eph12:

How does this translates to improvement in our currency? You want government to subsidise dollars again so our external reserve is depleted right?

I don't blame you if you don't understand the benefits of increased reserves and how it relates to my comment

9jakohai:


CBN is buffering the naira....by restricting dollars.

If CBN started allowing dollars to flow...by now naira official rates would be $1 to N1000 and above.And our foreign reserves would be extra lean.

All boils down to the fact that by relying on oil...we are not having a sustainable source of forex

.

Your explanation is the other way round!

Hoarding the dollar will only make it scarce and hence appreciate the dollar agains NGN even more.

When china or switzerland wants to bring down the dollar, they sell more dollars, flooding the market with dollar thereby driving the price down.

Dont forget that the major players trading USDNGN are not on the global platform but in our own black market hence hoarding the dollar makes no sense,

pinkcottoncandy:


Your explanation is the other way round!

Hoarding the dollar will only make it scarce and hence appreciate the dollar agains NGN even more.

When china or switzerland wants to bring down the dollar, they sell more dollars, flooding the market with dollar thereby driving the price down.

Dont forget that the major players trading USDNGN are not on the global platform but in our own black market hence hoarding the dollar makes no sense,

China and Switzerland also have far more sustainable means of earning dollars and other forex for their economies...unlike Nigeria whose forex rises and falls with the oil price.

China in particular relies heavily on manufacturing to bring in the dollars......so they have the dollars to throw around so to speak. Nigeria hoards dollars because we do not have enough of them right now...thanks to the current oil price fall...and the fact that our industrial system...even during the best of times...does not export much, if at all.

9jakohai:


China and Switzerland also have far more sustainable means of earning dollars and other forex for their economies...unlike Nigeria whose forex rises and falls with the oil price.

China in particular relies heavily on manufacturing to bring in the dollars......so they have the dollars to throw around so to speak. Nigeria hoards dollars because we do not have enough of them right now...thanks to the current oil price fall...and the fact that our industrial system...even during the best of times...does not export much, if at all.

E be like say na only me and you dey this thread!

Back to your point.

The adverse effect of hoarding the dollars is creating a catastrophe on the masses. Surely there are ways of harnessing more fx...e.g those on Diaspora bringing in dollar...they policed that avenue.

Control on multiple exchange rates ....A licking policy that needs urgent patching

The issue of oil, how about building functioning oil refineries so that we use our oil here in Naija and sell any excess to gain more fx. Rather than have our ailing economy anchored to dollar/oil volatility which will always have a negative effect on our economy because we dont have any amour to play in this global market.

Imagine China having a reserve of $3,051,600, 000,000,000 and we have just $26,000,000,000....what leverage can we ever have on such a playing field.

We should tackle our internal problems first...instead of throwing spaghetti on the ceiling with our policies to see which one will stick

9jakohai:


Largely because we still need more money in the treasury...something like at least $100bn and above.

Oil is not a sustainable way of getting more forex.

The fixed exchange rate policy has increased our dependence on oil exports as it has reduced the incentives to bring in forex into Nigeria.

There has been a big drop in non-oil exports and foreign investment flows.

Building up forex reserves is fine if due to market forces: in such an environment, the Naira will appreciate. But like an employer who "saves" the equivalent of 12 months wages by not paying his worker for 12 months, building up reserves at the back of dire economic conditions driven by a fixed exchange regime is going back to Abachanomics.

PS: Abacha increased reserves from $500m in 1993 to $9.6bn in by mid-1997.

Iamwrath:


I don't blame you if you don't understand the benefits of increased reserves and how it relates to my comment

Increased reserve does not automatically mean better rates. Demand and supply determines that. If our economy is 90% internally sustainable that is we don't have to import as much as we currently do $ will automatically fall in value because people wouldn't need it that much. When price of fuel goes up is it not always because of scarcity? Same with other goods. But when there is surplus in circulation the exchangers will have no choice but to reduce their rates. And it can only be surplus if the government pumps $ into the system or if people don't need it anymore.

pinkcottoncandy:


Your explanation is the other way round!

Hoarding the dollar will only make it scarce and hence appreciate the dollar agains NGN even more.

When china or switzerland wants to bring down the dollar, they sell more dollars, flooding the market with dollar thereby driving the price down.

Dont forget that the major players trading USDNGN are not on the global platform but in our own black market hence hoarding the dollar makes no sense,

That imposing restrictions on access to dollars increases the value of dollars is a common sense proposition that you wonder why anyone is contesting this. Making something scarce makes it more valuable.

Because the CBN restricts access to dollars, people are less likely to voluntarily bring in dollars - nonoil exporters and foreign investors - thus increasing our dependence on oil exports for forex inflow. This is not just a theoretical argument but what we have seen in the last 2 years. Nonoil exports fell from $10bn in 2014 to $4bn in 2015. The CBN's policy is making us more oil-dependent.

eph12:

Increased reserve does not automatically mean better rates. Demand and supply determines that. If our economy is 90% internally sustainable that is we don't have to import as much as we currently do $ will automatically fall in value because people wouldn't need it that much. When price of fuel goes up is it not always because of scarcity? Same with other goods. But when there is surplus in circulation the exchangers will have no choice but to reduce their rates. And it can only be surplus if the government pumps $ into the system or if people don't need it anymore.

