₦airaland Forum

Astrid4:
Most of nairaland folks are ignorant when it comes to issues on macroeconomic but let me school you

Nigeria has been practicing a floating exchange rate system since July 2023 this made naira drop at first to 750 but as time goes due to the higher demand for dollar it made it 1400 here we are at 1580, this is demand and supply pushing your exchange rate had it been we’re practicing a fixed exchange rate there would have several govt intervention such as what osinbajo did to manage our currency some years back but this Tinubu administration has sit back and let the market forces decide our fate, but I’m not so stupid to believe our fate is been decided by market forces alone that why I brought the concept of managed floating system which is a normal global economic standard where govt once in a while intervene in this exchange rate and it’s not a bad thing cos for a oil dependent country like a Nigeria practicing a floating system is going to cause a lot of economic instability for us, cos crisis in the gulf or Change in global oil practices can affect our exchange that’s where govt sometimes comes in to buffer these effect now sentimentally I believe Nigeria is practicing a managed float system. The difference between the managed float system and fixed exchanges rate system is that unlike the fixed the price of a currency is not been pegged at a particular where govt now pours a lot of money to keep this price at this rate but rather the managed float system only govt to intervene once in a while during global crisis or external shock

Government unifying an exchange rate doesn’t mean there won’t be black market but it will reduce the prevalence of black market, but black market will continue to strive due to reasons like demand and supply imbalance, restrictions and regulations, speculation and arbitrage,lack of access to official channels I don’t want to break this down one by one but unifying exchange is not to eliminate the activity of black market as they would continue to strive regardless but it is meant improve market driven exchange rate, increase transparency and access and also ensure strict effective regulations and enforcement e.g the DSS clampdown on this BDCs
Russia, India, Brazil also have black market just like Nigeria but it should noted that in all these countries their activities are been regulated

zero8zero:
So, if you were appointment a new CEO and you met 97% revenue was used to service debt plus the company borrowing for subsidy, while 3% is left for recurrent and capital expenditure. Will you continue to engage in the same policy that had wrecked the company's revenue?. You armchair Critics just sit down to open mouth ignorantly. It is easy for a child to drive a car with his mouth.

BadNews:
When will they sell it 1,000naira for 1 Dollar

AMI3:
Is that the new excuse they have sold to u guys?


How many months did naira rise to this point?
If it is GEJ will u say this?
What is bad is bad

zero8zero:
https://nairametrics.com/2025/02/06/naira-strengthens-at-unofficial-market-breaks-below-n1600/?amp=1

zero8zero:
You're too dumb to realize that when you printed 30trillion, it will definitely trigger inflation, when farmers cannot go to farm it will lead to inflation coupled with closed borders and all these happened under the last Administration.
Hehe.. he has done nothing to increase revenue?, So, how did foreign reserves grow?, the budget was increased yesterday from 47trillion to 54trillion, was it not as a result of revenue?, illiterate. The foreign loans that is being serviced and reduced to 68%, the funds being approved for several projects are from where?. And if you don't want to pay tax, go to an advanced country and live there, their citizens do not pay taxes.

DeltaBachelor:
Chai. God help us. One dollar was around 200 naira some years ago and the opposition complained bitterly. Now that they are in government, they want us to accept a dollar to 1,600 naira like it is the next set thing after vanilla sliced bread.

Very funny.

Anyways, for those pursuing their Japa dream and IELTS is a clog in the will of their progress, contact us through the number on our signature below. Serious candidates only please !

femisplash:
Exactly what Cardoso is implementing but those who have no faintest idea of economic fundamentals are talking smack. This is a standard practice.



Can you see that?, that seat requires tough decisions every chief policy maker is always confronted with. We see how US respond to this. I applaud Cardoso for having the guts to resist external pressures.

helinues:
Do the crying alone

Acidosis:
Buhari was a total failure. The people who voted him the second time are Nigeria's greatest enemies. He is the worst personality the universe has ever produced.


Nigeria GDP per capita was over $2,100 in 1981. Then, a certain failure of a human came and sent it to $900 by 1985.

It grew back to $3,200 in 2014. That same failure came in again & crashed it to $1,600 before leaving office in 2023.

Now, it's $800 under a Deloitte accountant! - Rinu

Acidosis:
What's your point? Because, as far as I know, Mr. Delloite accountant has done nothing incredible to increase the so-called revenue other than take more loans than ever, tax, and transfer the subsidy burden to you, the citizens.

Do you know what's funny? Every gain he anticipated with his bolekaja policy has been fully wiped out by inflation (an unanticipated consequence of his policy). So, when they celebrate and tell you that Customs earned N50 today against N20 in 2021, you can bet that the N30 "gain" is meaningless since Julius Berger will not accept the same funding as in 2021 for road construction. It's like celebrating a 50% increment in your salary when your landlord has just increased your rent by 200%.

Blazetrailer:
Lol...utter nonsense! More gibberish and even more buffonery in an attempt to appear more ignorant. I read halfway and could not contain my disdain for brazen half knowledge. Who truky need more schooling here on economics and exhange rate systems.

To start with, someone who does not know the full meaning of a floated exchange system and can not distinguish it from what is being practiced currently is even more ignorant than others he claims he is trying to educate(school). No floated exchange rate system has majority of its forex with the Central Bank/Reseve Bank. That sits with commercial banks. Again, no fully floated system sells forex to black market sellers at a rate different from the ruling market rate. This certainly is not practiced by US Federal Reserve,Bank of Canada, Bank of England, Bank of Australia, etc...who practice fully floated system. Those are just two examples, there are many more.

