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Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? - Business (6) - Nairaland

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Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by adconline(m): 5:27pm On Jun 21, 2016
kaboninc:


You really do not want to find out more about Venezuela!

Trust me!
because you have nothing to say about them. Working and middle class Nigerians have been led to believe that they're better than most people in emerging economies, but all economic indices say opposite. Millions of workers and pensioners owed salaries in Naija are about 10% of Venezuela's population if we put conservative estimate at 3m Naija workers.
Over 10m Naija kids aren't enrolled in school, that's 1/3 of Venezuela population.. Ten of millions of Naija are dead poor, but they are not protesting
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by davidigomanel: 5:29pm On Jun 21, 2016
My broda i made mistake by using uba master card on Alixepress online to make purchase i regretted it badly. I was 430 per dollar with UBA master card. I wish i can show you the screen shot . It terrible bad.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by kaboninc(m): 5:29pm On Jun 21, 2016
Martartins:

For the first time in a long time, the budget is not financied hugely on debt rather by internally generated revenue, thats a step in the right direction. What the poster is facing is the dilemma of cost and breaking even as far as he is concerned if the Naira keeps falling he might likely abandon the business or find other alternative.


Please correct yourself!

The budget is hugely funded by DEBT. Kindly disregard the semantics used by the government.

How else can you explain the fact that a budget that has a capital component of 30% and a recurrent expenditure of 70% will be funded by a debt of over 40%?

A careful analysis of the budget will show a difference of increase in expenditure components and a slight departure of funding arrangements.

For example, a particular ministry voted more than 300 billion in 2016 but 18 billion in 2015. Yet considerable same projects or continuation of same projects.

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by UDS: 5:41pm On Jun 21, 2016
@Stagger, thank you for this explanation. Still waiting for more clarification of this policy from CBN. It is really hard to analyse. I wonder where this will land us. For those of us who into small importation of our products, how will we cope? You can not do your cost analysis.
www.alphacomonline.com.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by adconline(m): 5:44pm On Jun 21, 2016
kaboninc:



Please correct yourself!

The budget is hugely funded by DEBT. Kindly disregard the semantics used by the government.

How else can you explain the fact that a budget that has a capital component of 30% and a recurrent expenditure of 70% will be funded by a debt of over 40%?

A careful analysis of the budget will show a difference of increase in expenditure components and a slight departure of funding arrangements.

For example, a particular ministry voted more than 300 billion in 2016 but 18 billion in 2015. Yet considerable same projects or continuation of same projects.
Thanks! Good luck preaching common logic to Naija folks. Most us don't want to read beyond political sound bites churned out by paid party agents.
More so, the govt is saying that it can not implement 30% capital budget, so only 15% could get implemented.

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by kaboninc(m): 5:49pm On Jun 21, 2016
adconline:

because you have nothing to say about them. Working and middle class Nigerians have been led to believe that they're better than most people in emerging economies, but all economic indices say opposite. Millions of workers and pensioners owed salaries in Naija are about 10% of Venezuela's population if we put conservative estimate at 3m Naija workers.
Over 10m Naija kids aren't enrolled in school, that's 1/3 of Venezuela population.. Ten of millions of Naija are dead poor, but they are not protesting

One thing about the Nigerian economy is the thriving informal sector. Almost every Nigerian worker or most Nigerians (say 95%) of Nigerians have some form of transactions in the informa sector and this do not pass through the banking system. That is why we do not feel the impact as will other countries as we have creative ways of generating income.

Like I said, you really do not want to read about Venezuela!


'We're living worse than in a war': Venezuela's deepening economic crisis

The outlook for Venezuela appears to be dimming every day, and it's not just because of the country's daily four-hour mandatory blackouts.

The oil-exporting South American country is caught in a perfect storm of droughts, food and power shortages, and devastating inflation and recession caused by plummeting crude prices.

"We're not at war and we're living worse than in a war situation," Becky Jordan, a private school teacher in Caracas, told CBC's The Current. "I really have no idea how much longer people can take this."

President Nicolas Maduro, who took over following the death of longtime leader Hugo Chavez in 2013, faces mounting criticism and opposition as he tries, sometimes rather unconventionally, to find a solution.

