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Nairaland Forum / Nairaland / General / Business / CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan (15323 Views)
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Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Emeskhalifa(m): 3:21pm On Apr 08 |
9jatriot: So na all this una cut and join policies go safe naira? safe naira on a long run? 1 Like |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by phemray(m): 3:23pm On Apr 08 |
Good strong step to strengthen naira and weaken dollars. So, convert your dollar to naira b4 using it as collateral. 10 Likes 2 Shares |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Vikalinda(m): 3:24pm On Apr 08 |
A welcome development 7 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Omoawoke: 3:24pm On Apr 08 |
DenreleDave: People use dollars as collaterals to borrow money in bank. For instance, someone wants to borrow 50 million naira, then the person will keep the equivalent maybe 40k dollars. The 40k dollars will be kept in a restricted account, and the person will be offered the 50 million naira loan. Na one way some people use to benefit over exchange rate be that. It’s a great move to stop it and stop the further weakening of our dear Naira 13 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Bfly: 3:24pm On Apr 08 |
CBN so far is doing well to block financial loopholes exploited by the masses. Hopefully they start reviewing all thos so called investment companies used for money laundering owned by politicians. 9 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Geovanni412(m): 3:24pm On Apr 08 |
LegendHero: The opinion about business and productitvity is valid Until CBN reduces interest rates in their monthly meetings, no sensible Nigerian should rejoice at the change in exchange rate If I borrow at 22% to manufacture, I have to sell at a higher margin to break even compared to the China guy borrowing at 3-4% An increase in interest rate also affects the borrower's repayment plan to the banks. My take is this : Nigerians should Wait till next CBN 's monetary policy committee(MPC) meeting on May 20, 2024 If they announce another increase in basis points or interest rate from that 22% , expect more manufacturers and companies to shut down and this could lead to increase in prices of goods regardless of whatever the dollar is selling for. 5 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Artscollection: 3:25pm On Apr 08 |
SmartyPants: It is still them that is abusing naira, ordinary man don't need dollar for anything but the political class that loot and shares dollar hence the dollarisation of the economy. Yes the cbn are doing a great job there 7 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Omoawoke: 3:27pm On Apr 08 |
Macdeey: A whole lot of people do this. Ending this will shatter a lot of people hoarding naira 7 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by saintmm(m): 3:27pm On Apr 08 |
This even ought to be the first step in their policy revamping. Our economy has been heavily dollarized by this so called business men. Let everything within the geopolitical space called Nigerian start and finish with naira. Let the sleeping senators awake from their slumber and criminalize the use of dollars in any transaction or spendings within Nigerian 11 Likes 2 Shares |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by worksmart(m): 3:30pm On Apr 08 |
Please this is confusing to me. Foreign currency can be used as collateral? If you you have foreign currency why do you need a loan? It seems like nonsense to me! 2 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by clems88(m): 3:31pm On Apr 08 |
Let's see how far they will go. All I know is that the dollar is not having an organic fall, something is behind it. Las las na them go tire |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by PJ123: 3:41pm On Apr 08 |
Angelfrost: |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by BondRiv: 3:44pm On Apr 08 |
Take that unpatriotic lots. Naira must rise. 8 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by adioolayi(m): 3:44pm On Apr 08 |
If you want Naira loans....you can't be showing your Dolla account as collateral ..sell your dollar to have Naira .. simple 15 Likes 2 Shares |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by integrity16(m): 3:47pm On Apr 08 |
Technical knock out!!! 9 Likes 2 Shares |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by spencekat(m): 3:51pm On Apr 08 |
DeLaRue:And government agencies like NIMASA, NPA, NNPC etc 2 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Bluntemperor: 3:51pm On Apr 08 |
Donaldoni: It is Nigerian elites, including Politicians( Executives and Legislatures ( both in Federal and States + the Govt Agencies, including NNPC,MIDAS ( Min and Depts)- that goes about Converting their Budgets to Dollars and their prodigies- that makes Dollars to be like gold! • Nigerians Leaders always look for loopholes to render any laws useless but once we get a good leader - who will not take Nonsense but just obey the laws,then the Court will Fly! It is a good beginning,for Dollars have no reason to rise above N500.in every Transactions! 5 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by johhnnie(m): 3:57pm On Apr 08 |
