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Why The Dollar Exchanged At N170 For 4 Years - Business - Nairaland

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Naira Rate Against The Dollar, Pounds And Euros Today 27/04/2017 / Today's Naira Exchange Rate Against The Dollar, Pounds And Euro / Today's Naira Exchange Rate Against The Dollar, Pounds And Euro (2) (3) (4)

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Why The Dollar Exchanged At N170 For 4 Years by Sibrah: 11:58am On Feb 04, 2017
Simple explanation
The govt influences or controls the Forex rate by auctioning excess petrodollar at rates cheaper than that market rate.
The ability of the govt to provide or more appropriately supply enough dollar helps maintain prices if it matches the demand volume for dollar in the Forex market. This was the case during the four years when the exchange rate was stable at N170 as the was excess earning.
Today, the crash in oil price has created a deficit in petrodollar supply making the govt to ration its auction at a relatively higher rate. The situation isn't helped by roundtrippers who sneak dollar they get at low rate from govt to black market. Rountdtripping is lucrative because it presents the defaulters with almost same profit they normally get when the engage in production but in a fraction of the time production and sales takes.
Infact in 2014 when Obasanjo accussed the FG of squandering our excess oil earnings (petrodollar), Iweala defended it as being intervention in the forex market and not squandering.
Re: Why The Dollar Exchanged At N170 For 4 Years by Sibrah: 12:14pm On Feb 04, 2017
Lalasticlala, Mynd44, Seun.

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