TonyeBarcanista:

Here we go again..... #BlamePDP and Jonathan!

who do we blame before or is buhari a miracle worker, where will he get the money from to defend the naira nw the foreign reserve is down, And i still wonder when it became a crime to blame the former opposition in power, even OBAMA is still blaming GEORGE BUSH today for making US hard for him to govern or is Jonathan better than him
http://www.whitehousedossier.com/2012/03/23/president-obamas-hall-blame/
.
http://www.usnews.com/opinion/articles/2014/12/05/blame-bush-for-low-gas-prices
.
Even Jonathan was blaming APC for insurgency, and Oil Cabal for oil scarcity.
.
http://www.premiumtimesng.com/news/162130-jonathan-blames-apc-governors-boko-haram-insurgency.html
.
http://www.premiumtimesng.com/news/top-news/173656-apc-responsible-insurgency-pdp.html

I swear I'm trying to understand what the OP wrote. The guy actually also said the Venezuelan currency didn't crash. As in that made me just open my mouth, if crashing isn't what happened to that currency then we must not know what a currency crash is. Official rate was like $1 = 6.35VEF meanwhile their currency is trading at $1 to 400VEF in the black market. They just devalued from about that 6VEF to 10VEF while raising gasoline prices 6000%.

TonyeBarcanista:

I made case for devaluation when all these started in 2015 and I still maintain that the best way to arrest incesant dollar circulation was introduction of control measures(like sane society does) and not express stoppage(which has never worked). That measure by CBN fast tracked the collapse of the Naira even before anything devaluation.

I believe the CBN is controlling the sale of the Dollar that's why its crashing. Before the crash, every Tomiwa, Dickson and Haruna could apply and get Dollars but right now, if your item is on the infamous list of 41, then the bank can't sell you Dollars, your only choice is the black market.

Nigerians have yet to come to terms with the fact that its not business as usual in regards to importation.

NgeneUkwenu:


Mami! You don't know anything about Economics and Finance! You should have stayed in your lane rather than Straying into an unfamiliar Waters...

Just take a look at they way, you conveniently left out the reason the Naira Jumped from 146 Naira to a dollar to 230 Naira @the black Market between January 2015 to May 2015(Jonathan Infamous tenure), all because you wanted to Blame Buhari and APC....

Second, You brought out the Comparison with Venezuela, but ran away when some people pointed out the Scary picture of its own economy due to the Oil glut...

In Conclusion... Your thread is nothing but a failed attempt to impress the illiterate IPOB Youths roaming On Nairaland to give "LIKES" to any comment that mocks Buhari...

Firstly, there was no time the Naira jumped from N146 to N230 in January. What happened was that the Naira was devaluated in Nov 2014 and officially pegged at N165 from N155. It was again devaluated to N199 in February 2015. Please we should get right our fact!

We are aware how speculators hoarded the dollar and the flooding of our economy of same currency by polithiefcians before the general election. This made the dollar rate to shoot to N225. Nevertheless, there wasn't this huge scarcity of the said currency like we are facing now.

On Vanezuela, someone brought it up but both situations are parallel. They had to officially embrace devaluation(something I had advocated since last year) but ours isn't yet devaluated officially but it's now in comatose.

Finally, this has nothing to do with impressing any group. You should know that.... And I'm an Analyst not an economist, that doesn't make my analysis wrong.

TonyeBarcanista:

I made case for devaluation when all these started in 2015 and I still maintain that the best way to arrest incesant dollar circulation was introduction of control measures(like sane society does) and not express stoppage(which has never worked). That measure by CBN fast tracked the collapse of the Naira even before anything devaluation.

there is no fast track or short track anything. Every import dependent economy is facing same problem nigeria is in now.
http://www.telegraph.co.uk/finance/oilprices/12093667/Crude-reckoning-what-will-oil-price-slump-mean-for-the-global-economy.html
.
Africa’s largest economy is under increased pressure after the sudden drop in oil prices in the last eight months. This is the second blow for one of the continent’s largest oil exporter’s after the shale boom virtually brought to a halt its oil exports to the United States. The country’s budget breakeven price of oil for 2015 is $122, according to Deutsche Bank estimates. Moreover, oil exports constitute more than 70 percent of Nigeria’s budget income and 90 percent of its foreign exchange. As a result, the Nigerian naira has lost the fifth of its value against the US dollar since June 2014.
http://globalriskinsights.com/2015/02/five-countries-affected-oil-price-crash/

