TonyeBarcanista:
August 4, 2015 Article...
Naira "Appreciation": Why Nigerians Should Not
Celebrate


www.nairaland.com/2501718/naira-appreciation-why-nigerians-should

TonyeBarcanista:

Again you fail to see the point!

You are in fact echoeing my position. The CBN is yet to devaluate the Naira but the state of the Naira is on a comatose due to scarcity of the dollar in the market. Read again..

wirinet:



As someone rightly mentioned you should continued observering the state of the naira and the economy in general in silence instead of coming out to make a fool of yourself. You have no idea of basic economic principles of demand and supply and the workings of the world economy.

How can a person with even ssc level economy education say that the fall of the Naira has nothing to do with oil price. It is like saying the goods we import and consume has nothing to do with the amount of foreign currencies (mostly dollars) we earn. So where do the government get the dollars to sell to importers to import fuel and every other items we consume?
In the cases you sighted, how long was crude at those two extremes? I remember crude hitting $147 for just a single day and it was above $140 for not more than a week. Also during the slump of 2008, crude did not go below $30 for more than a couple of weeks, intact it did not fall below $40 for more than 2 months and it rebounded almost immediately to the 50s and 60s. So how do you expect a few weeks of extremely low or high prices to have immediate effect on the naira. Besides during the 2008 slump, Nigeria had enough dollar reserves to defend the naira.
Comparing to the current situation, crude prices had been consistently low for more than 6 months, our foreign reserves are very low, so how do you expect the government to defend the naira?

TonyeBarcanista:

The argument I'm putting is that the artificial surplus of the dollar adversely affected the Naira and is hugely responsible for our present state of comatose.

LRNZH:


Can you imagine?
Surplus dollars crashed the Naira.
SMH

TonyeBarcanista:

In case you don't know, there is scarcity of dollar in the market and it is hugely responsible for the naira comatose. What is responsible for this?
www.bloomberg.com/news/articles/2016-02-18/naira-hits-new-low-on-black-market-as-dollar-scarcity-worsens
There is no need to be making noise for something you have bo idea about

blackpanda:
This is just long epistle of trash!

The fall in naira-dollar exchange is not rocket science. Its simple: high demand + low supply = high prices. We are a mono-economy. Our only dollar earner (oil) has fallen flat leading to shortage of the commodity. Till we start increasing our exports or reducing our imports, the price of dollar will keep skyrocketing!

OP sorry your analysis makes no sense. And all your recommendations have already been implemented by govt!

Obiagelli:

I remember arguing with you this topic then, today i must say YOU WERE RIGHT.

TonyeBarcanista:

Again you fail to see the point!

You are in fact echoeing my position. The CBN is yet to devaluate the Naira but the state of the Naira is on a comatose due to scarcity of the dollar in the market. Read again..

I have never supported the devaluation of the Naira. Every government since the 70s had devalued the naira and we never fared better after the naira was devalued. Each time the Naira was devalued, we also go through rounds of socio-economic crisis. As the naira rate increases against the dollar, inflation would skyrocket (since we import everything), petrol prices would increase (and the same argument would come up again that petrol has become cheaper than a bottle of coke), labour would discount wages in dollar terms and ask for increase in wages (because take home pay would no longer take you home, doctors would go on strike and demand wage increases, poverty levels would increase, etc. PDP/TAN/IPOB aka wailing wailers would be estatic saying we told you Buhari is a disaster and call for civil disobiedience.

So buhari is trying to manage a very tricky situation with the current dollar policy, he is giving dollars very cheap for importing essential commodities like fuel, medicines and industrial raw materials, while telling those that want to import milk, tooth-picks and champaigns to source their dollars themselves. Whether this policy would work in the long run, i am not sure as the policy is highly prone to abuse.

Obiagelli:

I remember arguing with you this topic then, today i must say YOU WERE RIGHT.

TonyeBarcanista:

Thank you dear!
Your comrades keep arguing without catching the drift.
Lalasticlala FP please let's have more view

LRNZH:

How can you be speaking from both sides of the mouth?
You stated that dollar surplus is causing Naira crash here:

All I did was repeat what you posted in bewilderment here:

And you come up with this?


Please make up your mind on what and who you want to blame. You are prolonging your show of ignorance by defending yor numerous positions.

TonyeBarcanista:

Again you fail to see the point!

You are in fact echoeing my position. The CBN is yet to devaluate the Naira but the state of the Naira is on a comatose due to scarcity of the dollar in the market. Read again..

LRNZH:




Wether the earlier post in Nov is right or wrong, the current post is definitely out of whack. That's what we are saying.

TonyeBarcanista:
August 4, 2015 Article...
Naira "Appreciation": Why Nigerians Should Not
Celebrate


www.nairaland.com/2501718/naira-appreciation-why-nigerians-should

TonyeBarcanista:
Read again....

I said the policy that created artificial surplus of dollar in August caused reduction in dollar in the economy, which has given rise to the scarcity we presently face. Read the First and Second post...
And Do away with "insult"

Obiagelli:



I remember arguing with you this topic then, today i must say YOU WERE RIGHT.

I must also point out that in 2008 that you mentioned in your OP, there was a huge reserve to leverage on hence the relative stability. From jan 2015 to April 2015 we lost close to $5 billion from the reserve defending the naira.

