grandstar:


Who said, "I don't believe in devaluation"? Buhari's has never hidden his meddling into the affairs of the forex market. The first thing he did upon assuming power was to fix the rate at 197 to the $ without regards to market forces. This was the height of economic hubris

He then followed it up by barring access to CBN forex windows for the importation of 41 products. These are all well known and he was even the one that revealed so.

I am apolitical. I just say things as they are

sekundosekundo:
God I can't thank you enough. You hv blessed me without measure. I SAY THANK YOU. As I aged with GRACE.

Ugosample:

Are you serious
God loves you o

LorDBolton:


Oga we still have to face "reality" forget these oyibo talk what did the last develuation do to our naira?

I believe it was over 350/$ before the first develuation? Did it work? NO!

Now we even saw 460/$ parallel market. That shows u the system is flawed, the market will always be distorted due to profiteering and hoarding by members of the supply chain.

That is why even dangote stated this current exchange rate is NOT The true value of the naira... it's being artificially decreased

So if CBN hands off completely expect 1000/$

Krucifax:


You are one of the few on here to make a 100% accurate analysis.Firstly Incoming foreign investors want your currency weaker because it makes their foreign currency do more when brought into the country. Secondly a floatation has ALREADY been done. Thirdly the floating didn't work as it led to inflation which amongst other things led to recession. FOURTH and most importantly the Nigerian Factor. CBN is fighting a necessary battle by intervening through selling dollars at a predetermined rate, if not!!!!!!! Profiteers,Currency racketeering, politicians trying to hide stolen money, etc will cause the Naira to crash to nightmare levels. This battle is forever and CBN should continue to fight it or else the many evil people in Nigeria will destroy the currency till it has no more value!

Krucifax:


You are one of the few on here to make a 100% accurate analysis.Firstly Incoming foreign investors want your currency weaker because it makes their foreign currency do more when brought into the country. Secondly a floatation has ALREADY been done. Thirdly the floating didn't work as it led to inflation which amongst other things led to recession. FOURTH and most importantly the Nigerian Factor. CBN is fighting a necessary battle by intervening through selling dollars at a predetermined rate, if not!!!!!!! Profiteers,Currency racketeering, politicians trying to hide stolen money, etc will cause the Naira to crash to nightmare levels. This battle is forever and CBN should continue to fight it or else the many evil people in Nigeria will destroy the currency till it has no more value!

TheGoodJoe:


We already had a fixed/pegged exchange rate. That was not Buhari's doing. What Buhari refused to do was agree to devaluing our currency as a solution to fixing our economic woes.

Time and the reaction to the floating of the naira proved that there is no quick fix. The solution to our economic woes is boosting our local production.

Unfortunately, we can not boost our local production with limited reserves. So first banning of the imported Items was a move to slow the fast depletion of our reserves.

Things are difficult but our local production is growing. With time, things will look better as local production looks attractive now, unlike before.

I believe in the floating of the naira was right. Pegging is an old model. Devaluing will not help. Let the market determine it price.

I also think a full float is ideal and the money we spent/ will spend in defending the naira is best used in boosting medium and small scale businesses.

Businesses like modular refineries will go a long way in reducing the demand for foreign exchange.

grandstar:


What you are saying is baseless and wrong. India in 1991 had less than 1 months import cover . It was compelled to liberalise it's exchange rate and introduce other reforms. Within a year billions of dollars of foreign exchange was flowing into the market. I dont think you're an economist. Intuition and economics do not mix.

grandstar:


What you are saying is baseless and wrong. India in 1991 had less than 1 months import cover . It was compelled to liberalise it's exchange rate and introduce other reforms. Within a year billions of dollars of foreign exchange was flowing into the market. I dont think you're an economist. Intuition and economics do not mix.

sekundosekundo:


Yes, I was a kid but my parents and the people in the community told me as I was growing up. They told me what happened to me while I was a kid.

Ijaya123:


And what does the country gain from devaluation?

grandstar:


A devaluation is a depreciation that is dictated by the authorities while a depreciation is a natural reduction in the value of the currency dictated by market forces.

Let's say for instance, the exchange rate was pegged at 150 to a $1 by the CBN ..

If it's 250 at the black market, Sanusi said the difference should not be more than 3%. The CBN may then devalue the currency to about 240 bridging the gap to a good ectent.

You ask what does the country gain from devaluation? It's like asking what does anyone gain from 1+1=2?.Whether anyone gains or not, will it not remain 2?.Refusing to accept this reality will lead to dreadful consequences.

Same with devaluations. Whether we feel it helps us or not, it is a fact of economics.

If your currency is stronger than its true value, demand will be higher than supply leading to a depletion of the foreign reserves. Forex is always entering and leaving the reserves . It is when more money enter than leaves the reserves, the reserves grow. That's how it was created in the first place.

Saudi is burning it's reserves fast because it has refused to devalue despite the steep decline in oil revenues.

