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How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is - Politics - Nairaland

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How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by Boleyndynasty2(f): 12:06am On Oct 01, 2016
@lalasticlala, over to you wink
The Naira hit yet another all time low on Thursday after it sold for as low as N490/$1 in some sections of the black market. The local currency has been on a steady decline since the start of the month following a repertoire of bad policies by the Central Bank of Nigeria.

As Nigerians approach the last quarter of the year and look forward to Christmas, Nairametrics readers have been asking us how much they think the exchange rate will trade for by the end of the year. It’s a tough question to answer considering the quantum of factors that influence the direction of the exchange rate. One of the most important of course is liquidity. If liquidity continues to dry up like we have been seeing, then expect the value of the naira against the dollar to continue to plummet.

Nevertheless, our analysts tried to dig in using the trajectory of the rate of depreciation of the naira to project what it will be by Xmas assuming the status quo remains. Status Quo being that liquidity is still paltry, the current CBN Governor remains in power, oil prices below $50, foreign investors remain away etc.

As at September 1 the exchange rate of the Naira was N424/$1 and by September 29 it was N490/$1. This gives us a Compounded Annual Growth Rate (CAGR) of 0.5% daily for 29 days. Using that same growth rate, we can extrapolate to determine what the exchange rate will be by Christmas.

Since we currently have about 86 days to Christmas, at today’s rate of N490 and a CAGR of 0.5% daily the exchange rate could trade at a whopping N752/$1 by Xmas.

Remarkably, the exchange rate has been growing at a rate of 0.45% since the introduction of the flexible exchange rate system (otherwise called floating of the naira). The exchange rate was officially floated on the 20th of June 2016. According to our records, the black market traded at N345/$1. 72 days later and it is trading at N490/$1 giving us a CAGR of 0.48%. This is also close to the 0.5% CAGR calculated on a daily basis above.

http://nairametrics.com/this-analysis-explains-how-the-exchange-rate-could-be-n7521-by-xmas-if-things-remain-as-is/
Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by nezer83: 12:18am On Oct 01, 2016
God save the Naira!!!
Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by idupaul: 12:20am On Oct 01, 2016
It will continue to decline as long as BUHARI is president .

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by LoveMachine(m): 4:12am On Oct 01, 2016
Don't cheer when pipelines are bombed and then cry when our currency plummets. 8% of our gdp is oil but it is over 90% of our forex. This is what happens when the oil stops flowing. They wanted to cripple the economy well congrats to the morons in the creek. They have succeeded in killing thousands of black people by virtue of their actions.

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by trapQ: 4:15am On Oct 01, 2016
Buhari is a curse. Don't even blame this on crude oil price or sabotage. Buhari single handedly plunged Nigeria into recession by his senseless policies.

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by trapQ: 4:16am On Oct 01, 2016
What kind of lie is this?
LoveMachine:
Don't cheer when pipelines are bombed and then cry when our currency plummets. 8% of our gdp is oil but it is over 90% of our forex. This is what happens when the oil stops flowing. They wanted to cripple the economy well congrats to the morons in the creek. They have succeeded in killing thousands of black people by virtue of their actions.

5 Likes

Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by seunlayi(m): 4:35am On Oct 01, 2016
I feel like giving the finance minister a deadly blow with my hand

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by sheyguy: 4:47am On Oct 01, 2016
idupaul:
It will continue to decline as long as BUHARI is president .
No. It will decline as long as you and I consume foreign goods and service than we export. The practice before now was to use the large volume of oil $ to subsidize dollar rate.

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by sheyguy: 4:48am On Oct 01, 2016
LoveMachine:
Don't cheer when pipelines are bombed and then cry when our currency plummets. 8% of our gdp is oil but it is over 90% of our forex. This is what happens when the oil stops flowing. They wanted to cripple the economy well congrats to the morons in the creek. They have succeeded in killing thousands of black people by virtue of their actions.
Most people can't understand the harsh truth you wrote up there.

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by LoveMachine(m): 5:06am On Oct 01, 2016
sheyguy:
Most people can't understand the harsh truth you wrote up there.

