Defending naira is not new. It has been the practice since 1999 but it is more prolonged and consistent under Buhari government.

Forex market indices and CBN official rate created two prices for dollar under Buhari government.

Sources of dollars in Nigeria are:

CBN from crude oil sales

Foreign investors

Exporters

Remittance from Nigerians abroad

If a dollar goes for 1000 naira, government may feel embarrassed and ask the CBN to defend the naira. CBN does this by selling the dollars realized from crude oil sales at a lower rate eg 450 naira to a dollar.

1. But unfortunately CBN does have control over the dollar inflow from other sources listed above.

2. Other sources of dollars will like to sell at the price dictated by forex market to get value for their money

3. The dollars with CBN is not enough for Nigerians who needs it to import goods, raw materials, pay school fees abroad etc

The scam

1.Those who got the dollars from CBN at reduced price returned it back to Nigerians and sell it at forex market rates (1000 naira) instead of spending it abroad as CBN expected.

2. If Dangote for example buys dollars from CBN at the rate of 450 a dollar, import wheat to make spaghetti, he sells the spaghetti at same price the other company that bought the dollar at the rate of 1000 naira. This is a big scam

3. Selling dollars at a cheaper rate i.e. 400 naira compare to original value of 1000 for example is a way of looting the treasury because few influential Nigerians had access to the cheaper dollar and then resell to millions of Nigerians at higher price

Many Nigerians who are condemning the new policy have nothing to do with forex. Those who are importers and exporters understand better

N

Biodun556:

Many Nigerians who are condemning the new policy have nothing to do with forex. Those who are importers and exporters understand better

Why the sudden attacks on "Our darling daddy"....?

ImmaculateJOE:

Why the sudden attacks on "Our darling daddy"....?

Which of the darling daddies?

Naira will hit #1000 to a dollar by December latest. Countries who float their currencies are countries with stable economies. Every other countries with unstable economies like Nigeria operate a fix forex rate to peg down inflation.

Now the defence against naira has been removed by Tinubu and a free fall of naira will be too monumental. He only succeeded in ridding off cabals, but to the detriment of Nigerians.


What Tinubu simply did is to remove anything that serves as cushioning effect to Nigerians at the expense of the government to the expense of Nigerians just like subsidy.

Market forces determining our fx rate is a disaster waiting to happen. We are importing nation and do our businesses in dollars , so dollar will keep been scarce and that will put pressure on the naira further.

Pierohandsome:
Naira will hit #1000 to a dollar by December latest. Countries who float their currencies are countries with stable economies. Every other countries with unstable economies like Nigeria operate a fix forex rate to peg down inflation.

Now the defence against naira has been removed by Tinubu and a free fall of naira will be too monumental. He only succeeded in ridding off cabals, but to the detriment of Nigerians.


What Tinubu simply did is to remove anything that serves as cushioning effect to Nigerians at the expense of the government to the expense of Nigerians just like subsidy.

Market forces determining our fx rate is a disaster waiting to happen. We are importing nation and do our businesses in dollars , so dollar will keep been scarce and that will put pressure on the naira further.

Can CBN provide all dollars needed by Nigerians to trade abroad?

Biodun556:


Can CBN provide all dollars needed by Nigerians to trade abroad?

they cannot and that is where the pressure will hit naira because the law of elasticity of demand will be activated, and the dollar will keep soaring high against naira because every business person needs it. And we do not export much aside crude oil, so our fx reserve is limited

The FX market is one whole conduit pipe.

Do you know that some people were buying dollar at less than ₦1? And the CBN will tie it to invisible goods.

We shall all be free if we had removed Buhari's invisible hands.

Pierohandsome:
they cannot and that is where the pressure will hit naira because the law of elasticity of demand will be activated, and the dollar will keep soaring high against naira because every business person needs it. And we do not export much aside crude oil, so our fx reserve is limited

If that is the case I think floating of naira is the safest

Biodun556:


If that is the case I think floating of naira is the safest

how is it safest,by allowing the law of demand and supply to control it without control from cbn?

Pierohandsome:
how is it safest,by allowing the law of demand and supply to control it without control from cbn?

I learnt that majority of Nigerians don't have access to the dollars from the CBN that's why they bought it at the parallel market

Even banks collect dollars from CBN at the rate of 450 and gave them to abokis to sell at 650/700 instead of selling it directly to customers

This is cheating

Biodun556:
Defending naira is not new. It has been the practice since 1999 but it is more prolonged and consistent under Buhari government.

Forex market indices and CBN official rate created two prices for dollar under Buhari government.

Sources of dollars in Nigeria are:

CBN from crude oil sales

Foreign investors

Exporters

Remittance from Nigerians abroad

If a dollar goes for 1000 naira, government may feel embarrassed and ask the CBN to defend the naira. CBN does this by selling the dollars realized from crude oil sales at a lower rate eg 450 naira to a dollar.

1. But unfortunately CBN does have control over the dollar inflow from other sources listed above.

2. Other sources of dollars will like to sell at the price dictated by forex market to get value for their money

3. The dollars with CBN is not enough for Nigerians who needs it to import goods, raw materials, pay school fees abroad etc

The scam

1.Those who got the dollars from CBN at reduced price returned it back to Nigerians and sell it at forex market rates (1000 naira) instead of spending it abroad as CBN expected.

2. If Dangote for example buys dollars from CBN at the rate of 450 a dollar, import wheat to make spaghetti, he sells the spaghetti at same price the other company that bought the dollar at the rate of 1000 naira. This is a big scam

3. Selling dollars at a cheaper rate i.e. 400 naira compare to original value of 1000 for example is a way of looting the treasury because few influential Nigerians had access to the cheaper dollar and then resell to millions of Nigerians at higher price

Surprised!
You make sense!