Energy crisis and economic woes

Venezuela, an OPEC nation, relies heavily on oil for export earnings, and plummeting world prices have helped push its state-led economy into a deep recession.

"Since Venezuela is about 96 per cent dependent on oil, we're only receiving about a third of the hard currency we were receiving as recently as a couple of years ago," Phil Gunson, senior analyst with International Crisis Group, told The Current.

The country also has the highest inflation in the world.

Maduro announced earlier this year the strongest of the country's official exchange rates, used for essential goods like food and medicine, would be changing from 6.30 bolivars to the U.S. dollar to 10 bolivars to the dollar. But on the black market, a U.S. dollar is worth about 1,000 bolivars.

Along with the currency devaluation, Maduro raised premium gasoline prices — for the first time in 20 years — from 0.1 bolivar a litre to six bolivars per litre, and regular gasoline will jump from 0.07 bolivar to one bolivar per litre. In Canadian terms, that's about $1.29 per litre for premium, and 22 cents a litre for regular.

While Maduro has blamed the downturn on an "economic war" he claims is being waged against his government by the political opposition, the private sector and Washington, his critics have slammed the president for sticking to Chavez's socialist blueprint instead of embracing free-market reforms.

"Within 2½ years, Maduro has taken an unsustainable [economic] model and just ridden it right off a cliff," David Smilde, a senior fellow and Venezuela expert with the Washington Office on Latin America, previously told CBC News.

"People are having a very difficult time."

Water and power shortages

Venezuela's economic woes are exacerbated by water and electricity shortages.

The Guri Dam in the southeastern state of Bolivar, one of the world's largest, has seen unprecedented low levels of water, hitting a record low 243 metres in April.

​The reservoir supplies up to 70 per cent of the nation's 16,000 megawatt power demand, and the government has begun rationing.

Maduro blames the drought on the El Nino weather phenomenon, but his critics say rationing could have been prevented had the government invested in maintenance and in the construction of thermoelectric plants — power stations that generate electricity with heat energy.

Maduro has tried to reduce the country's consumption by cutting back the work week to just two days for 2.5 million public sector employees, instituting four-hour-long daily blackouts across the country, reducing hours in over 100 shopping malls and urging women to stop blow-drying their hair.

"I always think a woman looks better when she just runs her fingers through her hair and lets it dry naturally," Maduro said in April. "It's just an idea I have."

Lack of food and necessities

The floundering economy has resulted in a shortage of basic supplies like food and medicine.

Teacher Becky Jordan says you have to wait in line for hours for a loaf of bread, and live without essentials like soap and toothpaste.

"Daily life has become increasingly challenging, difficult, frustrating, even humiliating," Jordan said.

The government only allows people to shop one day a week at state-run supermarkets, with the day pre-determined by ID number.

Food shortages have also contributed to a decline in the education system.

According to the Venezuela Teacher's Federation, children have missed an average of 40 per cent of class time because a third of teachers skip work on any given day to wait in food lines.

Helena Porras, a school director in Caracas, has asked nearby supermarkets to let teachers cut in line and has disciplined staff for selling students passing grades in exchange for scarce goods like milk and flour.

Until recently, Venezuela's schools were among the best in South America, and the late Chavez made education a centrepiece of his socialist revolution.

But now teachers are fleeing the country, the annual dropout rate has doubled and more than a quarter of teenagers are not enrolled in school.

Maria Alejandra Torres, a hematologist-oncologist in Venezuela, told The Current that the country's health-care practitioners lack basic drugs and hospital supplies, which has resulted in the death of patients with treatable conditions.

"We are losing many patients," Torres said. "We don't know how to help them. We don't have a way to help them."

Political and social unrest

Beyond the opposition's formal protest campaign, spontaneous street protests and looting are becoming more common.

Some demonstrations have turned violent with National Guard soldiers and police officers using tear gas to counter rock-throwing protesters.

Maduro, a 53-year-old former bus driver who narrowly won election to replace the late Chavez in 2013, accuses Henrique​ Capriles and other opposition leaders of seeking a coup with the help of the U.S.

The opposition coalition won control of the National Assembly in December elections, but all the legislature's measures have been shot down by the Supreme Court.

The opposition wants a recall referendum against Maduro later this year in order to force a new presidential election.

