₦airaland Forum

bejick:
so That Bandit will have a field day taking people hostage

DeLaRue:
That's unrealistic, nor is it necessarily a good thing. Such superfast appreciation may create new pockets of instability in the economy.

Naira reaching N1000 by December will be a nightmare for the CBN and the Ministry of Finance. Both will prefer a slow and steady rise.

Managing an economy is a delicate game a chess. For every positive development in one part of the economy (e.g currency) there is a potential negative effect elsewhere.

So while naira reaching N1000 by December looks good on paper, it will reverse most of the gains we have made in the last 18 months when we started exporting more and importing less. It will also reverse the ongoing efforts to produce more of what we need here in Nigeria.

If Nigeria hits N1000 by December, imported goods will become significantly cheaper next year, and the country will go back to importing more of everything. Yes, the man on the street will be happier, but long term the economy will become worse and more import-dependent.

The biggest short, medium, and long term beneficiary will be China where we import most things from. Over time, our own local industries will die a slow death. We will enjoy cheaper goods prices but our future children will have no jobs as our industries are hollowed out over time. We will basically become an economic colony of China

Yes, it is a good thing for naira to appreciate, but it is better for that appreciation to happen at a slow and steady pace to give the Ministry of Finance and the CBN time to make necessary policy changes.

I suspect the CBN would probably prefer naira not to reach N1000 to a dollar until around mid to late 2026, though I don't think they'll be able to control the timing of naira appreciation 100%. But, I can bet you that CBN will be buying dollars furiously if its data shows an impending destabilising naira gains. Buying dollars effectively means supporting the dollars against the naira

Some may be surprised by the idea of the CBN supporting the dollar against the naira, but that is part of the job of the CBN. Support the naira if there is a need to, and buy (support) the dollar if there is a need to.
I'm impressed by your knowledge and analytical skills.
I'll hold in to my foreign currency.
Thanks so much.

Albertone:
What do you mean by building? Is it bricklaying?