₦airaland Forum

BosseJ:
Prof should be careful with this advice because if the naira is left to market forces as he's suggesting, it could go as high as N1000+ to a dollar within weeks. The consequent inflation would be mad. And knowing Nigerians, they won't hear grammar o. To the average person on the streets, dollar to naira exchange rate is meant to be as low as possible, they don't care how it's done. Else they will heap the blame on him and Buhari's heads.

You are so correct here. Any attempt to let the dollar come to 560 naira officially, the black market rate will move to N700. It will be extremely difficult to bridge that parity.

TheRareGem1:
Nigerians just want to put food on their tables, live peacefully and enjoy the dividend of democracy. The FX is putting pressure on everything.

Personally, Emefiele has been dishing out wacky policies, been a mess of monetary and financial policies. How can a prof of law be giving you brilliant suggestions all the time. That is how he did during cryto ban.

VP's assertion is spot on.

Truth be told, Emefiele was managing things in the FX market well until Buhari assumed office. PMB has a hatred of devaluation which is inherently anti-market.

For instance,rather than ban sales of forex to the BDC's, he should have closed the gap between the official rate of 410 closer the tne parallel market rate of about 480 and thereby end the massive profit margins the BDC(s were making. If he had devalued the Naira to like 470, sanity would have reigned in the market.

Rather than devalue, he chose to ban sales of dollars to the BDC's at the official rate and gave the job of dollars sales to the banks. Buying dollars from the BDC's could be done in the twinkle of an eye but through the banks, takes weeks. This artificial scarcity caused by bureaucracy is what has pushed the Naira to 575.

The problem really is Buhari and a timid CBN governor who can't talk truth to power,that the president must respect the banks semi-autonomy and stop meddling.

BosseJ:
Prof should be careful with this advice because if the naira is left to market forces as he's suggesting, it could go as high as N1000+ to a dollar within weeks. The consequent inflation would be mad. And knowing Nigerians, they won't hear grammar o. To the average person on the streets, dollar to naira exchange rate is meant to be as low as possible, they don't care how it's done. Else they will heap the blame on him and Buhari's heads.

What most of you don't realize is that rejecting market forces is what actualizes your fears. Your currencies values are determined by fundamentals.

It is PMB'S hatred of market forces that has plunged the Naira this low. From 1999 to May 2015 the Naira's value moved from 100 to 216 at the black market. That was over 16yrs.

Under Buhari,, from 2015 till date, who is anti-market, the Naira has fallen from 216 to 575 today. That is under a within a space 6. 5 years.

SarkinYarki:
I am beginning to suspect the mental capacity of this man to fix Nigeria because it seems he doesn't understand the problem at all ....If you don't know if CBN fixes the rate at 600 naira tomorrow it will still find its way into the hands of Abokis who would na sell at 750 ...the scarcity of dollars is deliberately just like the scarcity of passport booklets , scarcity of electricity and Apapa hold up ..this is how northerners create false scarcity in other to make money ...They have even started it with train tickets

This isn't true! The problem from May 2015 till now is Buhari who is causing the problem

During Lamido Sanusi Era, the black market mallam made very low margins, if the Naira was 155 at the official rate, it was 160 at the black market. Lamido Sanusi said the official rate and parallel market rate must not have a gap of more than 3% as that breeds roundtripping.and other malpractices.

Blame Buhari for the present mess in thesrket

GenBuhari:
This dude's capacity to f**k up this country if he ever becomes president, exceeds that of every president since independence, with the probable exception of Thief Obasanjo!

OBJ with crude oil prices lower than those today, paid off the foreign debt, left $20bn in excess crude account and the foreign reserves were $60bn. How exactly is he so bad.?

grandstar:
What most of you don't rwalise 8s that rejecting market forces is what actuallises your fears. You Your currencies values are determined by fundamentals.

It is PMB'S hatred of market forces that has plunged the Naira this low. From 1999 to May 2015 the Naira's value moved from 100 to 216 at the black market. That is over 16yrs.

Under Buhari,, from 2015 till date, who is anti-market, the Naira has fallen from 216 to 575 today. That is under a within a space 6. 5 years.

You don't get it. It's not about whether Osinbajo is right or wrong (from an economically sound policy view), but rather the perception of its effects by the general public. Folks like yourself that have extensive knowledge on 'economic theory and practicals' are in the minority. And no amount of verbose economics jargon would convince the average Nigerian (right now) that it is in their interest to float the naira with a possibility of the currency further losing its value than its current exchange rate against the dollar, not to mention the brutal inflation that's likely to follow.

This administration has obviously mismanaged whatever amount of goodwill it once had amongst the general populace, which could perhaps have come in handy as leverage to push the policy through. But as it stands, the most likely effects of Osinbajo's suggestion would certainly not be well received, no matter how well-intentioned. Unless its unpleasant effects can somehow be cushioned or mitigated. That's the crux of my argument.

seborrhic:
Is it as simple as that and is that supposed to be the thought process of an acclaimed intellectual?
On the one hand u av a dullard that believes forex should be hoarded and given only to cronies,on the other is another dullard that says CBN should just allow the Naira to float.
Even in the most advanced and capitalist of countries,they sometimes intervene in the currency market,just that in our case we have a horrible president,a seemingly mentally challenged CBN governor and a cabinet of glorified dullards.
He has always been a dullard,forget all that issue of him being a professor of law.

your hate for osinbajo sir is very special on this global sphere

TheRareGem1:
Nigerians just want to put food on their tables, live peacefully and enjoy the dividend of democracy. The FX is putting pressure on everything.

