Anticabal:
They just want to increase panic factor and make people bring out their dollars. Laye! i hold onto my dollars tightly. Oil dey crash steady and we won't manufacture anything tangible in the next 200 years. 1$= N3000 by next year.

omonnakoda:
There is no such thing as official world legal tender. So I do not know what you are talking about and doubt if you do. Yes commodities are denominated in dollars but that does not mean payments must be made in dollars.That is a misconception. I think you need to study balance of payments

UncleJudax:
Y
I think RIM is Canadian.

Sanchase:
Buhari has sourced large amount of Dollar for the Nigerian economy, I recall vividly during his first three months in office he traveled round the

world making negotiations and borrowings. Many countries granted requests and all these large chunks of foreign currency will be unleashed into

the Nigerian Economy, there will be a sharp decline of dollar from now and it will be surprising as dollar will trade as low as N195 per dollar.

All those hoarding dollar will cry a river, save yourselves from crying a river and sell any foreign currency to avoid losing out in the end.

musicwriter:


I think you should be giving that advise to the Federal government of Nigeria. And yes, the US dollar is a global legal tender, like it or not. That's the way it is for now.

Besides being the main currency of the United States, the American dollar is used as the standard unit of currency in international markets for commodities such as gold and petroleum (the latter, sometimes called petrocurrency, is the source of the term petrodollar). Some non-U.S. companies dealing in globalized markets, such as Airbus, list their prices in dollars.

Source: Wikipedia https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar

Raypawer:
God forbid

omonnakoda:
If you read what you quoted I already mentioned that commodities are denominated in dollars that does not mean you must acquire dollars to buy those things. We do not use dollars to trade in West Africa . Any you seem to use terrminology carelessly and interchangeably First you say it is OFFICIAL international legal tender then you say global legal tender. The dollar has very widespread acceptance but that does not mean the same thing. There is nothing like official international legal tender.
The term LEGAL TENDER has a meaning check it out

musicwriter:


One question for you.

Does Nigeria agree to sell its oil in dollar?. Yes or No.

omonnakoda:


The CBN should raise interest rates? really ? They just did the EXACT OPPOSITE? Are you saying they don't know what the are doing ? By the way do you know what the interests rates actually are and what they were when this government came to power?
Where does the threat of inflation come from ? I really do not think I understand your logic AT ALL. If you are referring to price rises as a result of exchange rate changes how will interest rates affect that. We have next to zero consumer credit in Nigeria so how does interest rate slow consumption and why anyway do we want to slow consumption when we are trying to grow the economy I am not persuaded by your theory

omonnakoda:
That is irrelevant.
Argue as if there is some order in your mind

musicwriter:


If you think it's irrelevant then this discussion don't worth it.

Later.

bookface:


The CBN should raise interest rates? really ?

Yes

Are you saying they don't know what the are doing ?

Possibly. I wouldn't be too surprised if they are just winging it. From the looks of things, it feels like they are. The leadership of the CBN has displayed some truly shocking levels of incompetency that nothing else might surprise me again. First they banned banks from accepting forex savings// continued to sell limited foreign reserves to folks who simply round tripped it // Removed bans from forex savings in banks//then banning those folks that should have been banned in the first place.
I do not see anything coherent in the strategy being employed by the CBN. It seems to be that the CBN is simply hoping that oil prices will rise in the short term and all these bad stuffs will simply melt away - A central banker that employs hope as a strategy is without doubt incompetent.


By the way do you know what the interests rates actually are and what they were when this government came to power?

Benchamark interest rates hovered around 12% before Buhari came into power - it increased briefly and officially now is at 11%


Where does the threat of inflation come from ?

Imported inflation mostly. Foreign exchange has depreciated, cost of production is higher, price levels are higher. Simple.


If you are referring to price rises as a result of exchange rate changes how will interest rates affect that

If forward exchange rates are an unbiased predictor of future spot exchange rates, then the value of exchange rate is directly related to interest rates. The higher the interest rates, the higher the value of home currency.

But leaving normative theory asides. Higher interest rates in Nigeria will attract savings from the rest of the world, which increases foreign portfolio flows and increases the value of home currency.


so how does interest rate slow consumption and why anyway do we want to slow consumption when we are trying to grow the economy?