To force a referendum, the opposition would need to gather nearly four million signatures. And if a referendum was held, the president would be removed only if the number of anti-Maduro votes exceeded the number of votes he received in the 2013 election.

Officials from the ruling Socialist Party have said there is no time to organize such a vote this year and the election board is dragging its feet over the complicated procedure, which the opposition have denounced as a delaying tactic.

With polls indicating 70 per cent of Venezuelans want him out, the odds would be against Maduro in a recall. But if the vote were delayed until next year and he were to lose, he would be replaced by his hand-picked vice-president and the Socialist Party would keep power until the 2019 election.

Source: http://www.cbc.ca/news/world/venezuela-crsis-food-electricity-oil-shortage-inflation-1.3643216
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by adconline(m): 6:21pm On Jun 21, 2016
So 10m Naija kids not enrolled in school have a kind of gig in Naija informal sector??
Mind you over 50% of Naija live below poverty level of $1/day. Now if you just take 20% of Nigerians living below, that means that over 34m Nigerians are poor while Venezuela is 30m, so 20% of their population in poverty is 6m.
The difference is that Venezuelans were used to having basic things in good times, but are going through rough times now, but Nigerians have always been poor and haven't had the privilege of enjoying favourable govt social programs.

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by catalanscrew(m): 6:22pm On Jun 21, 2016
Wetin I wan buy dollar for?
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by grandstar(m): 6:27pm On Jun 21, 2016
babosky2008:

this was the same view I had and expressed when a nairaland dreamer told people to disposed their dollars coz of imminent collapse of the black market chains. As a matter of fact, dz is the best time to buy more forex at the prevailing parallel mkt rates. You are sure of doubling your naira in 6mths.
Floating of currency is a good thing in a net exporting nation, not in a country where we dash our forex to China in exchange for all the inferior items dumped all over the country. I wish the people of Nigeria had allow PMB to peg the naira for just 2 to 3 years, then pple will see the untap innovations deposited in the brain of Nigerians. 1st agriculture will pick up. ,importation of foodswill reduce. ..small scale factories will emerge. ...Now the economists have set a trap for Nigerians, the gullible and exploitatives financial institutions will conspired against the masses, welcome to the future value of $1=N450.May God see us through. Amen

You are highly incorrect. A float simple means your exchange rate is fully determined by demand and supply and influenced by government fiscal policies such as the size of the budget deficit or surplus and monetary policy such as CBN's mopping up of excess funds or raising interest rates.

This is not a true float because 41 products are still excluded from CBN window. The BDC's which would have broken the monopoly of the banks and CBN are excluded. They are badly needed in bridging the gap between the official and black market rates.

Anyway, the system needs time to prove it will work. Hasty criticism makes one foolish everyone foolish otherwise if the manage float does prove successful

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by stagger: 6:35pm On Jun 21, 2016
I have refused to be drawn into any arguments about Venezuela with the guy who is just talking and knows nothing about the reality of the situation there at the moment. Rather than admit he was wrong in his analysis, he is now saying Nigerians have never enjoyed social programs.

He probably did not participate in the Awo era free education. Maybe he also never got a scholarship with offer of automatic employment. Perhaps he also does not know students were once fed for free until Buhari's military junta stopped it and also stopped construction of new hostels. As a primary school student, we had sandwiches, milk, biscuits etc as part of a proper school feeding program, not the garbage I saw on TV the other day. This was in the late 70s.

Nuff said. Let him keep arguing without basis.

3 Likes

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by stagger: 6:35pm On Jun 21, 2016
I have refused to be drawn into any arguments about Venezuela with the guy who is just talking and knows nothing about the reality of the situation there at the moment. Rather than admit he was wrong in his analysis, he is now saying Nigerians have never enjoyed social programs.

He probably did not participate in the Awo era free education. Maybe he also never got a scholarship with offer of automatic employment. Perhaps he also does not know students were once fed for free until Bihari's military junta stopped it and also stopped construction of new hostels. As a primary school student, we had sandwiches, milk, biscuits etc as part of a proper school feeding program, not the garbage I saw on TV the other day. This was in the late 70s.