AZeD1:

I believe the CBN is controlling the sale of the Dollar that's why its crashing. Before the crash, every Tomiwa, Dickson and Haruna could apply and get Dollars but right now, if your item is on the infamous list of 41, then the bank can't sell you Dollars, your only choice is the black market.
Nigerians have yet to come to terms with the fact that its not business as usual in regards to importation.

Now that's the issue. The CBN is trying to "help" the naira0by muscling the dollar. This idea is counterproductive and is causing us our naira.

TonyeBarcanista:

I made case for devaluation when all these started in 2015 and I still maintain that the best way to arrest incesant dollar circulation was introduction of control measures(like sane society does) and not express stoppage(which has never worked). That measure by CBN fast tracked the collapse of the Naira even before anything devaluation.

Which other central bank in the world provides forex directly to the BDC?

Allowing dollar as an acceptable/alternative currency in a mono economy was simply bad practice

Tough measures for tough times broda

We simply gotta suck it up and weather the storm

TonyeBarcanista:

Firstly, there was no time the Naira jumped from N146 to N230 in January. What happened was that the Naira was devaluated in Nov 2014 and officially pegged at N165 from N155. It was again devaluated to N199 in February 2015. Please we should get right our fact!

We are aware how speculators hoarded the dollar and the flooding of our economy of same currency by polithiefcians before the general election. This made the dollar rate to shoot to N225. Nevertheless, there wasn't this huge scarcity of the said currency like we are facing now.

On Vanezuela, someone brought it up but both situations are parallel. They had to officially embrace devaluation(something I had advocated since last year) but ours isn't yet devaluated officially but it's now in comatose.

Finally, this has nothing to do with impressing any group. You should know that.... And I'm an Analyst not an economist, that doesn't make my analysis wrong.

at the boldened. it is our foreign reverse that was making it look like that, CBN spent $5 billion dollars of our reserve to achieve the boldened. so dont compare it with nw
check this link:
http://www.vanguardngr.com/2015/05/external-reserves-cant-pay-for-more-than-3-months-of-imports/

TonyeBarcanista:

Now that's the issue. The CBN is trying to "help" the naira0by muscling the dollar. This idea is counterproductive and is causing us our naira.

The CBN has only two options now:
1. Devalue the naira and support the naira from the foreign reserve, but the foreign reserve is low and can only last for 3 months.
2. Restrict importation of certain products, to save the foreign reserve for inevitable imports, which cannot be sourced in nigeria.
.
The second option is clearly the best in the long run, while the first can only work for a short period. We have to stop this our importation madness and start using what we can produce in nigeria.
"Naira must fall, so nigeria can rise again"

AZeD1:

I believe the CBN is controlling the sale of the Dollar that's why its crashing. Before the crash, every Tomiwa, Dickson and Haruna could apply and get Dollars but right now, if your item is on the infamous list of 41, then the bank can't sell you Dollars, your only choice is the black market.

Nigerians have yet to come to terms with the fact that its not business as usual in regards to importation.

That's what u believe. The CBN isn't restricting its flow as such. They simply refuse to give out subsidize Dollar at N198.5 to every importer who import certain good they deem to have local alternative or can be produced in Nigeria. If you must by things from foreign market the use the dollar you earn to buy and not CBN subsidized Dollar that's is hardly there again.

jaybee3:

Which other central bank in the world provides forex directly to the BDC?
Allowing dollar as an acceptable/alternative currency in a mono economy was simply bad practice
Tough measures for tough times broda
We simply gotta suck it up and weather the storm

Of course we are stucked in the mess and we have to weather it. Hopefully, it doesn't get worse.