This fall is inevitable as long has oil prices remain low with our very small foreign reserve.

The scarcity of the dollar is directly links to oil prices since it is responsible for 90% of our forex earnings. Bottom line whether the government allow market forces or not, the number of $ coming in is far lower than our $ need for imports.

wirinet:


I still do not understand barcanista's views, are you calling for outright floating of the naira or devaluation ? Devaluation is still controlling the naira at a government approved price (official market). There will still be a parallel market. Then you did to answer this question, if government devalues the naira ti say N400 to the dollar, would that reduce dollar demand for importing items like cotton bud and milk? What about the socio-economic implications of such devaluation, how will the government survive it?

Here is what i wrote earlier on the topic;

wirinet:


I still do not understand barcanista's views, are you calling for outright floating of the naira or devaluation ? Devaluation is still controlling the naira at a government approved price (official market). There will still be a parallel market. Then you did to answer this question, if government devalues the naira ti say N400 to the dollar, would that reduce dollar demand for importing items like cotton bud and milk? What about the socio-economic implications of such devaluation, how will the government survive it?

Here is what i wrote earlier on the topic;

LRNZH:


There is no insult here. You cannot say that artificial surplus is causing lack of dollars. Those are diametrically opposed conditions hence the 'speaking from both sides of the mouth' statement. It is a figure of speech.

By the way, you need to go and learn how we get dollars as a country to fund imports. It has nothing to do with artificial surplus. That is why I keep referring you to learn about commodity prices and the economies that depend on them. It is an Econs-101 topic.

Obiagelli:



I remember arguing with you this topic then, today i must say YOU WERE RIGHT.

I must also point out that in 2008 that you mentioned in your OP, there was a huge reserve to leverage on hence the relative stability. From jan 2015 to April 2015 we lost close to $5 billion from the reserve defending the naira.

This fall is inevitable as long has oil prices remain low with our very small foreign reserve.

The scarcity of the dollar is directly links to oil prices since it is responsible for 90% of our forex earnings. Bottom line whether the government allow market forces or not, the number of $ coming in is far lower than our $ need for imports.

TonyeBarcanista:

The argument is not for or against devaluation. In all honesty, I'm all for devaluation. But that is not the point here.

The point here is that our the Naira is going down because of the sharp scarcity of the dollar. This scarcity can be traced to CBN's policy of July/August 2015 that caused lots of people do do away with the dollar in the economy and created artificial surplus of the dollar. As at then, I predicted that such move will backfire. This is what we are experiencing now. It is the scarcity of dollar that has made the naira to appear almost useless in value.

www.bloomberg.com/news/articles/2016-02-18/naira-hits-new-low-on-black-market-as-dollar-scarcity-worsens

Is CBN the cause of the current dollar scarcity?

The way you have put it that it is due to the earlier ban on Forex deposits by CBN leading to USD surplus is not true.

The answer can be yes if you say CBN refuse to give some importers USD for importation. But if CBN does not do this, our foreign reserve would have been probably in single digits today from importing goods we can locally source.

Devaluation is also not the answer. I gave you the link to another thread that should enlighten you and another poster even gave you the Venezuelan example where they devalued and today are in fear of defaulting on their debts.

So, I'm sorry to say that you're wrong on both counts. Admit it and learn from this experience.

To show how stubborn you are (to CHANGE ) , even the spelling of Emefiele in your topic is wrong and you refuse to change it after I pointed it out to you.

ndcide:
This trend of always wanting to spin GEJ into any argument by Buhari supporters shows the extent of intellectual hollowness that have taken over them. That's my take on this thread.

TonyeBarcanista:
Read again....

I said the policy that created artificial surplus of dollar in August caused reduction in dollar in the economy, which has given rise to the scarcity we presently face. Read the First and Second post.

Achuwa1:
Like i normally say,Gej has no hand in what is happening to Nigerian economy atm,,,,
he tried his best to save for the rainy days thru the ECA but the greedy governors then,amaechi,oshiomole & co. did what they had to do out of greed & tht is the result of what we face today,,,
i am really pained when fg.still give approval for governors to be collecting loans internationally plunging the future of their state into debt & the worst is there is nothng to show for the loans they already collected..
infact,during period when we had high oil price & they where having surplus in state allocation,they did virtually notn to improve lives of ppl in their states.
they couldnt even set up industries,private refineries,or mechanized agriculture,,,they just sat down like dundies & were receiving federal allocation,same time squadering & doing publicity stunts on tv..
Finally,Emefiele is using cbn to practice policies he read in books while in school tht has never worked in any country of the world..
its a pity & we miss NOI

TonyeBarcanista:

Well, I am not surprised to see the #BlameJonathan talk

TonyeBarcanista:

If my memory serve me right, I had made case for devaluation of the naira as far back as 2015 and even maintained that market forces be allowed to have its way.

Why did the dollar become so scarce? Have you forgoten the CBN policy that "aimed at making dollars in the kitty of politicians useless"?

If the CBN hadn't made that move, the naira wouldn't have been in such a shameful state. At worse, it might be trading as 270/$ but not what we have now. The worse of it is that the scarcity is epic.



#Thats the point!

kahal29:

Na lie Ooooo. The reduction was caused by the fall in oil prices which reduced our foreign exchange earnings from oil which is only product we export and earn the supply of foreign exchange.