Personally, Emefiele has been dishing out wacky policies, been a mess of monetary and financial policies. How can a prof of law be giving you brilliant suggestions all the time. That is how he did during cryto ban.

VP's assertion is spot on.

The advice is not smart. Going by the history of FX in nigeria. Anytime the official exchange rate is moved upwards, the black market rate moves upwards even more. If you move official rate now to 600, believe me the black market will hit 1k. Mark this word.

The market is run by insane stupid greedy rogues so the only way to get a bit hold of them is the lower bank rate.

BosseJ:
You don't get it. It's not about whether Osinbajo is right or wrong (from an economically sound policy view), but rather the perception of its effects by the general public. Folks like yourself that have extensive knowledge on 'economic theory and practicals' are in the minority. And no amount of verbose economics jargon would convince the average Nigerian (right now) that it is in their interest to float the naira with a possibility of the currency further losing its value than its current exchange rate against the dollar, not to mention the brutal inflation that's likely to follow.

This administration has obviously mismanaged whatever amount of goodwill it once had amongst the general populace, which could perhaps have come in handy as leverage to push the policy through. But as it stands, the most likely effects of Osinbajo's suggestion would certainly not be well received, no matter how well-intentioned. Unless its unpleasant effects can somehow be cushioned or mitigated. That's the crux of my argument.

You're quite correct. It's like when one hears a country taking an IMF loan.

Truth be told, the actual value of the Naira is around 480. All government needs to do now is to resume sale of dollars to the BDC's which I'm sure would strengthen the value back to around 480. The CBN thereafter devalues the official rate to around 460 or 470. This will restore sanity to the market.

Lamido Sanusi met something similar when he came on board in 2009. The official rate was around 120 and parallel rate was about 190. He simply devalued the official rate to 155 and the parallel rate firmed up to 160.

A lot of the demand for forex at the official rate isn't real but speculative. Excess demand at the official rate would dry up if the price was market determined.

DubaiLandLord2:
This man dey always talk like say he is not part of the FG.

His role as the vice President is limited. Bubu and the cabals are the ones really in charge

grandstar:
You're quite correct. It's like when one hears a country taking an IMF loan.

Truth be told, the actual value of the Naira is around 480. All government needs to do now is to resume sale of dollars to the BDC's which I'm sure would strengthen the value back to around 480. The CBN thereafter devalues the official rate to around 460 or 470. This will restore sanity to the market.

Lamido Sanusi met something similar when he came on board in 2009. The official rate was around 120 and parallel rate was about 190. He simply devalued the official rate to 155 and the parallel rate firmed up to 160.

A lot of the demand for forex at the official rate isn't real but speculative. Excess demand at the official rate would dry up if the price was market determined.

In your professional judgement (I assume you're an economist of sort, or at least you appear to have some extensive knowledge of the subject), why do you think Emefiele hasn't explored the same solution Sanusi deployed when faced with a similar situation?

SarkinYarki:
I am beginning to suspect the mental capacity of this man to fix Nigeria because it seems he doesn't understand the problem at all ....If you don't know if CBN fixes the rate at 600 naira tomorrow it will still find its way into the hands of Abokis who would na sell at 750 ...the scarcity of dollars is deliberately just like the scarcity of passport booklets , scarcity of electricity and Apapa hold up ..this is how northerners create false scarcity in other to make money ...They have even started it with train tickets

God bless you for seeing it as it is. It is a business for a lot of people, not just BDCs but also cryptocurrency exchangers. They'll always be higher rate than what banks and CBN is offering. It's already a norm & job creation for many including myself to be honest. Allowing free fall will worsen inflation.

BosseJ:
In your professional judgement (I assume you're an economist of sort, or at least you appear to have some extensive knowledge of the subject), why do you think Emefiele hasn't explored the same solution one Sanusi deployed when faced with a similar situation?

The problem is Buhari. He has a hatred of devaluation which is anti-market. . Ever since his assumption of office he has been meddling in the setting of the exchange rate.

https://www.nairaland.com/4861949/lamido-sanusi-laments-buharis-economic

mfm04622:
The CBN is INDEPENDENT!

Even the President can't give order to CBN! From the moment a CBN governor is confirmed and sworn in, he no longer has an oga!

It's actual semi-autonomous but in developed nations, it usually independent.

Buhari does not respect its semi-autonomy unfortunately hence the present problem.

https://www.nairaland.com/4861949/lamido-sanusi-laments-buharis-economic

kay10:
Pls fix the dollar exchange to 490, Pls

I think it should be between 470 and 480

Blakjewelry:
The true value is 460 because that is what banks are charging

Wow. Thanks for this.

SarkinYarki:
I am beginning to suspect the mental capacity of this man to fix Nigeria because it seems he doesn't understand the problem at all ....If you don't know if CBN fixes the rate at 600 naira tomorrow it will still find its way into the hands of Abokis who would na sell at 750 ...the scarcity of dollars is deliberately just like the scarcity of passport booklets , scarcity of electricity and Apapa hold up ..this is how northerners create false scarcity in other to make money ...They have even started it with train tickets

Absolutely right. Perfect understanding.

Yeye Osinbajo! Yeye executives!! How curb excess liquidity in naira and dollar in the places exactly they are in INSIDE TRADING in MDAs', NASS, et al is rocket science, abi. Mumus!! ! God should just help break Nigeria..,

How much is the dollar buying and selling at the parallel market today ?

Hahaha
Which true value?
What u guys are talking about is greed value!