TonyeBarcanista:

Firstly, there was no time the Naira jumped from N146 to N230 in January. What happened was that the Naira was devaluated in Nov 2014 and officially pegged at N165 from N155. It was again devaluated to N199 in February 2015. Please we should get right our fact!

We are aware how speculators hoarded the dollar and the flooding of our economy of same currency by polithiefcians before the general election. This made the dollar rate to shoot to N225 . Nevertheless, there wasn't this huge scarcity of the said currency like we are facing now.

On Vanezuela, someone brought it up but both situations are parallel. They had to officially embrace devaluation(something I had advocated since last year) but ours isn't yet devaluated officially but it's now in comatose.

Finally, this has nothing to do with impressing any group. You should know that.... And I'm an Analyst not an economist, that doesn't make my analysis wrong.

You are stubbornly refusing to learn and at the same time making contradictory statement to defend your untenable position.

The bolded part of the statement is highly contradictory, you said speculators hoarded dollars and at the same time politicians flooded the market with the same dollars and you hypothesized that it was the net effect that made the dollars shoot to N225. Please explain.
How is the Venezuelan situation parallel to our own? What is the effect of their devaluation? Did it eliminate the parallel market or bridge the gaps between the markets? As long as you have lots of local currency chasing fewer dollars (due to reduction in foreign earnings), the local currency would continuously lose value.
This your hypothesis that the dollar restrictions imposed on commercial banks by CBN 6 months ago is responsible for the falling value of the naira is untenable and not supported by any renown economist. I might not understand the reason for the policy, but i know it's effect on the value of the naira even at the time it was imposed was minimal. The policy did not affect big importers like fuel, flour, rice, etc, or else we would have starved and had fuel crisis during the period, it affected mainly individuals and small time importers. I do not see how the total volume of dollars affected by the restrictions would have significant effect on the dollar, even then, not to talk of now 6 months after the policy was lifted.

wirinet:


You are stubbornly refusing to learn and at the same time making contradictory statement to defend your untenable position.

The bolded part of the statement is highly contradictory, you said speculators hoarded dollars and at the same time politicians flooded the market with the same dollars and you hypothesized that it was the net effect that made the dollars shoot to N225. Please explain.
How is the Venezuelan situation parallel to our own? What is the effect of their devaluation? Did it eliminate the parallel market or bridge the gaps between the markets? As long as you have lots of local currency chasing fewer dollars (due to reduction in foreign earnings), the local currency would continuously lose value.
This your hypothesis that the dollar restrictions imposed on commercial banks by CBN 6 months ago is responsible for the falling value of the naira is untenable and not supported by any renown economist. I might not understand the reason for the policy, but i know it's effect on the value of the naira even at the time it was imposed was minimal. The policy did not affect big importers like fuel, flour, rice, etc, or else we would have starved and had fuel crisis during the period, it affected mainly individuals and small time importers. I do not see how the total volume of dollars affected by the restrictions would have significant effect on the dollar, even then, not to talk of now 6 months after the policy was lifted.

Thank you very much.there is no correlation between his point and this current acute dollar scarcity, Even Jonathan used $5 billion of our foreign reserve to defend the naira between 31st December 2014 to May 2015.
http://www.vanguardngr.com/2015/05/external-reserves-cant-pay-for-more-than-3-months-of-imports/

Elosky20:

The CBN has only two options now:
1. Devalue the naira and support the naira from the foreign reserve, but the foreign reserve is low and can only last for 3 months.
2. Restrict importation of certain products, to save the foreign reserve for inevitable imports, which cannot be sourced in nigeria.
.
The second option is clearly the best in the long run, while the first can only work for a short period. We have to stop this our importation madness and start using what we can produce in nigeria.
"Naira must fall, so nigeria can rise again"

The restriction on import of certain product is a different issue and I welcomed it. This is different from the ban on the dollar.


