Open post. I want to find out if there is interest in hedging your Naira against current inflation.

PROBLEM:
We can see the government is not ready to do the right thing in terms of economy and people are losing savings and investments everyday. How would you offer interest rate of 1% while inflation rate is 14%. It means by doing nothing you are losing money everyday. Everything around you is costing more, but your salary, your savings are not increasing in value.

SOLUTION:
So 2 things I am thinking off:
1. Hold in another currency, fixing it in a foreign account or saving in bonds. Some of new fintech apps offer something similar wherein they allow you to buy USA stocks.
2. Purchase property abroad (100% ownership) and get rental returns.

Both have their advantages and disadvantages in terms of risk and liquidity, and with this service, people can pay in Naira

I want to get input if this is a service that would be useful. I appreciate all inputs and thoughts.

vevcommedia:
Open post. I want to find out if there is interest in hedging your Naira against current inflation.

PROBLEM:
We can see the government is not ready to do the right thing in terms of economy and people are losing savings and investments everyday. How would you offer interest rate of 1% while inflation rate is 14%. It means by doing nothing you are losing money everyday. Everything around you is costing more, but your salary, your savings are not increasing in value.

SOLUTION:
So 2 things I am thinking off:
1. Hold in another currency, fixing it in a foreign account or saving in bonds. Some of new fintech apps offer something similar wherein they allow you to buy USA stocks.
2. Purchase property abroad (100% ownership) and get rental returns.

Both have their advantages and disadvantages in terms of risk and liquidity, and with this service, people can pay in Naira

I want to get input if this is a service that would be useful. I appreciate all inputs and thoughts.

I prefer option 2 which can be done by hoining international real estate crowdfunding hedge funds.
Another alternative is to invest in gold abroad
Keep your savings in U.S dollars

vevcommedia:
Open post. I want to find out if there is interest in hedging your Naira against current inflation.

PROBLEM:
We can see the government is not ready to do the right thing in terms of economy and people are losing savings and investments everyday. How would you offer interest rate of 1% while inflation rate is 14%. It means by doing nothing you are losing money everyday. Everything around you is costing more, but your salary, your savings are not increasing in value.

SOLUTION:
So 2 things I am thinking off:
1. Hold in another currency, fixing it in a foreign account or saving in bonds. Some of new fintech apps offer something similar wherein they allow you to buy USA stocks.
2. Purchase property abroad (100% ownership) and get rental returns.

Both have their advantages and disadvantages in terms of risk and liquidity, and with this service, people can pay in Naira

I want to get input if this is a service that would be useful. I appreciate all inputs and thoughts.

Seriously, I've been thinking of this.

I planned to increase my GTB dollar account by changing more naira into dollars and stocking them there but after analyzing everything I realized that I may be at a loss.

Banks keep the official exchange rate at 370 naira /$ but in the real world(street) the exchange rate is around 480 naira/per dollars. Now there is a limit of the amount of dollars you can exchange with a bank and the worst policy is that sometimes the banks fix a limit to the amount of dollars you can withdraw and would rather you withdrew its naira equivalent.

Now the problem is that if I exchange my naira at 480 naira /$ and stock my dollar GTB dollar account and something comes up which would make me want to withdraw like $1000 at a time from the bank and the limit for withdrawing dollars is $100 per day. I would definitely lose if I have to choose to withdraw the naira equivalent which is obviously the only option and this would mean that I will be withdrawing 370 naira/$ way lower than the 480 naira/$ I saved.

I don't know if you understand what I mean. I feel the CBN should just let the forces of demand and supply determine the price of dollars. The best way to survive is simply to earn in dollars.

Thanks for your inputs

dawnomike:
I prefer option 2 which can be done by hoining international real estate crowdfunding hedge funds.
Another alternative is to invest in gold abroad
Keep your savings in U.S dollars

Are you able to do the gold investments, and join real estate crowdfunding hedge funds from Nigeria? Using naira?
If yes, can you share the companies you work with/use?

For the 2nd option, real estate investment in properties abroad,would you be interested in buying properties abroad? And which regions would you look at? Thanks, i am doing mini-customer research here

ethicallyright:


Seriously, I've been thinking of this.

I planned to increase my GTB dollar account by changing more naira into dollars and stocking them there but after analyzing everything I realized that I may be at a loss.

Banks keep the official exchange rate at 370 naira /$ but in the real world(street) the exchange rate is around 480 naira/per dollars. Now there is a limit of the amount of dollars you can exchange with a bank and the worst policy is that sometimes the banks fix a limit to the amount of dollars you can withdraw and would rather you withdrew its naira equivalent.

Now the problem is that if I exchange my naira at 480 naira /$ and stock my dollar GTB dollar account and something comes up which would make me want to withdraw like $1000 at a time from the bank and the limit for withdrawing dollars is $100 per day. I would definitely lose if I have to choose to withdraw the naira equivalent which is obviously the only option and this would mean that I will be withdrawing 370 naira/$ way lower than the 480 naira/$ I saved.

I don't know if you understand what I mean. I feel the CBN should just let the forces of demand and supply determine the price of dollars. The best way to survive is simply to earn in dollars.

I understand you perfectly because I had the same problem. I got very frustrated and eventually moved all my dollars out of my dom account. I have moved into other currencies and usd denominated stock

ethicallyright:


Seriously, I've been thinking of this.

I planned to increase my GTB dollar account by changing more naira into dollars and stocking them there but after analyzing everything I realized that I may be at a loss.

Banks keep the official exchange rate at 370 naira /$ but in the real world(street) the exchange rate is around 480 naira/per dollars. Now there is a limit of the amount of dollars you can exchange with a bank and the worst policy is that sometimes the banks fix a limit to the amount of dollars you can withdraw and would rather you withdrew its naira equivalent.

Now the problem is that if I exchange my naira at 480 naira /$ and stock my dollar GTB dollar account and something comes up which would make me want to withdraw like $1000 at a time from the bank and the limit for withdrawing dollars is $100 per day. I would definitely lose if I have to choose to withdraw the naira equivalent which is obviously the only option and this would mean that I will be withdrawing 370 naira/$ way lower than the 480 naira/$ I saved.

I don't know if you understand what I mean. I feel the CBN should just let the forces of demand and supply determine the price of dollars. The best way to survive is simply to earn in dollars.

I'm not sure where you got this information but it's not entirely true.

If you deposit US$ cash in your bank account you get US$ when you want to withdraw, no bank can force you to sell to them or withdraw Naira equivalent at an exchange rate determined by the bank!

You can quote me on this!

Kobicove:


I'm not sure where you got this information but it's not entirely true.

If you deposit US$ cash in your bank account you get US$ when you want to withdraw, no bank can force you to sell to them or withdraw Naira equivalent at an exchange rate determined by the bank!

You can quote me on this!

Now tell me how GTB would distinguish between dollars you deposited alone and dollars that was transferred to your account.
Does your own dollar account read " Total balance =$10,000 ;Balance that was transferred to the account =$6000 ; Balance that was deposited cash =$4000?"
How exactly will they distinguish between money you deposited cash in your account and the one that was transferred?

ethicallyright:


Now tell me how GTB would distinguish between dollars you deposited alone and dollars that was transferred to your account.
Does your own dollar account read " Total balance =$10,000 ;Balance that was transferred to the account =$6000 ; Balance that was deposited cash =$4000?"
How exactly will they distinguish between money you deposited cash in your account and the one that was transferred?

I'm not sure how GTBank does it's own but I know for a fact that Zenith bank accounts separately for cash deposits and direct transfers of US$