Nuff said. Let him keep arguing without basis.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by onatisi(m): 6:39pm On Jun 21, 2016
Unfortunately for Nigerians,the worst is even yet to happen . We predicted it last week that this policy is late ,this is a policy the dullard president should have allowed since last year. The naira will still crash terribly by August and then the government will start throwing blames here and there before finally abolishing this new policy but by that time many ppl would have been thrown out of jobs and their businesses rendered useless. The best thing now for anyone living in Nigeria and has funds is to start buying dollars and refuse to sell just like the commercial banks did yesterday

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by grandlexuz(m): 6:57pm On Jun 21, 2016
joey150:
What are you all using dollars for like on a daily basis??

I wonder!.import and import and import then you scream economy bad.. When you dey enrich other people own.



Bros every country imports.. From Japan to America to China. Be it finished products or raw materials.. I see a common currency for Ecowas as a solution for the future..
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by abfalkolly(m): 7:00pm On Jun 21, 2016
There is nothing like inter bank rate again ,exchange rate will be determined by demand n supply in the market with only SINGLE rate ..Banks cannot give u exact rate ..All banks(international n national )will participate...dre is nothin like small banks buyin 4rm big banks.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by adconline(m): 7:20pm On Jun 21, 2016
stagger:
I have refused to be drawn into any arguments about Venezuela with the guy who is just talking and knows nothing about the reality of the situation there at the moment. Rather than admit he was wrong in his analysis, he is now saying Nigerians have never enjoyed social programs.

He probably did not participate in the Awo era free education. Maybe he also never got a scholarship with offer of automatic employment. Perhaps he also does not know students were once fed for free until Buhari's military junta stopped it and also stopped construction of new hostels. As a primary school student, we had sandwiches, milk, biscuits etc as part of a proper school feeding program, not the garbage I saw on TV the other day. This was in the late 70s.

Nuff said. Let him keep arguing without basis.
Nope I was not born in 1960s! Nice try, but we are talking about 2016. If you can't see anything wrong in Naija with over 40m poor folks patting itself on the back and saying we're better than Venezuela when in fact there are about 5m poor folks in Venezuela
If you can't see anything wrong that Naija with GPD per capita of $3000 is saying that it's better than Venezuela with $13k GDP per capita.
If you can't see anything wrong in Naija telling you that we're better than Venezuela while having only $30bn to take care of 180m while Venezuela has $142bn to take care of 30m people

2 Likes

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by Dam5reey(m): 7:32pm On Jun 21, 2016
Summary of all... There should be regulatory body ... To make this policy work...

Before now the parralel market rates use to be close to the official rates difference of about 5 to 10 Naira..
Then rhe banks use the official rates for online transactions

I could remember this...Then Naira rate was official 198 and parrallel 200+

Something happend towards 2015 Elections.. Corruption... BDCs widened the rates and Bank did the same....

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by Dam5reey(m): 7:37pm On Jun 21, 2016
abfalkolly:
There is nothing like inter bank rate again ,exchange rate will be determined by demand n supply in the market with only SINGLE rate ..Banks cannot give u exact rate ..All banks(international n national )will participate...dre is nothin like small banks buyin 4rm big banks.

Oga thats not the reality... Then there should be live exchange rate just like we have GBP EUR USD and the rest...

Nigeria cannot attain that level where there is onw rate yet....

If you feel otherwise... Give me link to our macroeconomic and microeconomic indicators...
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by dokgen(m): 9:49pm On Jun 21, 2016
House, please i need 3000 DOLLAR/EUROS OOOO. who has . whatsapp number[font=Lucida Sans Unicode][/font] +639369428692
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by abfalkolly(m): 10:14pm On Jun 21, 2016
.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by grandstar(m): 12:50am On Jun 22, 2016
adconline:
So 10m Naija kids not enrolled in school have a kind of gig in Naija informal sector??
Mind you over 50% of Naija live below poverty level of $1/day. Now if you just take 20% of Nigerians living below, that means that over 34m Nigerians are poor while Venezuela is 30m, so 20% of their population in poverty is 6m.
The difference is that Venezuelans were used to having basic things in good times, but are going through rough times now, but Nigerians have always been poor and haven't had the privilege of enjoying favourable govt social programs.

