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Nairaland Forum / Nairaland / General / Business / Central Bank May Allow Naira To Depreciate (3513 Views)
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Central Bank May Allow Naira To Depreciate by Sunofgod(m): 7:13pm On Oct 05, 2011 |
Nigerian bank Says May Allow Naira To Depreciate - ABUJA (Reuters) - Nigeria's naira could be allowed to devalue if oil prices and foreign exchange reserves continue to fall and monetary intervention attempts are exhausted, the central bank said on Wednesday. The Central Bank of Nigeria (CBN) has been pumping U.S. dollars into the market at bi-weekly auctions to help support the local currency but without any sustained success. CBN Governor Lamido Sanusi said there was no change in the foreign exchange stability stance for now but the bank would not support the naira at all costs. "Certainly if we do continue to see threats to oil price, if we do continue to see threats to the reserve position and if we think we have exhausted the limits of monetary intervention, we will have to do that and we will have to announce but if there's going to be a depreciation, its something we want to be in control of and we want to be the ones that will announce it," Sanusi said on CNBC Africa television. "At the moment, the pressure is coming from a number of sources. There are questions about security, there are questions about the expansionary fiscal position for 2012 and of course there are the international issues." The CBN broke its own target of keeping the naira within 3 percent above or below 150 to the U.S. dollar again on Wednesday, after breaching the band for the first time last week, furthe deepening the naira's decline. CBN sold $400 million at 155.40 at the bi-weekly auction on Wednesday, short of the $685.37 million demand. The local currency was trading at 162.25 to the dollar in the interbank market, it weakest ever, following Sanusi's comments. By pumping dollars into the system the CBN is dipping into Nigeria's foreign reserves, which are built up through the sale of its crude oil. Any dip in oil prices due to a slowdown in global economic growth could put pressure on the CBN to stop using oil savings to support the naira. http://af.reuters.com/article/investingNews/idAFJOE7940FA20111005?rpc=401&feedType=RSS&feedName=investingNews&rpc=401 |
Re: Central Bank May Allow Naira To Depreciate by Sunofgod(m): 7:15pm On Oct 05, 2011 |
Is Nigeria's demise being orchestrated? |
Re: Central Bank May Allow Naira To Depreciate by blackmann(m): 7:26pm On Oct 05, 2011 |
If we honestly look at it, i feel these things are deliberately being done to mess up GEJ's tenure. I mean how can you explain it? ever since he came onboard, it has been one form of bad news to another. From Boko haram bombings to security and now an economic meltdown is on the horizon. to me things were not this bad during Baba Iyabo and Yar'Adua's time. |
Re: Central Bank May Allow Naira To Depreciate by morpheus24: 7:40pm On Oct 05, 2011 |
blackmann: What don't you understand about market pressures on the Naira to appreciate based on Oil sales estimates, reserves manipulation and interest rate controls as the CBN governor states in the below interview with ABN. Its not only the Naira feeling the pressure based on global forecasts on demand. The South African rand is down and so isthe Kenyan shilling. Why is everyting always always a conspiracy for the demise of Nigeria. Please see attached commentary below: [flash=300,200] https://www.youtube.com/watch?v=zcAXMxbk3D0&feature=channel_video_title[/flash] |
Re: Central Bank May Allow Naira To Depreciate by Nobody: 7:41pm On Oct 05, 2011 |
There is a third coloumist that plans to get cheaper oil with fewer dollars.To help their dieing economies.Gej unbanned all banned items knowing fully welll this things increase capital flight out Nigeria,who advised him on that,They are all agents of the west. |
Re: Central Bank May Allow Naira To Depreciate by ektbear: 7:53pm On Oct 05, 2011 |
Inevitable. Decreasing value of oil on the international market (i.e., less hard currency being brought in) + profligate spending by the FG (70%+ recurrent expenditure) + country that doesn't make anything = weakening currency |
Re: Central Bank May Allow Naira To Depreciate by Nobody: 11:06pm On Oct 05, 2011 |
Naira badly depreciating! Subsidy to be removed on fuel without plans for sustainable alternative means of transportation Terrorism on the increase Unemployment on the increase Banks dying in the name of capitalization Businesses closing down due to high cost of operation and very low profit margin Damn! Heavy dark cloud ahead for Nigerians - Obviously this good luck is not rubbing off on us This Fresh Air is quickly turning to VERY HOT DESERT WIND! Okonja were art thou so-called magic wand?? |
Re: Central Bank May Allow Naira To Depreciate by Sunofgod(m): 11:09pm On Oct 05, 2011 |
greateros: Well summarized, Na oyibo juju she dey use . . . . . We are being liquidated - World Bank Style |
Re: Central Bank May Allow Naira To Depreciate by texazzpete(m): 6:56am On Oct 06, 2011 |
Sun of god: No. You just don't know anything about economics to be able to logically dispute Sanusi's explanation. Hence you reach for fearmongering and FUD. Dolt! |
Re: Central Bank May Allow Naira To Depreciate by Nobody: 7:50am On Oct 06, 2011 |
In summary = our problems ve defiled all economics text book theories/solutions. Nw is the time to seek an indiginous economic solutions and let the handouts be 4nw cos its jst not working 4us for ages nw. Hw can u explain an economy that enjoys oil boom but gets poorer and runs a deficit budget and ve to borrow to finance it. Pls i need anwsers |
Re: Central Bank May Allow Naira To Depreciate by lojik(m): 9:38am On Oct 06, 2011 |
