₦airaland Forum

So the daily drop(not singular drop o) in foreign reserves- what caused it? U r just a jocular joker

DeLaRue:
The naira is not even being subsidised now.

Some of this so-called experts don't even know what is going on.

1. During Mr Buhari's regime, the CBN was supplying about 65% of the total dollars sold in Nigeria.

2. As of today, that figure has fallen to around 3%!

3. Since December up to now, the CBN has been stepping in to buy dollars because more dollars have been coming into Nigeria than the market can absorb. If the CBN has not been buying the excess dollars, the naira may have appreciated too fast, may be to N1400. That would have created a new period of instability. The CBN prefers the naira to gain or lose very slowly. That is what businesses and investors prefer. They don't want drama.

That situation can change but for about 3 months now, the net contribution of the CBN to the forex market is only about 3%.

That is a fantastic development.

The Naira is currently operating on its own based on market forces, with little to no net contribution from the CBN.

DeLaRue:
So you didn't see where I said the excess dollars were coming from a rush of foreign buyers into Nigerian Stocks and investment instruments.

Some of you are just hapless.

how questions does what you say you said answer?

is that the only thing I asked you?

1. where is the "excess dollars" coming from?

which treasury are you referring to?

how is dollars entering nigeria through nigerian stocks?

how much of nigerian stocks have been purchased by this "excess dollars"?

2. if you say that "The Naira is currently operating on its own based on market forces, with little to no net contribution from the CBN", how come the same you is saying that "if the CBN has not been buying the excess dollars, the naira may have appreciated too fast, may be to N1400"?

helinues:
Is that all?

according to you

helinues:
Toh

Na only Nigeria opposition dey think say the dollar naira rate must return back to 2015.

Reasonable number of them did not attend the economics class in secondary school

Very illiterate set of people

oga, what was APC complaining about in 2015?

are you saying those in APC who said dollar was too high in 2015 that you supported didnt attend economics class in secondary school?

Racoon:
https://www.vanguardngr.com/2025/03/why-exchange-rate-stability-is-not-suatainable-experts/

All efforts to talk down the naira have failed.

CBN na your mate.

It is not even 2bn they spent but $2bn NET (negative)meaning they could have had a total inflow of 6bn from crude & new loans and then sold $8bn in the fx market

Blazetrailer:
Guy, go and check statistics first before coming here to spew rubbish. A simple check online would have hinted your brain you were about to tell lies on a public forum..... they could not have supplied $11bn in December alone and even in 2025 records shows they have spent nearly $2bn already in pushing forex into the markets in Nigeria......so.what are you on about??

Common use your head jarey!!

helinues:
Toh

Na only Nigeria opposition dey think say the dollar naira rate must return back to 2015.

Reasonable number of them did not attend the economics class in secondary school

Very illiterate set of people

But you that attended believed over 100% fall is normal from 2023 - 2025

You are a jocular person... plenty knowledge but wrong application.. pple are telling u d reserves are dropping daily, u are talking about FPI. Oya now let them continue burning $1.3bn per month and lets see if we will have any reserves in 2 years time

DeLaRue:
A lot of 'foreign investment' has been flocking into Nigerian Stocks, treasury etc. That is where the 'excess' dollars is coming from.

Have you noticed that share prices have been rising strongly on the Nigerian Stock Exchange. That's because there is a rush of foreign money buying up these shares.

That's the positive side.

The negative side is that many of the foreign investors have already made 20% or more profit on the shares they bought, but that profit increases even faster the more the naira gains value.

The fear of the CBN is that if the naira gains value too fast, for instance it drops to 1,380 or 1,400 too fast, many of the foreign investor may sell up because of their massive profit and move their money out of the country too soon.

Imagine you're an investment company in the UK, and in a typical year, you probably make 10 - 15% return.

You see an opportunity in a faster growing economy (Nigeria) where over the course of a year, you can make a 25 - 30% return if you buy Nigerian shares. And so, you invest in Nigerian shares. But within 3 months, you already have 20% profit on the shares (somethingyou can only dream of in the UK). Then the naira gains value sharply ( to about N1,350) - this naira gain will suddenly increase your profit to may 40%. In that scenario, you'll be tempted to sell those shares, take your 40% profit, and withdraw your dollars back to your country laughing all the way to the bank.

If most of the foreign investors react in a similar way, and bank their profits, that means dollar outflow will spike massively. The CBN will have to provide all that dollar immediately, thus putting fresh pressure on the naira.

