Dolypson04:
I think this recession period is the perfect time for us to take charge of our own finances, if we are yet to do so. Many times when I go to market as a corp member, I did leave without buying anything? You asked why? Because things are just too expensive. Now I don't care about the price of dollar anymore. If it appreciates, its a blessing to me and if it depreciates, I still get happy because I make more money. Both ways I win!

vodutive:
My country people are truly funny people. You are meeting with BDC operators to do what? Do the economists at the Central Bank not study econs 101 aka demand and supply? If you have less forex feeding a voracious apetite for FX, there is only one way your currency is going...no meeting with BDC can change that.

You want the Naira to strenthen, then fix your economic policies, so that people will restore faith in the economy, foreign investment flows will return and locals will stop hoarding their wealth in dollars because they are not sure what tomorrow holds.


It's about confidence, you morons and right now no one has confidence in the economic policy direction of the country.

apatuku:
This is purely Jonathan's fault's

PBundles:



Ok I will

As you are aware there are 3 main ways to predict the future FX rate, PPP (Ie Big Max Index) relative eco strength and an econometric model.

The first one is problematic as its hard to get a product that one could compare for parity for many reasons which I don’t want to get into as i would be writing a novel.

The second is a bit easier as it uses growth and foreign investor measurements, but I prefer and used the last method, a simple econometric model, which took the following into consideration:

Int rates (CBN)
GDP actual and projected
Income growth ( I kept at par)

I derived the attached model, which is not written in stone and I admit has its flaws and this is not an exact science (way to many variables), but i don’t think Im that way off. In short if the CBN maintains is current policy towards the banks and Bureau de change and all US FX window transitions the official rate at the bank should be around 262.73 – 304.15 ( see the arrow on the graph). When you transpose that against the black market rate, which in all fairness I think is the more accurate rate to use, I get rate of 469!. At the more conservative end I got 379 (using a 33% rate against the official bank rate). FYI at this moment the market is translating it at approx 50% (official 199 to black market at 300). Im a firm believer that market (in absence of arbitrage factors) determines the price. So between 379 and 469 is the range, mid at 424. I tend to think it will be anywhere above 400.

There is a caveat, OIL. The above is when Oil price is at a constant a.o..

Do i get a passing grade? Its been more than 15 years since grad school, im now used to grading papers, but now anxious like my bussienes school students I teach at night school.

would be nice to book mark this around dec 2016 and see what it is. We usually wager bottles of wines here, do I have a taker

spafu:

How do you win on both ways?