Venezuela has run bad economic policies since 1999 when Chavez assumed power. Massive inflow of dollars helped disguise the rot in the economy. He was spending money frivolously like there was no tomorrow.

The best indication of that mismanagement was that his anointed successor was a bus conductor! With a collapse in oil price, fowl ya-nsh don open.

The economy has profoundly collapsed and the completely clueless Maduro is holding desperately to power. It will take at least 3 years to repair the damage done.

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by adconline(m): 3:04am On Jun 22, 2016
grandstar:


Venezuela has run bad economic policies since 1999 when Chavez assumed power. Massive inflow of dollars helped disguise the rot in the economy. He was spending money frivolously like there was no tomorrow.

The best indication of that mismanagement was that his anointed successor was a bus conductor! With a collapse in oil price, fowl ya-nsh don open.

The economy has profoundly collapsed and the completely clueless Maduro is holding desperately to power. It will take at least 3 years to repair the damage done.

During Chavez, their workers were the highest paid in South America . They made a lot of money and spent it in their country and on their citizens unlike in Naija where we made a lot of money and Politrickians and their cronies stole and stashed in offshore accounts.
They invested in public infrastructure. It currently generates 5x more power than we do.
When oil prices come back, it's positioned to reap bountifully because its oil company, PDVSA ( similar to NNPC) is a vertically-integrated company. It explores, drills, refines and markets petroleum products. It owns one of the largest refineries in the US-Citigo. It owns refineries in Germany, Sweden, Jamaica, Bahamas and US Virgin Islands. Our NNPC is unable to reconcile its account with govt and JV partners.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by stagger: 7:19am On Jun 22, 2016
adconline:

During Chavez, their workers were the highest paid in South America . They made a lot of money and spent it in their country and on their citizens unlike in Naija where we made a lot of money and Politrickians and their cronies stole and stashed in offshore accounts.
They invested in public infrastructure. It currently generates 5x more power than we do.
When oil prices come back, it's positioned to reap bountifully because its oil company, PDVSA ( similar to NNPC) is a vertically-integrated company. It explores, drills, refines and markets petroleum products. It owns one of the largest refineries in the US-Citigo. It owns refineries in Germany, Sweden, Jamaica, Bahamas and US Virgin Islands. Our NNPC is unable to reconcile its account with govt and JV partners.

So now that the US is adding 9m barrels per day and the Saudis have threatened to step up to 20m barrels per day, when will prices of oil "come back", and to what levels?

You mean you are still one of the mono economy preachers?
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by grandstar(m): 7:31am On Jun 22, 2016
adconline:

During Chavez, their workers were the highest paid in South America . They made a lot of money and spent it in their country and on their citizens unlike in Naija where we made a lot of money and Politrickians and their cronies stole and stashed in offshore accounts.
They invested in public infrastructure. It currently generates 5x more power than we do.
When oil prices come back, it's positioned to reap bountifully because its oil company, PDVSA ( similar to NNPC) is a vertically-integrated company. It explores, drills, refines and markets petroleum products. It owns one of the largest refineries in the US-Citigo. It owns refineries in Germany, Sweden, Jamaica, Bahamas and US Virgin Islands. Our NNPC is unable to reconcile its account with govt and JV partners.

If government workers were the highest paid in South America, it exposes the reckless spending I spoke of. He actually doubled the size of an already bloated state staff.

The man ruined PDVSA. He sacked most of the company's competent staff who got better offers overseas to their well grounded knowledge in oil especially heavy oil. He then replaced them with loyalist. Production slumped heavily.

Also you claim that the money made was spent within the country. That is a fallacy.

He was dashing out aid in the form of subsidised crude oil to many South American countries.

Also, because of mismanagement of the economy, manufacturing and food production slumped forcing Venezuela to depend on imports especially from Colombia. A lot of their money was going to Colombia.

Also there was corruption, a lot of it even if it might not have been as brazen as that here. Also, there was massive capital flight from the elite who lost faith in Chavez economic policies. He actually nationalised many big private companies.

As for power. the country is suffering from severe blackouts. Investment my foot.

Most of the glory you spoke of was pre-Chavez.

