala:

Who dey deplete our reserves?... it is you and I who prefer to buy 'made in UK' handkerchief with $5 instead of the one made in Aba for N50.

The nation is presently suffering from what is termed a 'negative balance of trade'. Before now, let's assume the total amount of forex leaving Nigeria per month was $10billion (this amount includes money spent importing fuel, food, clothes, foreign school and medical fees, you $5 handkerchief etc), this forex outflow of $10bn is balanced by a forex inflow of $10bn or more mainly from oil sales. Today the proceeds from oil sales has fallen by 70%, but our taste for foreign goods has obviously not changed. So today we are getting inflow of only $3bn but still spending $10bn. This is the negative balance of trade which is reducing the reserves.

To manage this crisis and prevent reserves from reaching zero, cbn has totally stopped releasing forex to banks and BDCs which help people like yourself who want to buy a mere handkerchief; except you can prove that you want to purchase an essential commodity like import fuel or rice etc, the cbn will not release its scarce forex to you. So the forex which your bank sold to you for N350 was not gotten from cbn, it was from the blackmarket. The blackmarket guys get their forex from diverse sources (including raw cash from people who return from diaspora). The scarcity of forex in the open market is the reason why it sells for up to N350 or N400.

Cc: olamonsor2

You are saying the truth in analysis but what product do your presidents, house of Assembly, Judges, Ministers use?
How can you tell one to eat what you dislike, isn't that poison?
How has the Government of this country encourage manufacturing?
No good road neither enabling environment, monopolised entrepreneurship with government backbone, what's the difference between Aba and China but the Government has a bilateral relationship with china when almost all the products are manufactured here but just that some zones aren't to be encouraged in their agenda since they have the technical-know-how?
Whenever the apex starts living by examples I.e wearing and using made in Aba, Nnewi etc products then the people at the base will reciprocate...
Hypocrisy is when you put on original Hermes, Joop, YS, Mark and spences etc and tell me to buy made in Aba.

tempest01:


Haha...you dey operate for Aberdeen?

500 na black market nah...we go deal for parallel market since no be naija we dey

Aberdeen wet dey my backyard.

I operate all over the UK, also transfer money to naija.

tolugar:
Op according to your closing balance,


YOU ARE BROKE

Do you know if he has other accounts loaded with money. Don't judge.

magicminister:
I only have 2,000 naira on my zenith bank account and i made a 5 dollar transaction only to be charged 1700 naira.
This implies that zenith bank sold each dollar at the rate of 350 NAIRA.
Yet, the central bank sells dollar to these banks at the rate of 190-199.

This is crazy and greedy!!!!

For foreign transactions and Atm withdrawals stay clear off zenith. They rip off their clients. When Cad was 162 with other banks, Zenith charged me 247. Next time use standard chartered or ecobank. Zenith is a NO No...
I stay clear off them in my best interest.

Dear Op, next time u want to carry out such transactions, please call your bank and ask for the conversion rate. Sowy ehn

Yes CBN gives out dollars to bank at official rate on some specific items that are valid for fx (through a form issued by CBN called form M), like buying agricultural equipment and other production machinery, Bank also source their dollars from blue chip companies and oil companies, usually at rate higher than what it is obtained from CBN but not upto black market, so other items that we source fx for that is not valid for fx from cbn are financed from dollars sourced from those companies, hence the high rate

Hope this explains the high rate charged by banks for some lifestyle item bought in dollars

Abayor7:

Ɣòμ are mocking him right?
God Ȋ̝̊̅§ so wonderful †ђǎ̜̣̍† can make Ɣòμ his house help or gatekeeper soon.

And while you are passing,

you'll clean my nails en we'll laugh over it all.

magicminister:


you are high and stupid at the same time.
First of all, the 5 dollar payment i made was in order to recharge an app on my phone called boss revolution. If there was a cheaper alternative from Nigeria, i would gladly be using it.

Besides, while other countries are investing heavily in their education and health sector, we are trying to thwart the dreams of those schooling abroad and asking them to school in Nigeria while 99.9999% of the children of the political elites are schooling abroad.
For crying out loud, some of the biggest successes from Nigeria were all trained abroad.

I would recommend that the government creates attractive incentives to bring back our best brains schooling and working outside the country.

abeg ask am where zahria Buhari and her siblings dey school? and how they pay school fees?