In order to avoid such instability, the CBN does step into the market from time to time to buy excess dollars in order to ensure that the naira doesn't gain value too quickly.

It is like any market. For example, if there are too many tomatoes (Dollars) in a market that buyers can buy, the price of tomatoes will fall drastically. However if a big buyer (CBN) comes in and buys up most of the excess tomatoes, the price of tomatoes will rise and stabilise close to its usual price.

So, while the ordinary man on the street want naira to gain fast, CBN prefers a slow and steady process. Buying excess dollars is a way of ensuring the naira doesn't gain value too fast.


It is a complex subject, but I hope my explanation helps a little bit.

Racoon:
Amidst strong appreciation of the local currency, the Naira, in the foreign exchange market, there are indications that the fate of the currency is still hanging in the balance.

Financial Vanguard tracking of developments in the currency market last weekend indicates that the Naira has appreciated by 9.61 percent in the parallel market to N1,505/ $1 up from this year’s high of N1,665/$1, while the official market has recorded 3.1 percent appreciation to N1,500/$1 up from N1,548/$1. It also has a very positive and impactful outcome on businesses.

“What you are seeing is a very good trend and my hope is that this will be sustained. And then my advice is that the fiscal authority should complement the monetary authorities to ensure that we don’t see an unnecessary surge in liquidity which could dislocate the current trajectory of stability in the macroeconomic environment, especially the stability in the exchange rate”.


Naira Appreciation Alone can’t Moderate Price Stability - Adonri
Reacting to the recent appreciation of the Naira, David Adonri, Analysts/ Executive Vice Chairman at Highcap Securities Limited, said: “Recent appreciation of the Naira may not immediately reflect on the price of goods because of the lag between cause and effect in economics.

Other than currency volatility, the economy also has other factors fueling inflation to contend with. If they all simultaneously moderate, price stability can be feasible.

“Judging from the recent revelation by a highly respected economist that FGN has so far pumped in about $8 billion to prop up the Naira, the recent appreciation may be a contrived gimmick. ”Notwithstanding, the Naira has every reason to start appreciating considering the reduction of the pressure on it from the petroleum sector and the pass through effect of declining energy cost.

”The game changer will come if and when FGN is able to liberate the rural economy from the strange hold of bandits and terrorists so as to close the yawning domestic supply gap”.

Impact on Economy Depends on Sustainability Egbomeade
In his own comments, Clifford Egbomeade, Analyst and Communications Expert, said: “The recent appreciation of the Naira is a positive signal, particularly for businesses that rely on imported inputs and consumers facing inflationary pressures.

”The real impact on the broader economy depends on whether this trend is sustained. If the appreciation is driven by strong fundamentals, such as: improved foreign exchange reserves, increased foreign investment, and stronger export performance.

”However, if the rise is merely a result of short-term interventions like CBN liquidity injections or speculative activity, the effects may be temporary, with little long-term impact”.

“Generally, if the Naira maintains stability for at least a quarter, businesses will start experiencing tangible relief, particularly in pricing and operational costs.

”Sustaining this appreciation over the medium to long term depends on structural reforms rather than temporary market adjustments. A stronger naira requires consistent foreign exchange inflows from non-oil exports, improved investor confidence, and a reduction in the economy’s reliance on speculative forex demand. Without these, any gains may be eroded by external shocks or policy reversals.

“Additionally, inflation control is critical if domestic prices continue to rise, any currency gains may not translate into real economic benefits. The government must focus on enhancing local production, reducing import dependence, and ensuring a stable monetary policy environment to make this appreciation more than just a fleeting occurrence”.

https://www.vanguardngr.com/2025/03/why-exchange-rate-stability-is-not-suatainable-experts/

The headline of the article contradicts the real body of the article with the absolutism of the adjectives used or approves by the Editor. This is probably intended to draw readers into the body of the article or mislead. The effective use of English language in terms of CLARITY is very important by Journalists and their Editors (who are responsible for the final vetting of news reports that are filed in by all their news correspondents).


Under the subheading:

Naira Appreciation Alone can’t Moderate Price Stability - Adonri

David Adonri CLEARLY states the specifics and FACTS right BELOW:


"Reacting to the recent appreciation of the Naira, David Adonri, Analysts/ Executive Vice Chairman at Highcap Securities Limited, said: “Recent appreciation of the Naira may not immediately reflect on the price of goods because of the lag between cause and effect in economics."

Other than currency volatility, the economy also has other factors fueling inflation to contend with. If they all simultaneously moderate, price stability can be feasible.

