kaboninc:


Firstly street trading for now has no significant effect because these street traders obtain their fx from BDCs.

Secondly there would always be a parallel black market. The government has to make sure it is never lucrative.

lemme give an analogy here, d rate dollars is been sold by cbn to banks and bdc's are diff and also on d streets, Y not all on d same official rate? haven't u seen a case where banks wil tell u to go n buy forex on d street? Do u remember when people buy dollars cheap in bank n sell at far higher prices on street some years back? Cbn won't stop dis shit because they make some shady deals tru it

Nairaland economists, you should be sure that the economists and risk analyst at the CBN knows what they are doing. But we need to learn from the Greek missteps. If Naira is allow to ride self in the situation it found self. Naira ha been a maltreated orphan that needs serious protection from CBN. Foreign reserve has been deflated by previous government and no domestic strength either in the form of manufacturing and so much loopholes in government pockets. Again, recurrent expenditure has been on the loose even when crude sell above 100 dollars. I repeat, if CBN should make the battered orphan called Naira war it on its own. Ours will be worse than Greek. The implication that Naira will be taken as hostage and we will loose it as it happens in Zimbabwe. Thanks Emefiele and his team. I expected Naira should be in the range of N650 to a dollar this was my prediction had Jonathan is reelected. Also, the budget need spend so much on infrastructure which will be driven by Naira. Of course inflation but Nigeria will rebuild it's economy gradually. And Naira claim it's place in global economy.

Harwoyeez:
d solution to it in some ways is that those who genuinely need forex wil get them and all others must go tru an import substitution development plan thereby freeing forex for those who need them. Also anoda is radical developmental project must be undertaken by govt in order to ease d pressure on forex demand

The Retail Dutch Auction System window operations, is based solely on actual demand of FOREX by the end users. it is an arrangement that allows the authorized dealers to request for only FOREX based on the actual application received from its end users. So you see the Dutch Auction System is probably not the problem.
And, how would consumers survive before the import substitution plan, industries kick-off? parley there will be chaos. e have to do the first things first. Government has to invest in industries before they implement any import-substitution measures.

Harwoyeez:
lemme give an analogy here, d rate dollars is been sold by cbn to banks and bdc's are diff and also on d streets, Y not all on d same official rate? haven't u seen a case where banks wil tell u to go n buy forex on d street? Do u remember when people buy dollars cheap in bank n sell at far higher prices on street some years back? Cbn won't stop dis shit because they make some shady deals tru it

to give skin to your argument, this so called Banks have no genuine records of those that bought the dollar. This are what has been killing Naira could with some great missteps of pass government under economic voodooist as NO I.

1freshdude:


The Retail Dutch Auction System window operations, is based solely on actual demand of FOREX by the end users. it is an arrangement that allows the authorized dealers to request for only FOREX based on the actual application received from its end users. So you see the Dutch Auction System is probably not the problem.
And, how would consumers survive before the import substitution plan, industries kick-off? parley there will be chaos. e have to do the first things first. Government has to invest in industries before they implement any import-substitution measures.

Govt investment in industries and infrastructure is d import substitution plan we talking here. Consumers wit genuine reason will get forex from banks or bdc's. Don't u know how things operate in Nigeria again when d unofficial becomes d official

1freshdude:


The Retail Dutch Auction System window operations, is based solely on actual demand of FOREX by the end users. it is an arrangement that allows the authorized dealers to request for only FOREX based on the actual application received from its end users. So you see the Dutch Auction System is probably not the problem.
And, how would consumers survive before the import substitution plan, industries kick-off? parley there will be chaos. e have to do the first things first. Government has to invest in industries before they implement any import-substitution measures.

How soon will these industries start running before Naira is rendered worthless. We need spend on critical infrastructure and agriculture which will make the economy move steadily. The time is now before the 2016 budget is unleashed.

suyamasta:
From my perspective this makes usd/gbp very hard to get hence the naira keeps getting weaker, let the naira ride on normal laws of demand and supply, i noticed naira keeps getting devalued even with all the recent hard policies by the CBN

I don't think some of you get it. the normal laws of demand and supply are being thwarted by some BDC's/dollar sellers so they can make more money at the deriment to the naira. when the cbn didn't put restrictions the naira was falling now that it has put restrictions the naira is still falling that tells us something that wrong. btw how many sectors in Nigerian economy and indeed the world do you see the normal laws of demand and supply work. Every item is control or manipulated by humans.
a good example is the recent fuel crisis. nnpc has made it clear that they imported more than enough fuel but some group of marketers decided to create scarcity in order to make more money especially in this "travelling period". I hope u get my point.