READ THIS and see reactions to the ban.... www.allafrica.com/stories/201508040971.html

The truth is that we put the cart before the horse. We have no capacity to produce locally yet nor the infrastructure but we muscled the dollar six months ago thinking that the backyard policy will help. Here we are.....

wirinet:

You are stubbornly refusing to learn and at the same time making contradictory statement to defend your untenable position.
The bolded part of the statement is highly contradictory, you said speculators hoarded dollars and at the same time politicians flooded the market with the same dollars and you hypothesized that it was the net effect that made the dollars shoot to N225. Please explain.
How is the Venezuelan situation parallel to our own? What is the effect of their devaluation? Did it eliminate the parallel market or bridge the gaps between the markets? As long as you have lots of local currency chasing fewer dollars (due to reduction in foreign earnings), the local currency would continuously lose value.

This your hypothesis that the dollar restrictions imposed on commercial banks by CBN 6 months ago is responsible for the falling value of the naira is untenable and not supported by any renown economist. I might not understand the reason for the policy, but i know it's effect on the value of the naira even at the time it was imposed was minimal. The policy did not affect big importers like fuel, flour, rice, etc, or else we would have starved and had fuel crisis during the period, it affected mainly individuals and small time importers. I do not see how the total volume of dollars affected by the restrictions would have significant effect on the dollar, even then, not to talk of now 6 months after the policy was lifted.

First, read the emboldened again and get the message.

Secondly, your claim that the CBN's policy of six months ago had "minimal effect" is inappropriate to say the least. Thank God that you admit that you don't see the wisdom behind the said policy.

Your talk of importers of petroleum product, but you failed to realise that Nigeria import virtually everything and we are yet to have the capacity and infrastructure for local production. Also considering the porousness of our borders and corruption of customs and police, it means smuggling is encouraged, hence, the demand/importance for dollar for import of other products can't be underestimated. In fact, blocking financing of those products from the reserve without any backup fiscal policy that encourages local production is shallow. This the CBN did!

As for dollar scarcity, refer to the second post on this thread....

Barca, accept defeat and move on bro.

TonyeBarcanista:

The restriction on import of certain product is a different issue and I welcomed it. This is different from the ban on the dollar.


READ THIS and see reactions to the ban.... www.allafrica.com/stories/201508040971.html

The truth is that we put the cart before the horse. We have no capacity to produce locally yet nor the infrastructure but we muscled the dollar six months ago thinking that the backyard policy will help. Here we are.....

we have no option, the infrastructure you mentioned is what Jonathan failed to invest in, rather they were paying subsidy, between 31 december and may 2015. oil price was manageable then:
month, oil price in dollars, percentage increase or decrease.
Dec 2014
60.55
-21.32 %
.
Jan 2015
47.45
-21.64 %
.
Feb 2015
54.93
15.76 %
.
Mar 2015
52.83
-3.82 %
.
Apr 2015
57.42
8.69 %
.
May 2015
62.50
8.85 %.
and yet Jonathan spent $5 billion dollar to defend the naira. and the policy was nt used then. nw how much do you think buhari will spend nw the oil profit is gone.
Jun 2015
61.30
-1.92 %
.
Jul 2015
54.43
-11.21 %
.
Aug 2015
45.72
-16.00 %
.
Sep 2015
46.29
1.25 %
.
Oct 2015
46.96
1.45 %
.
Nov 2015
43.13
-8.16 %
.
Dec 2015
36.56
-15.23 %
.
Jan 2016
29.92
-18.16 %
.
now where is the money he got btw the following:
Jan 2011
92.66
-
Feb 2011
97.73
5.47 %
.
Mar 2011
108.65
11.17 %
.
Apr 2011
116.32
7.06 %
May 2011
108.18
-7.00 %
Jun 2011
105.85
-2.15 %
Jul 2011
107.88
1.92 %
Aug 2011
100.45
-6.89 %
Sep 2011
100.83
0.38 %
Oct 2011
99.92
-0.90 %
Nov 2011
105.36
5.44 %
Dec 2011
104.26
-1.04 %
Jan 2012
106.89
2.52 %
Feb 2012
112.70
5.44 %
Mar 2012
117.79
4.52 %
Apr 2012
113.75
-3.43 %
May 2012
104.16
-8.43 %
Jun 2012
90.73
-12.89 %
Jul 2012
96.75
6.64 %
Aug 2012
105.28
8.82 %
Sep 2012
106.32
0.99 %
Oct 2012
103.39
-2.76 %
Nov 2012
101.17
-2.15 %
Dec 2012
101.17
0.00 %
Jan 2013
105.04
3.83 %
Feb 2013
107.66
2.49 %
Mar 2013
102.61
-4.69 %
Apr 2013
98.85
-3.66 %
May 2013
99.35
0.51 %
Jun 2013
99.74
0.39 %
Jul 2013
105.21
5.48 %
Aug 2013
108.06
2.71 %
Sep 2013
108.78
0.67 %
Oct 2013
105.46
-3.05 %
Nov 2013
102.58
-2.73 %
Dec 2013
105.49
2.84 %
Jan 2014
102.25
-3.07 %
Feb 2014
104.82
2.51 %
Mar 2014
104.04
-0.74 %
Apr 2014
104.94
0.87 %
May 2014
105.73
0.75 %
Jun 2014
108.37
2.50 %
Jul 2014
105.22
-2.91 %
Aug 2014
100.05
-4.91 %
Sep 2014
95.89
-4.16 %
Oct 2014
86.13
-10.18 %
Nov 2014
76.96
-10.65 %
.
http://www.indexmundi.com/commodities/?commodity=crude-oil&months=60