Biodun556:


I learnt that majority of Nigerians don't have access to the dollars from the CBN that's why they bought it at the parallel market

Even banks collect dollars from CBN at the rate of 450 and gave them to abokis to sell at 650/700 instead of selling it directly to customers

This is cheating

that is the only area the policy curtailed a bit but not still totally.

Because our fx reserve is still limited, not everyone will still get it from the bank and will still resort to aboki who will still sell it higher. You can never eradicate parallel market as long as we are importing nations

But you praised Buhari all through and claimed that igbos hate the North. Anyway, Tinubu should continue to free the economy from government interference which is what Igbos have always wanted. Meanwhile that won't stop him from being kicked out, Ngige was a "performer" for three year but was sent packing

MXrep:
But you praised Buhari all through and claimed that igbos hate the North. Anyway, Tinubu should continue to free the economy from government interference which is what Igbos have always wanted. Meanwhile that won't stop him from being kicked out, Ngige was a "performer" for three year but was sent packing

If I praised Buhari it doesn't mean that I should ignore some of his flaws

Pierohandsome:
Naira will hit #1000 to a dollar by December latest.

Naira will not hit #1000 in December.

Parachoko:
Naira will not hit #1000 in December.

Yea

Biodun556:


If I praised Buhari it doesn't mean that I should ignore some of his flaws

After he has left office? You are not serious

Biodun556:


Yea

And it won't fall close to #1000 at all

.

Biodun556:
Defending naira is not new. It has been the practice since 1999 but it is more prolonged and consistent under Buhari government.

Forex market indices and CBN official rate created two prices for dollar under Buhari government.

Sources of dollars in Nigeria are:

CBN from crude oil sales

Foreign investors

Exporters

Remittance from Nigerians abroad

If a dollar goes for 1000 naira, government may feel embarrassed and ask the CBN to defend the naira. CBN does this by selling the dollars realized from crude oil sales at a lower rate eg 450 naira to a dollar.

1. But unfortunately CBN does have control over the dollar inflow from other sources listed above.

2. Other sources of dollars will like to sell at the price dictated by forex market to get value for their money

3. The dollars with CBN is not enough for Nigerians who needs it to import goods, raw materials, pay school fees abroad etc

The scam

1.Those who got the dollars from CBN at reduced price returned it back to Nigerians and sell it at forex market rates (1000 naira) instead of spending it abroad as CBN expected.

2. If Dangote for example buys dollars from CBN at the rate of 450 a dollar, import wheat to make spaghetti, he sells the spaghetti at same price the other company that bought the dollar at the rate of 1000 naira. This is a big scam

3. Selling dollars at a cheaper rate i.e. 400 naira compare to original value of 1000 for example is a way of looting the treasury because few influential Nigerians had access to the cheaper dollar and then resell to millions of Nigerians at higher price

God shall punish people like you.. it was still the same you that defended everything buhari did and call anyone against his buffonry policy thinking you are playing politics but turn around now to b against the same buhari u defended his all that enabled him to destroyed the country.. all that you lot care about is your ego and god shall deal with u due course if there is actually something like god

Biodun556:


Can CBN provide all dollars needed by Nigerians to trade abroad?

oga, cbn can. One of the major reasons for shortage of fx is the monumental looting of money by politicians and government officials which put so much pressure on fx.
What do you think happens when all those billion and trillions are looted? We just heard of how 500b was released monthly for "poverty alleviation". You hear of billions chopped in aviation ministry for rented Nigeria Air. Surely you heard of how much yari spent giving each senator 500k usd to become SP. As I asked, earlier, what do you think happens to the looted naira? I will tell you that the first thing that is done is that the money is mediately changed to USD! Taken abroad or warehoused locally!
Importers, your school fees, medical etc yes contributes, but a small fraction.

BUHARI IS BABA LEADEN.
TINUBU SHOULD ADOPT FAPRES FOTCS AND CTC FOCS TRFG NOW.

Pierohandsome:
they cannot and that is where the pressure will hit naira because the law of elasticity of demand will be activated, and the dollar will keep soaring high against naira because every business person needs it. And we do not export much aside crude oil, so our fx reserve is limited

But you only looking at one side - the demand. Yes, demand might increase, but there is also a supply part.

What if it (supply) also increases as well? What if (possibly) oil export or FDIs goes up?

What if diaspora remittances goes up? Don't forget, a major disincentive to inflows was this parallel market nonsense.

Like I've said, I'm not really a Tinubu fan, but this policy is the best for now. Let's see how it unfolds

Na WA oo
This emewerey self

I heard buck of the dollars with CBN is usually given to NNPC to import petrol.. Does it mean if we start refining our own petrol there will be enough dollars for others?

alezzy13:


But you only looking at one side - the demand. Yes, demand might increase, but there is also a supply part.

What if it (supply) also increases as well? What if (possibly) oil export or FDIs goes up?

What if diaspora remittances goes up? Don't forget, a major disincentive to inflows was this parallel market nonsense.

Like I've said, I'm not really a Tinubu fan, but this policy is the best for now. Let's see how it unfolds

lol! You make me laugh.

Where will the supply increase from different from the past? You are quoting probability and hypothesis which looks like a day dream.

What this government is doing is trying to remove the subsidy that the past government brought into the fx market. Now Nigerians will now start to pay for the actual value of the naira against the dollar that is what you are not getting.

Expect dollar to hit #1000 per dollar between now And December