You are praising well known charlatan

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by shinaboy: 7:54am On Jun 22, 2016
stagger:


To add to this:

The news commentary had it that at yesterday's trading, banks were just BUYING dollars and were not selling. So there was heavy dollar demand and that is why the interbank rate, which opened at N253 or so, started sliding towards N288 to $1. Bidding was going on and you know how bidding or auction processes go: the price keeps going up so that the highest bidder wins.

Had the CBN not intervened to offer dollars for sale at a rate of N280 to $1, believe you me the US Dollar would have been sold to the entity that was willing to pay N382 to $1 and we would have woken up to see rates at close to N400 to $1.

I tell you, we are yet to see the last of this and I am seriously wondering what the appropriate value of the Naira would be. I don't know if CBN will continue such interventions on a daily basis. Other central banks hardly intervene unless they have to. Bank of Japan has performed 3 interventions in the last 8 years or so.

Something will have to give. It is either the country's economic fundamentals are changed so we can become a net exporter (which means the government has to QUICKLY AND MASSIVELY invest in critical infrastructure like power to boost small scale production and manufacturing for export), or we just watch and allow the Naira to fall to the precipice.

We should look to Venezuela for serious soul-searching. That country produces crude oil like we do, wasted their oil money like we have done and had to devalue their currency. Now inflation is so high, that the people are starving and queuing for food. The situation in Venezuela is now so bad that people are breaking into stores, looting food and provisions and anything they can find to survive. The Venezuelan Army is now guarding retail establishments and escorting food trucks to distribution centres and markets. Critical situation in that country which reminds me of the ESSENCO lines we had in Nigeria in 1984/1985. Guess who was president then?

May we never get to that point ever again.


This is not true. The case with Venezuela happened because the government was controlling prices of commodities and fixing forex rates just like Buhari was doing before he saw the light. Infact, the shortage of products already started before oil prices started to drop.

So they are suffering from forex controls rather than devaluation

You can read this article for more details about the crisis
http://www.theatlantic.com/international/archive/2016/05/venezuela-is-falling-apart/481755/
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by stagger: 9:44am On Jun 22, 2016
shinaboy:



This is not true. The case with Venezuela happened because the government was controlling prices of commodities and fixing forex rates just like Buhari was doing before he saw the light. Infact, the shortage of products already started before oil prices started to drop.

So they are suffering from forex controls rather than devaluation

You can read this article for more details about the crisis
http://www.theatlantic.com/international/archive/2016/05/venezuela-is-falling-apart/481755/

Are you basing your opinion on an article or are you basing it on your own analysis as someone who understands economic fundamentals?

I would prefer to hear your viewpoint and not what an online article says. We all went to school and should be able to do our own analysis, not regurgitate a script written by a journalist somewhere.

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by Trutek(m): 10:00am On Jun 22, 2016
grandstar:


I have been a watcher of the Venezuelan economy since the oil crash of 1986 and I can tell you straight away that you score an F in what you just said.

This is a managed float while the Venezuelan peso is pegged at the daftest rate in the world , a lot worse than the 197 the naira was previously pegged to compared to the black market rate.
. It Is Only Human To Become Enmeshed With The Details And Lose Sight Of The Overall Picture. I Would Urge U To Forget The Textbook Grammar Used By Armchair Economists And Look At The Real Picture.Both Countries Are Developing Economies .Both Are Oil Producing With The Attendant Corruption Issues. Check The Crime Level; They Are Similar If U Factor The Ease At Which U Can Purchase Guns In Each Country.I Am Sure U Know Banks Have Been Retrenching. Guess What A Banker Who Suspects He Might Be Laid Off Anytime Soon Would Do? And He Happens To Work In The Forex Unit?In A Country With Weak Enforcement Of Laws?Just Watch!
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by grandstar(m): 11:28am On Jun 22, 2016
Trutek:
. It Is Only Human To Become Enmeshed With The Details And Lose Sight Of The Overall Picture. I Would Urge U To Forget The Textbook Grammar Used By Armchair Economists And Look At The Real Picture.Both Countries Are Developing Economies .Both Are Oil Producing With The Attendant Corruption Issues. Check The Crime Level; They Are Similar If U Factor The Ease At Which U Can Purchase Guns In Each Country.I Am Sure U Know Banks Have Been Retrenching. Guess What A Banker Who Suspects He Might Be Laid Off Anytime Soon Would Do? And He Happens To Work In The Forex Unit?In A Country With Weak Enforcement Of Laws?Just Watch!