The goal is not to grow the economy. The goal is to stabilize the economy. You cannot grow the economy if you don't achieve at least some stability in prices. For example, it wouldn't make sense for the CBN to print 100 trillion Naira and dash it out to everyone in order to grow the economy. We would simply end up as the next Zimbabwe - or the next Germany (after world war two).

Stabilizing prices should be the central goal of the CBN - and it is nonsense to talk of stimulatory measures such as lowering exchange rate - while trying to stem off a depreciation of the Naira.


We need to be real with ourselves. This is not the time to party. It is not the time to give out cheap loans. Even though there is already a little bit of fiscal consolidation being forced on us due to low energy prices - i do not think a reasonable way to offset that is stimulatory monetary policies.

drss:
until d dullard start implementing his policies, naira will continue to fluctuate btw N280 n N400 to d dollar.

NavierStokes:
These guys just want to increase the "panic factor", i am afraid as a country, we are short on fiscal and monetary instruments to fight this battle, so we resort to psychological instruments☺.

omonnakoda:


I wiill tell you something for free .You are very opinionated but you lack knowledge you really do not know what you are talking about.

Quite how you can suggest raising interest rates as a panacea to imported inflation is a mystery to me. It is like an oil importer raising interest rates to push down the cost of petrol. Bizarre

How many Nigerians have access to credit or borrow to consume?

Let us talk about the mechanics of interests rates.How does it work in practice in Nigeria ? What is the relationship between the rate at which the CBN lends to the banks and the rate at which banks lend to the economy. In Nigeria there is no connection.CBN does not tell banks what rates to use but sets the tone by the rates at which IT borrows 91 day or 364 day paper and also the rate at which it lends to the banks for daily operations

We have rates over 10% and you are suggesting further rises to "stabilize " the economy where has this been done before.
It is naive to believe high interest rates attract money.High interest rates are a measure of RISK PERCEPTION. Rates have been low for years in the US,virtually Negative ditto for the Eurozone and the Pound and that is where the money flows to. Why is the dollar getting stronger against the Naira.

This is a measure of the perception of political stability,security rule of law and the strength of the Banking sector as well as international clout.

In economics we are talking about people not electrons ,hadrons and mesons.

Acjohn:
so what have they been waiting for watching Nigeria pass through those enormous pain.
It is either they are lying or they are there for their selfish interest

omonnakoda:
There is no such thing as official world legal tender. So I do not know what you are talking about and doubt if you do. Yes commodities are denominated in dollars but that does not mean payments must be made in dollars.That is a misconception. I think you need to study balance of payments

musicwriter:


Their target was for the Naira to deteriorate up to ₦1,000/$. At that point we would have no choice than to allow the world bank and IMF to determine our economic, even political direction.

IMF and world bank are nothing but neo-colonial instruments to control the resources/economy of third world countries. They're like under-takers, they only come in when you have a burial, and they'll help you bury your loved ones, which is why Ms. Christine Lagard was in Nigeria few weeks ago. Because, they already simulated a total economic disaster leading to death of the Naira. If everything is all ok with Nigeria they'll be looking for how to rock our boat.

azzima:
Biafrans!!!! Nigeria's official number 1 enemy. Always having heart attacks whenever there is ANY good news emanating from Nigeria. Boko Haram EVEN likes Nigeria more than them . People shine your eyes well well, all their noise is not because they love Nigeria, it's because they want to watch the country sink, so can all have a laugh. They will surely be disappointed! !

erico2k2:

This is what happens wen kids get hold of an internet enabled phone and buy 1 gig airtime.

LesbianBoy:
God punish buhari

omonnakoda:
What fiscal instrument could conceivably have been used to fight this battle if we were not short of them

snaiper:
I think the retracement is exhausted..even a dead cat will bounce if it falls from a high altitude,looking for opportunity to go short heavily on naira against dollar! This time,it must get to 600naira per buck.

Anticabal:
They just want to increase panic factor and make people bring out their dollars. Laye! i hold onto my dollars tightly. Oil dey crash steady and we won't manufacture anything tangible in the next 200 years. 1$= N3000 by next year.

2sex:
GTB is already selling at 199 to dollar as at yesterday.

May your wish never come to pass.