Economic law states you must have enough forex to match your exchange rate. When you don't, supply will outstrip demand as it's happening today in Nigeria. If the CBN does not supply enough forex to satisfy the market, those not given will turn to the black market straining it and leading to a depreciation of the rate there. Already a "devaluation" is takino place. This what played out in Nigeria. Buhari pegged the official rate to 197 in May 2015. It collapsed at the black market from around 210 to 310 or worse by May 210 despite being pegged at 197. Now the exchange rate is 470 and there is chronic shortage of forex everywhere because Buhari does not want the naira to officially find its true value.

You can't cheat nature

Ijaya123:


You still did not state categorically what the country gains by devaluing the naira.

Only if you know the consequence of devaluation on the economy, you won't even go near it, at this present time.

On the alternative, finding ways and means to increase the reserve is what the govt should think about.

Ijaya123:


You still did not state categorically what the country gains by devaluing the naira.

Only if you know the consequence of devaluation on the economy, you won't even go near it, at this present time.

On the alternative, finding ways and means to increase the reserve is what the govt should think about.

mrvitalis:

If naira is allowed to get its true value what will be the need to hide dollars or acquire it and store??
Buying from cbn and black market will be the same... we don't have short dollars supply the people who have are not selling

WinningSun:


if it is allowed to free float. we are only compounding our problems. CBN is the largest supplier of fx followed by the oil companies. price of goods will soar and people will loose hope in the strength of the Naira and they will held on to dollar to shore up their value. fixed income earner will be swallowed up by the wind of inflation.

Ijaya123:


You still did not state categorically what the country gains by devaluing the naira.

(Benefits are obvious: the chronic scarcity if forex which has brought the collapse of many companies and plunge the country into a recession will end)

Only if you know the consequence of devaluation on the economy, you won't even go near it, at this present time.
(I know the consequences of a devaluation very well. It is not optional if your forex earning is declining. Buhari refused to devalue but the currency devalued heavily at the black market anyway. Or are you not aware of the steep depreciation? )
On the alternative, finding ways and means to increase the reserve is what the govt should think about.

What economic alternatives Economics is not guess what or trial by error. Forex from private sources refuse to flow into the country because of the bogus policies. Who in his right mind will willingly sell forex at 310 when it's 470 at the black market?

WinningSun:


if it is allowed to free float. we are only compounding our problems. CBN is the largest supplier of fx followed by the oil companies. price of goods will soar and people will loose hope in the strength of the Naira and they will held on to dollar to shore up their value. fixed income earner will be swallowed up by the wind of inflation.

onatisi:

Cbn is the largest supplier of dollars and that is wrong. It shouldn't be like that. The value of the naira will crumble ,but with time things will pick up. There is no 2 ways about it ,the FG is just postponing the inevitable . We need to start producing and once that starts with agriculture ,then exportation will follow. Government control of fx is what is turning many lazy ediots in Nigeria into emergency billionaires

14:


while burning the foreign reserves to zero, its better to let it float 100% and save the reserves. soon nigeria will be left with Zero reserve if th3y continue like this.

onatisi:

Cbn is the largest supplier of dollars and that is wrong. It shouldn't be like that. The value of the naira will crumble ,but with time things will pick up. There is no 2 ways about it ,the FG is just postponing the inevitable . We need to start producing and once that starts with agriculture ,then exportation will follow. Government control of fx is what is turning many lazy ediots in Nigeria into emergency billionaires

WinningSun:


you are right about the billionaires. but I won't qualify them as lazy idiot. they are smart business men. you know if you have bad economy manager, they are blessing to a bloody capitalist. talking about our export, the total sum of our non oil export is less than $5bn. is we draft a pro forma balance sheet the junks that enter our port is more than $20bn. to be conservative Naira will be #900

TheGoodJoe:


That is how it looks but in a full float, we get the chance to take loans because it is in line with what most investors want. The influx of dollars will drive down the inflation rate. We can boost our local production with the available funds, create jobs and develop our infrastructure.

Just like Egypt just did, I see us making a full float.

onatisi:

Agriculture is the key to Nigeria survival and Nigeria doesn't even need a loan to revamp the economy through it . But we have a dullard who still thinks borrowing borrowing borrowing is the answer. There is no single economic policy on ground yet by this government. This recession is really going to stay long because by this time next year ,all politicians plans will be on electioneering and party politics

WinningSun:


I laugh when people talks about agriculture as our saviour. whatever food will produced will be consumed here. I'm not saying it will not yield, the best agriculture can generate is less than $1bn yearly. go and check economies like cotedvoire and Ghana that largely rely on it. they are slave to debtors

WinningSun:


you need to study the attitude of investors around the world. the US federal reserve put the interest of his bond at 0% . most foreign investors will prefer you devaluate your currency so that they can buy up our stock market shares for junk. and our bond in higher interest rate since its price can't be less than interest rate. you don't free float your currency when the indices are poor. learn from China.