TonyeBarcanista:

The restriction on import of certain product is a different issue and I welcomed it. This is different from the ban on the dollar.


READ THIS and see reactions to the ban.... www.allafrica.com/stories/201508040971.html

The truth is that we put the cart before the horse. We have no capacity to produce locally yet nor the infrastructure but we muscled the dollar six months ago thinking that the backyard policy will help. Here we are.....

I read your link, and no where did it say that the CBN banned the dollar. It was reporting on the new forex policy and the views of stakeholders.

I will quote relevant parts of the article;

Some manufacturers and financial market analysts have expressed divergent opinions on the Central Bank of Nigeria's (CBN) foreign exchange policy as well as the decision by commercial banks to reject foreign currency deposits.

Emefiele explained in the interview that the decision by the banks to stop accepting foreign currency in their vaults was not taken by the CBN, but that the central bank was in support of the idea.

I do not get the place where you got the information that Emefiele banned dollar deposits not to talk of the said ban is responsible for the falling value of the naira 6 months later.

TonyeBarcanista:

First, read the emboldened again and get the message.

Secondly, your claim that the CBN's policy of six months ago had "minimal effect" is inappropriate to say the least. Thank God that you admit that you don't see the wisdom behind the said policy.

Your talk of importers of petroleum product, but you failed to realise that Nigeria import virtually everything and we are yet to have the capacity and infrastructure for local production. Also considering the porousness of our borders and corruption of customs and police, it means smuggling is encouraged, hence, the demand/importance for dollar for import of other products can't be underestimated. In fact, blocking financing of those products from the reserve without any backup fiscal policy that encourages local production is shallow. This the CBN did!

As for dollar scarcity, refer to the second post on this thread....

.
at the boldened please read my last post and then tell me where the CBN will manufacture dollars frm to give to the importers, Where did our money go to during the rain fall of oil price btw 2011 and 31st Dec 2014?.

wirinet:

I read your link, and no where did it say that the CBN banned the dollar. It was reporting on the new forex policy and the views of stakeholders.
I will quote relevant parts of the article;
I do not get the place where you got the information that Emefiele banned dollar deposits not to talk of the said ban is responsible for the falling value of the naira 6 months later.

That's because Emefielle was playing hide and seek and was initially economical with the truth but only stating the ban expressly until few days after he had barred banks from bringing dollar to the apex bank.

READ THIS...

Nigeria: CBN Officially Bans Foreign Currency Cash Deposits in Nigeria

Lagos — The Central Bank of Nigeria (CBN) has officially barred banks in the country from accepting foreign currency cash deposits into customers' domiciliary accounts.
The directive was contained in a circular issued by the CBN on Wednesday and signed by the director of trade and exchange, Olakanmi Gbadamosi.

www.allafrica.com/stories/201508061477.html

You can read the full article....