suyamasta:
From my perspective this makes usd/gbp very hard to get hence the naira keeps getting weaker, let the naira ride on normal laws of demand and supply, i noticed naira keeps getting devalued even with all the recent hard policies by the CBN

I don't think some of you get it. the normal laws of demand and supply are being thwarted by some BDC's/dollar sellers so they can make more money at the deriment to the naira. when the cbn didn't put restrictions the naira was falling now that it has put restrictions the naira is still falling that tells us something that wrong. btw how many sectors in Nigerian economy and indeed the world do you see the normal laws of demand and supply work. Every item is control or manipulated by humans.
a good example is the recent fuel crisis. nnpc has made it clear that they imported more than enough fuel but some group of marketers decided to create scarcity in order to make more money especially in this "travelling period". I hope u get my point.

fadhill:
to give skin to your argument, this so called Banks have no genuine records of those that bought the dollar. This are what has been killing Naira could with some great missteps of pass government under economic voodooist as NO I.

I doubt that this is true!
Have you bought FX from the CBN in the last 12months?
I bought FX about 3months ago from CBN and had to submit all my details and many other back up documents to convince them. Infact they did not give me the FX, they transferred it to the institution that I told them needed the fund, and it took about 10days. So I can not reconcile your claim.

egbonnla:
It is rather sad that the CBN Governor who is suppose to know better is taking strange decisions that are based on the PMB's body language in order to retain his job. PMB is interested in practicing a form of social economy system that may favour the common people on the short run. But the fact is that on the long run the economy will collapsed and everybody will become poor and PMB will become unpopular. Emir Sanusi stated more than a month ago that PMB needs help on . I will just enumerate few:

1.Falling oil price and 2016 budget

The reality is that our earning from oil will decline through next year. I found it strange that this fact was not taken care of in 2016 budget. As at today oil price has fallen below our budgeted projections for 2016 and there is possibility that it will fall further. It would have been realistic to put the oil price budget bench mark at 20usd per barrel. Considering our dwindling revenue, N6trillion budget is not feasible. I know some people will say recovered money from looters will augment the shortfall. This is laughable as we will be shocked that a larger per cent of the looted funds are not recoverable.

2. Oil Subsidy Payments

PMB has been advised by renowned economists like Soludo, Sanusi and Rewanne to remove oil subsidy but he is not favourable dispose to oil subsidy removal. The result, over N500Billion was recently paid to oil marketers. We still have fuel queues and Government is still owing oil marketers! Why is Nigeria still paying subsidies on oil? Imagine what N500Billion will do to building long lasting infrastructures that will provide more jobs and benefit the common people on the long run? The reality on ground is that Government cannot even sustain subsidy payments.

3. Devaluation of Naira
The CBN Governor knows better. He is only playing to the gallery. Despite his hype interventions, the dollar is exchanging for N260 as at today. Investors are shying away from Nigeria. Millions of jobs will be lost in coming months. Our foreign reserves is being depleted and inflation is increasing. Obviously CBN interventions are not working!

4. N5000 Stipends to the unemployed
I will only quote this proverb: Give a man fish,he will eat fish for a day. Teach him how to fish he will eat fish forever.
Finally I have a feeling that like GEJ, PMB is gradually being caged by selfish individuals who are bent on misleading him for their selfish interests. It is important that we realised that PMB is mortal. He needs our prayers and constructive criticism. We don't have to shout Sai Buhari even when things are going wrong....

The best comment so far on this thread.

Emefiele is only interested in saving his job. He knows the right thing but he is too afraid to do it.

This is a step in the right direction from CBN. I bet this critical situation beg for critical steps. We need not blame those that boxed us at this juncture. This is no time for blame game. It is better we sacrifice to save Naira. Nigeria has the population advantage and if we can find the alternative to those restricted import goods, our enonomy will rally from within. With spendings on critical infrastructure and agriculture premised on Naira, our industry will bounce back.

fadhill:
Nairaland economists, you should be sure that the economists and risk analyst at the CBN knows what they are doing. But we need to learn from the Greek missteps. If Naira is allow to ride self in the situation it found self. Naira ha been a maltreated orphan that needs serious protection from CBN. Foreign reserve has been deflated by previous government and no domestic strength either in the form of manufacturing and so much loopholes in government pockets. Again, recurrent expenditure has been on the loose even when crude sell above 100 dollars. I repeat, if CBN should make the battered orphan called Naira war it on its own. Ours will be worse than Greek. The implication that Naira will be taken as hostage and we will loose it as it happens in Zimbabwe. Thanks Emefiele and his team. I expected Naira should be in the range of N650 to a dollar this was my prediction had Jonathan is reelected. Also, the budget need spend so much on infrastructure which will be driven by Naira. Of course inflation but Nigeria will rebuild it's economy gradually. And Naira claim it's place in global economy.