Can't or won't? Nigerians aren't stupid. We are just at present allowing sentiment and politics of hate to cloud our better judgement. It's not rocket science what I've posted. But it gives too much credit to Buhari and puts responsibility on the militants. How every could they allow such a thing to occur? SO instead let's blame all mishaps on APC.

Did you stub your toe? Buhari! Drop your last chin chin? Tinubu! Get a flat tire? OSINBAJO! Burn your mouth with hot soup? You guessed it ATIKU! AMAECHI! FASHOLA! UTOMI! SARAKI! DOGARA! AHHHHH! See it's always their fault. I know it makes me feel much better. grin

I was told as a child "those who don't listen shall feel." Right now we have collectively chosen not to listen so we are feeling the pinch.

trapQ:
What kind of lie is this?

I suppose you know better than gov't officials. Since you have decided to come at me sideways I'll take some time and set you straight.

http://www.dailytrust.com.ng/news/general/osinbajo-niger-delta-militancy-caused-recession/163141.html
Udoma, who said inflation stood at 17.1 percent as at July 2016, put food inflation at 15.8 percent, adding that core inflation reached 16.9 percent in the same month.
“Oil sector contributes less than 9 percent of GDP but about 80 percent of government revenue and 95 percent of forex. With the collapse of crude oil prices from over $110 per barrel in 2014 to less than $30 per barrel in the first quarter of 2016, market expectations are that it’ll be lower for longer. Foreign reserves declined from $37.3bn in the second quarter 2014 to $25.4bn by August 2016 with reduced confidence, leading to declining equity and foreign investment capital inflow from $9.7bn by the end of the second quarter, 2014 to $0.64bn at the end of the second quarter in 2016,” he said.
Read more at http://www.dailytrust.com.ng/news/general/osinbajo-niger-delta-militancy-caused-recession/163141.html#IwD2TbGrOv3OXdei.99

Any further questions?
Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by Larryfest(m): 5:48am On Oct 01, 2016
sheyguy:
No. It will decline as long as you and I consume foreign goods and service than we export. The practice before now was to use the large volume of oil $ to subsidize dollar rate.
That's just the anthem this useless government has been singing for over a year now but i really want to know that year in which we never consumed foreign goods

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by otukpo(f): 5:54am On Oct 01, 2016
I is very possible. It already sold for 490naira as at yesterday.
Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by chibuzorAbia: 6:03am On Oct 01, 2016
Larryfest:

That's just the anthem this useless government as been singing for over a year now but i really want to know that year in which we never consumed foreign goods

Just the anthem? You come from my famous part of the country. If you like go and bring Jesus to rule over Nigeria, as long as the oil price is down and there is no dollar (to continue with our senseless dead brain importation of rubbish) our economic plight would remain.

You must have believed our useless aunty from the world bank who used forged statistics to convince you that you we the largest economy in Africa.

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Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by GoggleB(m): 6:58am On Oct 01, 2016
If it's happen I teleport to USA to go get dollars before it becomes #1 to $1 as how fresident has promised grin

1 Like

Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by mrvitalis(m): 7:05am On Oct 01, 2016
Atleast it will be cheaper to produce most things here than to import.. . Nothing like cheap import again

Every bad thing has an advantage
Re: How The Exchange Rate Could Be N752/$1 By Xmas, If Things Remain As Is by sheyguy: 5:38pm On Oct 01, 2016
Larryfest:

That's just the anthem this useless government has been singing for over a year now but i really want to know that year in which we never consumed foreign goods
The difference between the other years and the Buhari years/last of Jonathan year is that there was dollar shortage to help sooth the pains of rising dollar rate.
The strategy of your nation when there was excess earnings was to sell the excess dollar at a cheaper rate than what it would have gone for. It helped Importers keep prices of goods down, and you & I were happier then. Right now there is no Dollar to subsidize forex. We didn't invest during the years of excesses. It may interest you to know that we spent over $200B between 2002 - 2014 in subsidizing dollars rate. It takes money to make money and right now there is no money to invest. The pressure of recurrent bills like workers salaries won't allow what's coming in to be utilized in industry.

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