Now that you get the fact of CBN's action, what's your next argument?

Elosky20:
.
at the boldened please read my last post and then tell me where the CBN will manufacture dollars frm to give to the importers, Where did our money go to during the rain fall of oil price btw 2011 and 31st Dec 2014?.

Here we go again! Always shifting towards Jonathan. Did Jonathan tell the Buhari administration to take a policy when there wasn't any fiscal backup in July/August? If the CBN had embraced devaluation last July/August I have no doubt that the worst Naira would have gone would be N300/$. All they need to do to address the incessant dollar circulation was to place restriction on amount of dollar to be deposited by both individuals and corporate entity rather than expressly barring dollar deposit. This was what I advocated for having seen it worked in Egypt. But we always want short-cut in everything...



Here we are...

Ojukwufrank:
Barca, accept defeat and move on bro.

Defeat kwa? We de fight war? I don't expect everyone to agree. In fact, disagreement is inevitable as long as economics and public finance is concerned.

TonyeBarcanista:

Here we go again! Always shifting towards Jonathan. Did Jonathan tell the Buhari administration to take a policy when there wasn't any fiscal backup in July/August? If the CBN had embraced devaluation last July/August I have no doubt that the worst Naira would have gone would be N300/$. All they need to do to address the incessant dollar circulation was to place restriction on amount of dollar to be deposited by both individuals and corporate entity rather than expressly barring dollar deposit. This was what I advocated for having seen it worked in Egypt. But we always want short-cut in everything...



Here we are...

i dont get you. which policy did Jonathan use btw 2014 to 2015 to help the naira. mind you if the price of oil increase today to $70 per barrel the exchange rate at the black market will come down to N300 to $1. had jonathan nt spent our reserve defending the naira then, CBN will have enough to defend the naira nw, you are yet to check my previous post on oil price.

TonyeBarcanista:

That's because Emefielle was playing hide and seek and was initially economical with the truth but only stating the ban expressly until few days after he had barred banks from bringing dollar to the apex bank.

READ THIS...

Nigeria: CBN Officially Bans Foreign Currency Cash Deposits in Nigeria

www.allafrica.com/stories/201508061477.html

You can read the full article....


Now that you get the fact of CBN's action, what's your next argument?

As i said earlier, i do not understand the policy, but after reading your link, i have have an idea of what Emefiele was trying to do.

Emefiele was trying to reduce the influence of the parallel market by starving it of dollars and making genuine importers of items not banned by the government go through official channels.

Read this to understand Emefiele's thinking;

For the avoidance of doubt, only wire transfers to and from Domiciliary Accounts are henceforth permissible.

"The CBN advises individuals that wish to source foreign currency for eligible and legitimate purposes such as BTA, PTA medical, mortgage, school fees, goods etc. to do so through recognized channels with the use of Form 'A' for "invisible" and Form 'M' for "visible" transactions."

The problem with Emefiele's plan was that Emefiele's plan was that the CBN does not have enough dollars to met the demand of those with eligible and legitimate purposes. Secondly, since we have no alternatives yet for banned items, importers of these items are ready to buy dollars at whatever price they can get it and the cost would be transferred to the final consumer who have no choice. So i agree the policy cannot work and that was why CBN quickly abandoned the ban policy.

What i disagree with is your assertion that it was the restrictive policy that is responsible for the falling value of the naira now. I am telling you, that the value of the naira cannot be saved by any monetary policy save withdrawing dollars from our foreign reserves and flooding the market with it. Any other policy is like fetching water with a basket. The only sure way to improve the naira is to reduce imports, increase exports and consume locally made products.

NgeneUkwenu:


Mami! You don't know anything about Economics and Finance! You should have stayed in your lane rather than Straying into an unfamiliar Waters...

Just take a look at they way, you conveniently left out the reason the Naira Jumped from 146 Naira to a dollar to 230 Naira @the black Market between January 2015 to May 2015(Jonathan Infamous tenure), all because you wanted to Blame Buhari and APC....