You know nothing about Venezuela. What is the official rate and what is the black market rate?

1 Like

Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by buharisbae(f): 11:51am On Jun 22, 2016
ogene70:


if you still don't understand stagger's *layman's* explanation, then you need to change you moniker urgently. ..Some names can have adverse on you! embarassed

if you still don't understand stagger's *layman's* explanation, then you need to change you moniker urgently. ..Some names can have adverse effects on you!

yaff insult me are u now Happy?
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by shinaboy: 12:00pm On Jun 22, 2016
[i][/i]
stagger:


Are you basing your opinion on an article or are you basing it on your own analysis as someone who understands economic fundamentals?

I would prefer to hear your viewpoint and not what an online article says. We all went to school and should be able to do our own analysis, not regurgitate a script written by a journalist somewhere.

Firstly, there is absolutely nothing wrong with basing my opinion on information gathered from subject matter experts as in the article I shared, as long I understand the argument and I find it logical. Big businesses, governments, and decision makers of all kinds do this all the time. My opinion is no less valid because it is based on LOGICAL expert opinion. Emphasis on the word "Logical".

While I am not an expert, I do have a enough understanding of economics to know that a centrally controlled economy does more harm than good in the long run as Venezuela perfectly exemplifies.

Of course devaluation leads to inflation but I think saying that the hyper inflation seen in Venezuela is purely a result of the devaluation is mischievous and misleading. The factors responsible for the country's descent into the disaster it finds itself are many, and a key one was that it kept fixing prices of goods and forex rates until it became too hard for manufacturers to stay in business. And yielding to pressure, the leadership devalued the currency in last ditch efforts to save an economy that was already tanking.

Devaluation is not a silver bullet that would clear the mess caused by poor economic policies such as artificial forex rates in one fell swoop. For it to be of any use it has to be implemented alongside other policies which allow markets to operate more freely.

Artificially low prices may please us for a while but there will be nothing but anguish and regrets in the long term when its consequences become manifest. On the other hand devaluation may cause discomfort now but this can only lead to growth and development as long as other liberal market policies are in place.

If anything, Venezuela perfectly demonstrates the folly of forex controls, price fixing, and bad governance in general. And It is in no way an example of the dangers of devaluation as you suggested.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by kaboninc(m): 1:00pm On Jun 22, 2016
shinaboy:


This is not true. The case with Venezuela happened because the government was controlling prices of commodities and fixing forex rates just like Buhari was doing before he saw the light. Infact, the shortage of products already started before oil prices started to drop.

So they are suffering from forex controls rather than devaluation


stagger:

We should look to Venezuela for serious soul-searching. That country produces crude oil like we do, wasted their oil money like we have done and had to devalue their currency. Now inflation is so high, that the people are starving and queuing for food. The situation in Venezuela is now so bad that people are breaking into stores, looting food and provisions and anything they can find to survive. The Venezuelan Army is now guarding retail establishments and escorting food trucks to distribution centres and markets. Critical situation in that country which reminds me of the ESSENCO lines we had in Nigeria in 1984/1985. Guess who was president then?

You guys are saying the same thing...

Government's policies and actions (Shinaboy...the government was controlling prices of commodities and fixing forex rates [even as the] (stagger...country produces crude oil like we do [and yet] wasted their oil money like we have done and had to devalue their currency) led to a crumbling state of the economy which ended in devaluation of the country's currency.

Bad actions and policies such as unsustainable socialist programs until the crash of crude oil led to a crumbling economy. Continued sustenance of the unproductive policy aggravated the problem already at hand. Tight control of currency in view of the current realities on ground led to wide spread abuse (as we are currently experiencing here) and eventually, the currency has to be devalued so as to reflect the true situation of things.

However, even with the devaluation (10 bolivars to the dollar), the problem is still yet to be resolved.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by stagger: 1:26pm On Jun 22, 2016
shinaboy:
[i][/i]

Firstly, there is absolutely nothing wrong with basing my opinion on information gathered from subject matter experts as in the article I shared, as long I understand the argument and I find it logical. Big businesses, governments, and decision makers of all kinds do this all the time. My opinion is no less valid because it is based on LOGICAL expert opinion. Emphasis on the word "Logical".

