peter1994:
The way non financial gurus be looking at this

TPAND:


Take it from me, you ar one of the smartest chaps on this forum.
A lot would have been heaping praise on osinbajo and making biblical postulations that the dollar will come down under his watch. Well analyzed my friend. Very spot on. CBN should have been patient to build the reserve to >$35billion before going on the black market onslaught. We live in a country where the demand for dollar dwarfs what with have in our national treasury.

papiforreal:


I think $30b is still kinda reasonable. We cant focus on building reserves forever now while people are languishing in poverty.

despi64:
Well, it's sustainable if there is peace in the Niger Delta and oil prices don't drop.

peter1994:
The way non financial gurus be looking at this

bravesoul247:
I wish to be tutored on all these things cos I'm kinda lost a bit sha but I understand a little. I hope naira maintains this exchange rate with dollar though.

Truth234:


No, not the recent intervention. It is not from our foreign reserves but oil revenue generation. People should know the difference.

Here is a link to CBN foreign reserves statement https://www.cbn.gov.ng/IntOps/Reserve.asp?MoveDate=3/2/2017%2011:44:07%20PM

lestat:


Spot on

1. Maintain or increase our crude export volume

2. Ensure Militancy in the ND is near zero through alternative social engagement programmes

3. Pray for a war in the middle east which will send the crude prices sky high-- Joking

Either way if the revenue generated from crude sales is sustained / increased then the CBN can actually drive the Naira down and hence destroy the black market dorminance

papiforreal:


I think $30b is still kinda reasonable. We cant focus on building reserves forever now while people are languishing in poverty.

Firmjudge:


1. Our off opec quota doesnt count into our reserve. Hence, once owe reach our qouta (set oil export limit (OPEC Qouta)) we will have to halt and use off opec which doesnt count into our reserve.
The defining factor to increase our reserve is in the continous increase in the price of oil..

However,

2.Great idea.

3. My hand no day ... lol.

sholatech:
I think CBN should have waited till Reserves are up to 36/38 Billion USD before they struck.

Unmet demand is at least 2bn USD. Within one week, Cbn brought out 530 million USD from Reserves to defend the currency. More or less subsidising foreign Travels & foreign education. And some 'Forwards'. And you see, the banks were not even liquid enough to take all that the Cbn offered.

Last week, most people did panicked sales. Now, demand is picking up. Where you have 2bn USD demand & 530m USD supply, what happens?

lestat:


Yeah i forgot about the OPEC quota, well our only option is number 3?

Firmjudge:


Lol... bros you got no chill oo..

Meanwhile diversification is an option that could do the magic

Adisodelight22:
Yes we can,in as much the project policy of the Opec stand and the price of barrel continue increasing above our projected benchmark for 2017,its really feasible for the CBN to roll out $350M week in week out. The two major determinant that can bring about set back to this new policy is the attaining the 2.2mb/p day production and the wicked cabal hijacking the whole process.
May Allah save our nation.

plaetton:


It is quite stupid for the CBN to be defending the Naira with our foreign currency reserves. No matter seemingly affective it appears at this particular time, the measures are ad-hoc and the reprieve temporary.

For how long will the CBN continue to do this? With what unlimited funds, and most importantly, for whose ultimate benefits ?
For example, with 5 different exchange rates, who benefits from these periodic CBN dollar subsidies ?

Certainly not the average Nigerian by any stretch.

With the weak Naira, Nigeria's balance of trade has reportedly improved, with non- oil exports leading the way.
This export momentum is exactly what Nigeria needs desperately to sustain.

This government seems to be operating a schizophrenic economic and monetary policies, where one is working against the other.

The government , no, the Nigerian public should have no obligation to subsidize any foreign exchange based business or lifestyle for anyone or group.
Your needs should match your means.

zomoears:


Very true.
Venezuela is down to $10bn reserves and most of it is in gold. They didnt know when to cut off subsidies,and it is haunting them now.

The Nigerian govt was right by removing subsidy on petroleum products. Else d fight would have been too multi faceted for d govt to cope.

Try balancing subsidy on petroleum products with defending d naira amidst high borrowing cost for govt (14% mpr)...govt would have had a much worse crisis by now.

A country like Nigeria needs reserves in d region of $35bn.

lestat:


Diversification can only work in a country where there

1. the political will to move the economy

2. consistency of government policies

3. enabling environment - power, security , transportation system and less bottle necks due to bureaucracy

Now all these are lacking in the NIgeria, so while we all have it on paper we all know the reality that Nigeria's political elite will suffocate any moves to adjust and realign the economic direction due to selfish gains

Truth234:
Amoto94 can you space it?



This is a general misconception, the CBN do not withdraw from the Foreign Reserves and in fact has added about $500 million in the last two weeks -- $75 million this week alone.

For the record, the money the CBN is auctioning is in accordance with 2017 budget provision -- official exchange rate of N305 with the oil benchmark pegged at $44 a barrel. Therefore, it is part of N2.2 trillion stipulated in the 2017 budget to come from oil revenue.

The subsidised rate is still above N305/$ official rate, commercial banks are directed not to sell more than 20% above the official rate, which is about N375/$. This fund is needed to fund capital projects in Naira and not dollars. Hence, the exchange.

So whether we can sustain it or not, 2017 budget must be funded, either through loan or revenue generation. Let just pray militants continued to yield to the agreement.

Integrityfarms:
If we can maintain the oil production level of 2m barrels per day and with the current price of oil over $50 per barrel it can be fully sustained.

I for see osinbajo sustaining this production level because of his diplomatic dealing with the people of the Niger Delta unlike his Vegetative Boss who have gone AWOL.

TPAND:


Take it from me, you ar one of the smartest chaps on this forum.
A lot would have been heaping praise on osinbajo and making biblical postulations that the dollar will come down under his watch. Well analyzed my friend. Very spot on. CBN should have been patient to build the reserve to >$35billion before going on the black market onslaught. We live in a country where the demand for dollar dwarfs what with have in our national treasury.

emi14:


But when Buhari sent military force to Niger delta to shot and kill some moroo*ns applauded him. Now osinbanjo applied diplomacy have yielded more results than force. Wisdom and equity build on love can propel Nigeria to a reasonable heights. Tribal hatred is the major epidemic after our progress. In this regard corruption is secondary.

plaetton:


But why do you reasonably think that CBN should roll out $350 per week to defend the Naira( more like SUBSIDIZING dollar purchases for a 'SELECT' group of Nigerians ) ?

For who's benefits, and at what economic costs ?
If our non-oil exports are ramping up as a result of the weak Naira, why do we want CBN to spoil that show ?

If the broad economic policy is to curb imports and boost exports, then a weaker currency is imperative, a sin qua non.
That's economics 101.

Ad-hocism , and the woeful inability to think long term is what kills this country.