Second, You brought out the Comparison with Venezuela, but ran away when some people pointed out the Scary picture of its own economy due to the Oil glut...

In Conclusion... Your thread is nothing but a failed attempt to impress the illiterate IPOB Youths roaming On Nairaland to give "LIKES" to any comment that mocks Buhari...

u dey mind d unstable pseudo analyst?

Elosky20:

i dont get you. which policy did Jonathan use btw 2014 to 2015 to help the naira. mind you if the price of oil increase today to $70 per barrel the exchange rate at the black market will come down to N300 to $1. had jonathan nt spent our reserve defending the naira then, CBN will have enough to defend the naira nw, you are yet to check my previous post on oil price.

In case you aren't aware, Jonathan's government devalued the Naira two times between November 2014 and February 2015.

First, it was devalued from N155 to N168 per $ in November 2014. As at then the open market value was between N168 and N174
www.vanguardngr.com/2014/11/cbn-devalues-naira-now-n168-dollar/

Secondly, the Naira was again devalued from N168 to N198 in February 2015 and kept the Open market price between 200 and 230 till the government left power.
www.reuters.com/article/idUSL5N0VS3EM20150218

Like I said, speculation even influenced the surge but again it was managed.

However Buhari came and implemented "unimplementable" monetary policy to pass through short cut....


Here we are....

TonyeBarcanista:

In case you aren't aware, Jonathan's government devalued the Naira two times between November 2014 and February 2015.

First, it was devalued from N155 to N168 per $ in November 2014. As at then the open market value was between N168 and N174
www.vanguardngr.com/2014/11/cbn-devalues-naira-now-n168-dollar/

Secondly, the Naira was again devalued from N168 to N198 in February 2015 and kept the Open market price between 200 and 230 till the government left power.
www.reuters.com/article/idUSL5N0VS3EM20150218

Like I said, speculation even influenced the surge but again it was managed.

However Buhari came and implemented "unimplementable" monetary policy to pass through short cut....


Here we are....

you keep avoiding the $5 billion spent frm our reserve when oil was at $60 between 31st Dec 2014 to may 2015. you are still argueing frm a political point of view in support of GEJ, instead of the economist point of view which is neutral. cant u see the impact that money had on reducing dollar scarcity then.

wirinet:


As i said earlier, i do not understand the policy, but after reading your link, i have have an idea of what Emefiele was trying to do.

Emefiele was trying to reduce the influence of the parallel market by starving it of dollars and making genuine importers of items not banned by the government go through official channels.

Read this to understand Emefiele's thinking;



The problem with Emefiele's plan was that Emefiele's plan was that the CBN does not have enough dollars to met the demand of those with eligible and legitimate purposes. Secondly, since we have no alternatives yet for banned items, importers of these items are ready to buy dollars at whatever price they can get it and the cost would be transferred to the final consumer who have no choice. So i agree the policy cannot work and that was why CBN quickly abandoned the ban policy.

Firstly, thank you for agreeing on the non-workability of that CBN policy.

Secondly, I did made a case for a kind of policy that will control dollar circulation and reduce its flooding in the market. My suggestion was the Egypt style. Remember that Dollar flooded the Egypt economy during the 2011 Uprising that fell Hosni Mubarak.

Thirdly, the CBN lifted the ban in mid January 2016 when it saw that their idea wasn't working and the naira was crashing. In fact, they resorted to adopting the Egyptian model(that I had advocated for) by placing a $10,000 deposit limit per day. This they should have done since July 2015. They took the step after sensing the damage done(whether they accept it or not is their business).
www.thenationonlineng.net/cbn-lifts-ban-on-dollar-deposit-transfers/

What i disagree with is your assertion that it was the restrictive policy that is responsible for the falling value of the naira now. I am telling you, that the value of the naira cannot be saved by any monetary policy save withdrawing dollars from our foreign reserves and flooding the market with it. Any other policy is like fetching water with a basket. The only sure way to improve the naira is to reduce imports, increase exports and consume locally made products.