worksmart: People hedge forward. Dollar is always appreciating against the naira. E.g, in 2014, $ was around 170 naira. If you took a $1m =170m naira flat loan at the time for a 10-year period. You would deposit $1m with the bank as collateral. Fast forward to 10 years after, $ is now 1300 naira. Remember, at a time, it was 1900naira. What it means, is that your $1m with the bank that was worth 170m naira in 2014 is now worth 1.3billion naira due to the depreciation of the naira over the years.. At some point, it was worth 1.95billion naira. Even, if you took the loan at 25 % reducing balance, thr loan would still be hovering around 700million naira today. So, if you decided to liquidate the loan when $ was around 1,950, you will still have a change of almost 1billion naira . Here is the catch, the rate at which $ is going down, if it goes below the 1000 naira per $ mark, you will still have your $1m intact sitting in the bank after paying of the loan. That is what your bank executives, their cronies, your politicians etc are doing. Just moving the $ around without lifting a finger. It has got to stop. Thank you 14 Likes 2 Shares |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Wainey: 4:00pm On Apr 08 |
Mynd44:who is cardi B? |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by michaellovaldo(m): 4:02pm On Apr 08 |
Dollar must crash to the barest minimum! 7 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by 9jatriot(m): 4:07pm On Apr 08 |
It is not just the elite and politicians that do these things. Most folks who form innocent and sometimes complain the most are even the worst. Many politicians do not understand finance that much so their own is even simple to deal with, it is those sophisticated investment bankers that are more difficult to deal with. I just got a spark on one use case for this policy. One thing guys used to do was take cheap loan from the bank, buy USD sometimes up to 1 million USD at official rate, when black market increase, they sell off. During Meffy's time, the gap was 650-450, so you did not even need it to increase during his time as the 200 naira different was more than enough. Imagine 200 naira times 1 million dollars, all made using the banks money without an industry or breaking a sweat. Sometimes, the collateral to the loan itself was the dollar that you purchased with the loan. I believe this is the real target of the CBN. The era of using loans at 16% to buy USD, and then using the same USD as collateral is gone. With MPR now at 24.5%, sourcing for loans will already be high so using it to buy USD will no longer be attractive. Now I know having an accountant as a president seems to have its advantage at the end of the day. 15 Likes 5 Shares |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Cantonese: 4:09pm On Apr 08 |
9jatriot: Have some form of shame please. Do not continue to be that confused and blind follower, who thinks others are like him. Did APC not meet the Nigerian naira @199 in 2015? Where does the same naira stand today? Were you five years old when APC took over power, in 2015? Were you a child when APC made several promises and failed them all? Was BAT not actively part of the reduction of Nigerians into severe poverty since 2015? So if BAT is trying to make amendments to what he actively participated in, what is there to celebrate? Leave other people out of your wrong ideas and ask your principal to let Nigerians have better lives. |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by 9jatriot(m): 4:19pm On Apr 08 |
The man mostly responsible for this, who members of your camp support was in court today to defend himself on how he mismanaged the economy when he was given the chance. Cantonese: 4 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by donproject2(m): 4:31pm On Apr 08 |
Geovanni412: You didn't talk about the good side of it...I have a thread here on Nairaland where I talked about pros and cons of increasing MPR. Perhaps, MPR has been increased to 24.75 in the latest MPC held last month. 2 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by donproject2(m): 4:34pm On Apr 08 |
worksmart: The trick is, they have their money in dollar, which they don't wish to sell, knowing fully well that dollar always appreciate against naira. So, instead of converting their dollar to naira, they will rather borrow naira and use dollar as a collateral, which is safe for them. 5 Likes 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Gandrova: 4:44pm On Apr 08 |
SmartyPants:We can achieve if the government insist on any transaction must be done in Naira. 2 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by rahmontech(m): 4:55pm On Apr 08 |
[code][/code] 9jatriot: Had to stop and pounder “lamba king” for a while and i realized it’s our very own Obigo . Lwkm 4 Likes
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Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by StOla: 4:58pm On Apr 08 |
Donaldoni: I swear it must be rendered useless by fire by force. I would have preferred a more aggressive suppression. 4 Likes |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by ufuosman(m): 4:59pm On Apr 08 |
Good one 1 Like |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by CCIA: 5:01pm On Apr 08 |
DenreleDave:Not all details is to be said to all men. It’s best you don’t get something to masturbate on. it’s for your mental health |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Geovanni412(m): 5:09pm On Apr 08 |
donproject2: I didn't mention it because the chances of that happening are minimal However, if interest rate is reduced from that 24.75% by 300 or 400 basis points, that means the policies are working and prices of goods will substantially reduce That would be a miracle- the type no Nigerian who is 50 yrs or younger has seen. More info: -https://www.nairaland.com/8042657/mpr-other-economic-metrics-explained post by Donproject2 explaining Monetary policy key terms to note 1 Like 1 Share |
Re: CBN Stops Use Of Foreign Currencies As Collateral For Naira Loan by Blackdisciple(m): 5:26pm On Apr 08 |
Hmmm I can't wait to see naira gains against dollar walai 1 Like |
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