While I am not an expert, I do have a enough understanding of economics to know that a centrally controlled economy does more harm than good in the long run as Venezuela perfectly exemplifies.

Of course devaluation leads to inflation but I think saying that the hyper inflation seen in Venezuela is purely a result of the devaluation is mischievous and misleading. The factors responsible for the country's descent into the disaster it finds itself are many, and a key one was that it kept fixing prices of goods and forex rates until it became too hard for manufacturers to stay in business. And yielding to pressure, the leadership devalued the currency in last ditch efforts to save an economy that was already tanking.

Devaluation is not a silver bullet that would clear the mess caused by poor economic policies such as artificial forex rates in one fell swoop. For it to be of any use it has to be implemented alongside other policies which allow markets to operate more freely.

Artificially low prices may please us for a while but there will be nothing but anguish and regrets in the long term when its consequences become manifest. On the other hand devaluation may cause discomfort now but this can only lead to growth and development as long as other liberal market policies are in place.

If anything, Venezuela perfectly demonstrates the folly of forex controls, price fixing, and bad governance in general. And It is in no way an example of the dangers of devaluation as you suggested.









You obviously did not read my post. If you did, you will see that there was NOWHERE I suggested that Venezuela's problems were a result of devaluation. Rather, I said that the problems with Venezuela are similar to what is playing out here as a RESULT of poor economic policy of depending solely on the export of a product whose pricing regime is not under our control.

Devaluation is not a cause: it is an effect. That is what I was clearly saying.

So you completely misrepresented and misinterpreted my post.
Re: Who Has Been Able To Buy Dollar At The Inter Bank Rates Of 253-260 Today? by adconline(m): 8:18pm On Jun 22, 2016
grandstar:


If government workers were the highest paid in South America, it exposes the reckless spending I spoke of. He actually doubled the size of an already bloated state staff.

The man ruined PDVSA. He sacked most of the company's competent staff who got better offers overseas to their well grounded knowledge in oil especially heavy oil. He then replaced them with loyalist. Production slumped heavily.

Also you claim that the money made was spent within the country. That is a fallacy.

He was dashing out aid in the form of subsidised crude oil to many South American countries.

Also, because of mismanagement of the economy, manufacturing and food production slumped forcing Venezuela to depend on imports especially from Colombia. A lot of their money was going to Colombia.

Also there was corruption, a lot of it even if it might not have been as brazen as that here. Also, there was massive capital flight from the elite who lost faith in Chavez economic policies. He actually nationalised many big private companies.

As for power. the country is suffering from severe blackouts. Investment my foot.

Most of the glory you spoke of was pre-Chavez.

You are praising well known charlatan

Venezuela compared to USA/Norway is a monster, but Chavez was unequivocally a disciple of mixed economy with huge social programs to make his citizens happy.
But comparative to Nigeria, we are the real charlatan! In 2014, Venezuela budgeted $87.3bn for a population of 30m while Naija budgeted $30bn for a population of 170m.
Sector allocation
Naija budgeted 10.6% for education which was about $3bn
Naija budgeted 5.7% for health which was about $1.5bn
Venezuela budgeted about 40% for social investments with education getting about $10bn-11.7% while health got about $7bn at 8%. Additionally, PDVSA is obligated to contribute towards education and health through a govt program " Fonden" to the tune of $8-10bn.
So Venezuela's budget is 3x more than Naija
It spends 3x more on education than Naija. It spends 5x more on health.
As per oil price, Nigeria has production cost than Venezuela. We also have lower output than Venezuela.
https://storify.com/budgITng/nnpcs-report-march-2016
http://graphics.wsj.com/oil-barrel-breakdown/
PDVSA subsidiary,
Citgo , has a downstream operation in the U which can fund Naija budget on annual basis. Their revenue in US alone is about $42bn. It owns 2 refineries in the US with a combined production capacity of 760k bpd.
Can our NNPC refine 200k bpd locally? Nope!!
PDVSA has refineries in Germany, Sweden, Bahamas, US Virgin Islands and Jamaica.
This comparison is between Naija oil wealth vs Venezuela's !

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