Please refer to the above on my position. I never said that dollar be flooded but the flow of dollar be regulated, while we back up with fiscal policy that encourages local production and less reliance on imported goods.



Hope you catch my point sir....

Elosky20:

you keep avoiding the $5 billion spent frm our reserve when oil was at $60 between 31st Dec 2014 to may 2015. you are still argueing frm a political point of view in support of GEJ, instead of the economist point of view which is neutral. cant u see the impact that money had on reducing dollar scarcity then.

You are the one bringing politics into this by always shifting to Jonathan when he had no hand in the action of Emefielle in July/August 2015. If Buhari had devaluated the Naira and regulated dollar deposit(instead of stopping it completely), we won't be where we are now. The effect of oil fall on the naira may be negative but wouldn't have been so massive like we are experiencing.

TonyeBarcanista:

Firstly, thank you for agreeing on the non-workability of that CBN policy.

Secondly, I did made a case for a kind of policy that will control dollar circulation and reduce its flooding in the market. My suggestion was the Egypt style. Remember that Dollar flooded the Egypt economy during the 2011 Uprising that fell Hosni Mubarak.

Thirdly, the CBN lifted the ban in mid January 2016 when it saw that their idea wasn't working and the naira was crashing. In fact, they resorted to adopting the Egyptian model(that I had advocated for) by placing a $10,000 deposit limit per day. This they should have done since July 2015. They took the step after sensing the damage done(whether they accept it or not is their business).
www.thenationonlineng.net/cbn-lifts-ban-on-dollar-deposit-transfers/




Please refer to the above on my position. I never said that dollar be flooded but the flow of dollar be regulated, while we back up with fiscal policy that encourages local production and less reliance on imported goods.



Hope you catch my point sir....

u still dont get it the dollar in circulation both frm CBN and BDC is lower than the demand, nw the low supply is as a result of nigeria nt making profit via exportation again. if u blame their policy as a cause of the of the dollar scarcity nw. what then caused the scarcity btw 31st DEC 2014 to may 2015?. or is buhari the president then.

TonyeBarcanista:

You are the one bringing politics into this by always shifting to Jonathan when he had no hand in the action of Emefielle in July/August 2015. If Buhari had devaluated the Naira and regulated dollar deposit(instead of stopping it completely), we won't be where we are now. The effect of oil fall on the naira may be negative but wouldn't have been so massive like we are experiencing.

what caused the scarcity of dollars btw 31st DEC 2014 to MAY 2015, or is it buhari.

TonyeBarcanista:
Since late 2015 I deliberately barred myself from making any commentary on the state of the naira in particular, and the economy in general despite watching things move from bad to worse. I had reasoned that it was best to observe things in silence and take note of development. Though my silence was interpreted by some of being sympathetic to President Buhari and a "ploy" to return to APC, I still maintained mute, focusing on other aspect of the economy.

Firstly, Crude Oil Slump Not Responsible For Naira Fall
We are all aware that our own currency, the Naira now trade at N403 to the Dollar($). Contrary to the notion that the fall in oil price is responsible for Naira collapse, the painful truth is that the massive fall of the Naira has nothing to do with oil price. If it was, the Naira would have traded at N20 per $1 when crude oil was selling at $120 per barrel in 2012. If the fall in oil price was the cause, the Naira would have fallen to N500 to the Dollar in December 2008 and February 2009 when oil price slumped to $30 per barrel from $147 that it sold in July 2008(but instead the Naira exchanged at N140-N145 to $1). If the Naira didn't fall so fast when crude oil price slumped in mid 2008, if the Naira didn't experience huge growth when the price of crude was at $120 per barrel in 2012, why then should we ascribe the astronomic fall of the naira to crude oil slump in price?



May God Bless Us All and Bless Nigeria

What was the level of our foreign reserve back in 2008? Obviously high enough to wall off any threat to our currency because it wasn't depleted, stolen and shared by unscrupulous and unpatriotic thieves in government.

Go back to the drawing board and remix your failed, illogical and elementary understanding of our economy and why currencies fall..