“Judging from the recent revelation by a highly respected economist that FGN has so far pumped in about $8 billion to prop up the Naira, the recent appreciation may be a contrived gimmick. ”Notwithstanding, the Naira has every reason to start appreciating considering the reduction of the pressure on it from the petroleum sector and the pass through effect of declining energy cost.

”The game changer will come if and when FGN is able to liberate the rural economy from the strange hold of bandits and terrorists so as to close the yawning domestic supply gap”.

DeLaRue:
The naira is not even being subsidised now.

Some of this so-called experts don't even know what is going on.

1. During Mr Buhari's regime, the CBN was supplying about 65% of the total dollars sold in Nigeria.

2. As of today, that figure has fallen to around 3%!

3. Since December up to now, the CBN has been stepping in to buy dollars because more dollars have been coming into Nigeria than the market can absorb. If the CBN has not been buying the excess dollars, the naira may have appreciated too fast, may be to N1400. That would have created a new period of instability. The CBN prefers the naira to gain or lose very slowly. That is what businesses and investors prefer. They don't want drama.

That situation can change but for about 3 months now, the net contribution of the CBN to the forex market is only about 3%.

That is a fantastic development.

The Naira is currently operating on its own based on market forces, with little to no net contribution from the CBN.

Impressive takes.

Konquest:
Impressive takes.

Nah so.. goan check d rate now

DeLaRue:
A lot of 'foreign investment' has been flocking into Nigerian Stocks, treasury etc. That is where the 'excess' dollars is coming from.

Have you noticed that share prices have been rising strongly on the Nigerian Stock Exchange. That's because there is a rush of foreign money buying up these shares.

That's the positive side.

The negative side is that many of the foreign investors have already made 20% or more profit on the shares they bought, but that profit increases even faster the more the naira gains value.

The fear of the CBN is that if the naira gains value too fast, for instance it drops to 1,380 or 1,400 too fast, many of the foreign investor may sell up because of their massive profit and move their money out of the country too soon.


Imagine you're an investment company in the UK, and in a typical year, you probably make 10 - 15% return.

You see an opportunity in a faster growing economy (Nigeria) where over the course of a year, you can make a 25 - 30% return if you buy Nigerian shares. And so, you invest in Nigerian shares. But within 3 months, you already have 20% profit on the shares (something you can only dream of in the UK). Then the naira gains value sharply ( to about N1,350) - this naira gain will suddenly increase your profit to may 40%. In that scenario, you'll be tempted to sell those shares, take your 40% profit, and withdraw your dollars back to your country laughing all the way to the bank.

If most of the foreign investors react in a similar way, and bank their profits, that means dollar outflow will spike massively. The CBN will have to provide all that dollar immediately, thus putting fresh pressure on the naira.

In order to avoid such instability, the CBN does step into the market from time to time to buy excess dollars in order to ensure that the naira doesn't gain value too quickly.

It is like any market. For example, if there are too many tomatoes (Dollars) in a market that buyers can buy, the price of tomatoes will fall drastically. However if a big buyer (CBN) comes in and buys up most of the excess tomatoes, the price of tomatoes will rise and stabilise close to its usual price.

So, while the ordinary man on the street want naira to gain fast, CBN prefers a slow and steady process. Buying excess dollars is a way of ensuring the naira doesn't gain value too fast.

It is a complex subject, but I hope my explanation helps a little bit.

Indeed, that's the dark side of "Hot Money" or FPI. It's a double-edged sword if not properly regulated by the authorities in any financial ecosystem or Emerging Markets.

You're CLEARLY well informed financially but a few of the posters that I've seen quoting your posts here "rambling on" are just NOT well grounded in financial literacy. They just rehash beer parlor stories and engage in puerile circular reasoning while trying to sound sophisticated. Those of us who are more knowledgeable can easily suss them out.

The EFEMS deployment in December of 2024 has indeed partly been responsible for the exchange rate stability due to the transparency in quotes and removal of inefficiencies that existed prior to the EFEMS implementation.

galserv:
Speculators and pigs are in serious pains

Pain rhymes with Gains! 😁

NothingDoMe:
Pain rhymes with Gains! 😁

Continue deceiving yourself...

galserv:
Continue deceiving yourself...

Huh? I sold $3000 for N1550 just now now as we dey talk. 🤣🤣

Normally it should have been higher today but it's weekend and prices are stable or come down slightly.

I see it going upwards Monday.