This devaluation of the Naira will further kill small and medium scale enterprises thereby tremendously[b] increasing unemployment rate[/b]. Subsidy removal from fuel will increase the cost of running business in this country that has epileptic power supply, this will kill more startups and increase unemployment rate. The removal of ban on certain imported goods has discouraged and killed the little local production and inturn caused more unemployment. This country is gradually chewing up itself. Goodluck, what foolishness is this? Are you absolutely unintelligent? |
Re: Central Bank May Allow Naira To Depreciate by litusista(f): 10:33am On Oct 06, 2011 |
Sun of god:abeg, no dey insult my boss o. Naija don get problems b4 she came in, |
Re: Central Bank May Allow Naira To Depreciate by Ess: 10:44am On Oct 06, 2011 |
byrron: Ever heard of Dutch Disease? Go google it please, |
Re: Central Bank May Allow Naira To Depreciate by Nobody: 11:57am On Oct 06, 2011 |
Let them do whatever they like, Naija don Tire me. When i was saying Vote Buhari wetin una Yarn? If you say Buhari is also not competent, lets remember that he relies a lot on his Deputies. Bakare is a smart man. GEJ is clueless and completely Daft |
Re: Central Bank May Allow Naira To Depreciate by Nobody: 12:30pm On Oct 06, 2011 |
Qoute from Ess: Ever heard of Dutch Disease? Go google it please. Well i ve gone tru it sounded more like an expo b4 an exam yet nigeria economic handlers chose to willfully follow that dooms part rather than learn from the dutch experience. Then our economics woes is nothing but a delibrate act. |
Re: Central Bank May Allow Naira To Depreciate by sasakosa: 12:50pm On Oct 06, 2011 |
kill the naira if u wish.while many banks are engaging in round tripping u turned a blind eye to them. |
Re: Central Bank May Allow Naira To Depreciate by bolajlove: 12:51pm On Oct 06, 2011 |
a healthy independence gift! |
Re: Central Bank May Allow Naira To Depreciate by oladayo042: 12:58pm On Oct 06, 2011 |
Ess:I dont see how Dutch Disease answer his question: Hw can u explain an economy that enjoys oil boom but gets poorer? Ever heard of Paradox of Plenty? Go google it please |
Re: Central Bank May Allow Naira To Depreciate by Nobody: 1:47pm On Oct 06, 2011 |
@oladayo042: honestly, d dutch diseases issue he refered me2 made me 2understand there was a precidence b4 nigeria's ecomomic woes yet we failed to learn but my question still begs 4answers. Like SLS is doing a trial by error banking/economic reforms. Seems he is confused, experimenting with all manner of economic theories on any textbook he lays his hands on. Non of his solutions ve worked and d dude jst dnt want to take responsibility 4his failures rather he is playing d blame game as if he is not a part of d policy making body. Thinks he is smart! |
Re: Central Bank May Allow Naira To Depreciate by KIDIKENYI: 2:39pm On Oct 06, 2011 |
Our Naira and kobo are in your hands you can value and devalue at will. |
Re: Central Bank May Allow Naira To Depreciate by manny4life(m): 4:51pm On Oct 06, 2011 |
Sun of god: NO it's NOT being orchestrated; while other incident might be but this one is solely on economic and market reaction. The leaders are busy embezzling our resources, this is a SHARP warning to Nigerians unless there is a drastic 360 change, things WILL fall apart. Think about it, CBN is dipping into reserve to fulfill demand for $$$, because we don't have ANY source of $$$ other than oil sale, when oil sale goes down, and demand remains constant or even go higher, that's really NOT good. Although I'm a SLS critic and still think he's clueless with no economic experience, I think him allowing the Naira to depreciate (option of last resort) up to a certain % is fair (though NOT good), that should cause imports to reduce. Now if Nigeria can improve on FISCAL polices, remove certain barriers and tread on the right path, Nigeria might recover from the dark cloud that looms around it. |
Re: Central Bank May Allow Naira To Depreciate by hbrednic: 5:42pm On Oct 06, 2011 |
they ( IMF ) warned you mr sanusi,you shouted na lie, now you are for devaluation after depleting our fx, i no fit shout. |
Re: Central Bank May Allow Naira To Depreciate by ektbear: 6:37pm On Oct 06, 2011 |
hbrednic: Heh |
Re: Central Bank May Allow Naira To Depreciate by MAURI: 7:25pm On Oct 06, 2011 |
SLS, Which kind grammar u dey blow o? When government takes active steps in allowing the Naira to drop against major currencies = Devaluation Where the drop can be attributed to market forces and influences = Depreciation So, going by the header of this post, it is being suggested that the CBN has been keeping the xchange rate of the Naira against major currencies artificially high. In that case, it's the beginning of a losing battle, 'cos Nigeria is far too dependent on import. And over 75 percent of Nigeria's foreign and total earnings are based on a product (oil) that is susceptible to a lot of factors out of the influcence range of the Nigerian government. In the event that the inevitable happens, depreciation/devaluation of the Naira, CPI (Inflation) rises and I see CBN coming in to raise interest rates to deal with inflation. hmmmm. But it will be good for Nigeria' BOP though. |
Re: Central Bank May Allow Naira To Depreciate by mekaboy(m): 10:47pm On Oct 06, 2011 |
HOW WAS SOLUDO HANDLING THIS TO KEEP THE DOLLAR AT 140, SANUSI PLEASE GO AND ASK SOLUDO WHAT HE WAS DOING? SINCE U GOT IN THERE ONE PROBLEM OR THE OTHER . |
Re: Central Bank May Allow Naira To Depreciate by texazzpete(m): 11:41am On Oct 07, 2011 |
mekaboy: What a dunce you are! Did the naira not drop from 115 to a dollar to 140 in Soludo's tenure? |
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