You could want to argue that these Banks I metioned above also intervene when the market hits a disequilibrium, that is right, but none of them take from their foreing or local reserves to try and force the rates back to equilibrum. They use monetary policy instruments like the LIBOR, prime rates, treasury bond rates/ risk free rates, etc to adjust things. NONE, I repeat, NONE sell forex to black market people at a different rates to the market under the guise influencing the rates to equilibrum and then monitor by taking feedbacks from the same sellers, in a system that has or intelligent information system to ensure credible data and integrity of the feedback/ reports from the BDCs.

Another mumbo jumbo from you is that the aim of unifying the exchange rate was not to eliminate black market, but the question to ask you then is what exactly did the government mean by saying they were unifying the rates?....should that not mean the elimination of multiple rates as there were two rates before the unification?

Nothing has changed, really, the only thingbthat has happened is that the Nigerian government devalued naira(IMF/Reuters/Bloomberg and other credible sources called it out as devaluation in February 2024 when CBN came to announce that there was an error in the system used to calcukate the market rate by FMDQ) amd as such the rates quoted were lower than it should be......imagine? As if they were using MS excel to determine rates before.

To support the existence of black market in a floated exhange rate system as normal using India(uses a managed floating system), Brazil( floating exhange rate system but pegged to USD, EURO and Yuan for imports and exports making it a managed one) and Russia( which uses intervention system before the
war and sanctions crises) while stating that Nigeria uses a fully floating exchange system shows how shallow and ignorant you are with regards to international finance and exhange systems. At this point, I knew you didn't know more than the surface on the subject you were claiming expertise in


I initially thought you had the stuff hence I was willing to engage but reading through all you have posted here, it is not different from what a government spokesman would say. It is devoid of any critical review to be sure of it is correct or not and if there are alternative views to explaining them. As someone else posted, it is lie-lie economics they sold to you all and you swallowd hook line and sinker, without thinking, as they predicted..

Lol...lie-lie economics, announced by the govt., peddled by the lowly intelligents.

Factcheck0001:
u these ibos self

If the agulu fraud does one thing u go haywire but if jagaban does 50 good things u talk down on it

ArcSEMPECJ:
You are calling Someone Agulu fraud but you love the real fraud who made a dollar from #216 to #1600...

Indeed, the real enemies of Nigeria can be checked from South West....

Astrid4:
Let’s do a paragraph by paragraph invalidity test
In your first paragraph you asserted that countries practicing floating exchange rate system has its foreign reserves in commercial bank that’s a blatant lie In a floating exchange rate system, the central bank typically holds the majority of the country's foreign exchange reserves, not commercial banks.
The central bank uses these reserves to manage the country's monetary policy, maintain financial stability, and intervene in the foreign exchange market if necessary.
Commercial banks, on the other hand, hold foreign exchange deposits and engage in foreign exchange transactions, but they do not typically hold the majority of the country's foreign exchange reserves. I hope I clarify the differences now

You further asserted that no fully floated system sells forex to black market, yeah you absolutely right Infact BOE, US feds none engage in this act, the fact CBN sells forex to black market negates the fully floated exchange rate system, you’re right that why I said earlier I quote “but I’m not so stupid to believe our fate is been decided by market forces alone that why I brought the concept of managed floating system which is a normal global economic standard where govt once in a while intervene in this exchange rate” this is where I postulated that nigeria is practicing a managed floating exchange rate system and I feel this is largely due to the fact that we’re oil dependent and external shock or global change in oil prices can have direct impact on our economic in order to buffer this effect we run a managed floated exchange rate where we have govt intervention not only using monetary policy tools but by selling forex to Black market I never asserted that nigeria exchange rate is fully floated but managed floated as a result of these interventions

Now to the unification of the exchange rate
Unifying exchange rates means having only one exchange rate for a country's currency.
Now it is thereby instructive for you to note that in as much as unification of an exchange rate can potentially eliminate the parallel market but it is not guarantee. There will still be prevalence of parallel market/black market rate like I point earlier I quote due to some reasons “... but black market will continue to strive due to reasons like demand and supply imbalance, restrictions and regulations, speculation and arbitrage,lack of access to official channels” now let’s me break it down

Demand and supply imbalances
Imagine a store selling dollars. If there aren't enough dollars (supply) to meet demand, people might turn to the black market. Unifying the exchange rate won't fix this imbalance.
Restrictions and Regulations
Suppose the government restricts who can buy dollars or sets limits on how much can be bought. This can drive people to the black market, where they can buy dollars without restrictions.
Speculation and Arbitrage*
Traders might exploit price differences between the official and black markets. For example, if the official rate is 1 USD = 500 Naira, but the black market rate is 1 USD = 600 Naira, traders might buy dollars at the official rate and sell them on the black market for a profit
Lack of Access to Official Channels
If people can't access official foreign exchange channels (e.g., banks), they might turn to the black market. Unifying the exchange rate won't help if people can't access the official market. Funny how how many Nigeria go to bank for forex nah BDC all of us dey go cos of easy accessibility
In conclusion Unifying an exchange rate is not a magic solution to eliminate the black market. The underlying issues driving the black market must be addressed to reduce its prevalence.

zero8zero:
You guys are now sounding like a broken record. You suffering from amnesia the FX subsidy that was spent to keep it that low every month.

doggedfighter:
Acid, you are good? 😊

Acidosis:
Oh, dear.. I'm good

How have you been?

Sonofgod1990:
Me with baby mama? God forbid

doggedfighter:
I am getting by.

Thanks !

zero8zero:
Proof it, slowpoke

Factcheck0001:
after removing subsidy n we stopped enriching conmen

Menclothing1:
Given biz