Thank you my brother! YOU GO SCHOOL

It is when there is surplus that the government can now start buying the surplus $ to raise the reserves.

pinkcottoncandy:



The issue of oil, how about building functioning oil refineries so that we use our oil here in Naija and sell any excess to gain more fx. Rather than have our ailing economy anchored to dollar/oil volatility which will always have a negative effect on our economy because we dont have any amour to play in this global market.

I remember Ifeanyi Ubah complaining about them interested investors not getting it easy from our government in respect to construction of refineries. There's this believe among them that Dangote is getting forex at cheaper amount while others are made to get it at higher price. I hope that is not true.

It's not about the reserves getting higher and yet people can hardly feed their families or provide basic amenities for themselves.

If there is true growth, it should reflect in our everyday lives!

repogirl:
It's not about the reserves getting higher and yet people can hardly feed their families or provide basic amenities for themselves.

If there is true growth, it should reflect in our everyday lives!

QED and I bet this would be another in the list of propaganda and lies that we've been witnessing.

if u tell our leaders that this there present idea is not working some paid youth will still come here and b saying rubbish.. let's keep talking sha, hoping one day the right person with the right idea will lead us one day in our lifetime

pinkcottoncandy:,eph12,4play,9jakohai,God bless you all.This thread has proven to be a very educative one.Thanks to you guys for enriching my knowledge with objective and sane points, I wish Nairaland would always be like this devoid of tribal and religious sentiments on topical issues like this.

teeono64:
I think our Federal Government deserve some kudos!
We shouldn't only tongue lash them when they goof, lets also be responsible enough to celebrate them when they perform well.
To this, i say weldone![i][/i]

He is just doing his job, its only when u perform very well for a job u are paid for, u deserve commendation.

eph12:

Increased reserve does not automatically mean better rates. Demand and supply determines that. If our economy is 90% internally sustainable that is we don't have to import as much as we currently do $ will automatically fall in value because people wouldn't need it that much. When price of fuel goes up is it not always because of scarcity? Same with other goods. But when there is surplus in circulation the exchangers will have no choice but to reduce their rates. And it can only be surplus if the government pumps $ into the system or if people don't need it anymore.

Increased reserve means there's savings a general pool of funds which can manipulate demand and supply

CXLVII:





Wailer spotted!

They detest any thing good both for the country and themselves

Wail my shoes

Let it rise in my pocket


Then we'll be talking business

iamawara:
So you still see hope for this country abi? That's the same lie they will be blowing up and down. Even if e reach $ 1000bn I swear e no go change price of garri for market. Y'all put us into this shame. Buhari ko boko ni

When crude oil price was between $100- $140 under GEJ, Instead of our reserve to increase, It keep decreasing.

Now Crude oil is $58 and our reserve got increase of $1billion in 2 weeks... We should commend baba..

God Bless PMB.
God Bless CBN
God Bless Nigeria and Nigerians...
God Bless us all

Iamwrath:



Increased reserve means there's savings a general pool of funds which can manipulate demand and supply

Which means $ wouldn't find its true value if government has to intervene every time. Anyhow you look at it, it is not sustainable. There will be only one outcome which is depletion of the reserve fund we are celebrating now.

bettercreature:
You are paying for it without your knowledge
You have no idea how much you are loosing daily through inflation while Buhari keep saving dollars
Or do you expect manufacturers or importers to buy dollars at the rate of 497 naira and not make their profit?
Keep hailing him! your 18.000 naira minimum wage which was 130$ is now about 28$
Just tell me what 28$ will buy you
You are infact shameless hailing your president for paying you 28$ minimum wage

Ogbeni shut up wetin concern us with dollars is it our official currency?

Beside how is #18.000 becomes $28?

If you wan to deceive your lots you started lying about it even at $1 to #500 we still have about $35 useless lying wailer..

oloriooko:


Stop this annoying senseless talks, so by building the foreign reserve will the common man eat?
You so deceived you gone past redemption, better prepare for harder times as the foreign reserves grow with this planless govt with no direction
GEJ was ruthless and senseless in spending and bubu is purposeless in governance

Oga you can relocate to Venezuela, Has the reserve feeding common man in the past?

Useless wailing zombie....

pinkcottoncandy:


Your explanation is the other way round!

Hoarding the dollar will only make it scarce and hence appreciate the dollar agains NGN even more.

When china or switzerland wants to bring down the dollar, they sell more dollars, flooding the market with dollar thereby driving the price down.

Dont forget that the major players trading USDNGN are not on the global platform but in our own black market hence hoarding the dollar makes no sense,

But Doing the same as China and Switzerland will make matter worse in Nigeria's case ot have you forgotten our greedy politicians and looter can buy everything overnight? Firstly you have to compare our corruption rate to that of those 2 countries first....

CBN is doing the right thing and when we have enough Forex then we can think of doing that but for now, Anyone that need dollars should sort for it by themself..

APCmyheart:



Oga you can relocate to Venezuela, Has the reserve feeding common man in the past?

Useless wailing zombie....

Your are irredeemable and I feel for you whether you be wailers or zombie, your brain has been scrambled, you can't even think!

But $1 is now N500

This is me to the person that wrote the bullsh1t up there

oloriooko:

Your are irredeemable and I feel for you whether you be wailers or zombie, your brain has been scrambled, you can't even think!

swerve if you no get better contribution to make jor.