The Greek is using Euro. The currency is still strong but their economy has collapsed. So what is your point?

Strong currency doesn't mean strong economy. Strong economy is brought about by investor confidence. This erratic polices will weaken the investor confidence and we may end up like Greece. FYI, Greek problem began when they started defaulting on loans, both lenders and and investors lost confidence in them and they went down.

I don't know ow this will change the price of the dollar but one thing I'm sure of is that yahoo boys and their abbokiis won't be happy about this. Thankfully, they av 90days left

Harwoyeez:
u didn't get my point, street trading of forex creates more pressure because we have an official rate and parallel market rate which shouldn't be, all forex transactns will av to go tru bdc's and bank. Op u understand

Does it matter where tomato is sold? Whether in the shop or the market? Will it change the demand for tomato? If the customers can't find it in the shop, they go to the market. The pressure remains the same.

This cbn move is childish. Makes it look like those that buy on the street can't find their way to BDC. Buying on street is just for convenience, nothing else.

Hakagure:
Simply put, Because the official price is not real, its subsidized. Official rate has a part govt pays for every dollar. Street value is the international value without CBN subsidy.

Ah, I see, I understand it now! Thank you for your knowledge!

mployer:


The Greek is using Euro. The currency is still strong but their economy has collapsed. So what is your point?

Strong currency doesn't mean strong economy. Strong economy is brought about by investor confidence. This erratic polices will weaken the investor confidence and we may end up like Greece. FYI, Greek problem began when they started defaulting on loans, both lenders and and investors lost confidence in them and they went down.

In fact, by records the Greek economic problem started before it joined the European Union. Greek falsify records of its economic indices in order to be admitted into the European Union. It wouldn't have been this worse for the Greek if it operates within it currency enclave that it can whip to repeat the Greek economic miracle post WW II economic downturn. My point is that Greek probably faced the most devastating economic crisis of her democracy .

For your information brother, Greek problem did not start when it defaulted on loans. If it did, the loan default is probably a symptom. And as both lenders and investors flee, Greek would have found socour in its currency and rebuild on the remnants. Greek was disadvantaged for it doest have economic identity in a currency of its own, the reason Greek need eat shit if that is the condition the economy that control euro bequith her. In our case, all the porn, horsy and castle that need rally for Naira the queen are falling. The onous is on the king, CBN , to take up the arms in order to savage the queen.

As the dollar is beign subsidised, we should not expect the CBN to fold harms and let it go in the way of other subsidy. The fact is that Naira is weak to fight all alone , otherwise we will spend N2000 to buy a loaf of bread in nearest future.

Hakagure:
https://www.nairaland.com/2791704/recession-horizon#40854608



Is any one out there thinking this through, stop playing politics and let the naira float, lets be fully liquid.

People just talk because they have keyboards.
Float go where?
Do you realize the inflation that will wreck the country if the currency is allowed to float? Or you just say things because they crossed your mind?
Even the elementary economics i did in high school reveals the silliness of your suggestion.

We operate a 'petrol-dollar economy' and as such,everything in this Country revolves around price of crude oil. Presently a Barrel is less than USD40.00 and more importantly, this product is not even selling-no buyers!

We import virtually everything,including toothpicks, in Nigeria. Apart from crude oil,Nigeria produces nothing! We are import dependent. An economy that is not producing or manufacturing will naturally have a weak currency.

Clamping down on BDC or Banks is not the solution here. It will only compound the situation. Crude oil cannot be the only hard currency earner for Nigeria;economy must be diversified.

This present policy will create scarcity of dollar which will further drive the exchange rate up!

I'm not an Economist but I believe strongly that the present price of crude oil at International market,coupled with no-buyer situation,has a strong relationship with our weak Naira.

We need a Soludo to manage this mess!

1freshdude:


Suyamasta, what makes you think a floating exchange rate would be best for an import dependent country?

Historical records shows that over protection of a nations currency doesnt guarantee healthy currency i like that CBN made fx scarcer for importers of goods we should be producing locally, but trying to make fx totally scarce for ALL importers and traders isnt the right way to go!

MAURI:


That will make importation of non-essential goods expensive. At some point the equilibrium will tilt when importation gets too expensive and less profitable. People will seek alternative and that will reduce the pressure on the supply of Naira against USD, GBP, EUR.

The problem here is that access to fx for importers and traders is way too artificially scarce, even for essential items, and for an import dependent economy it indirectly points toward inflationary pressure

AreaFada2:


That's the implication. Not that oil price is even high now to support the Naira.

More people are travelling abroad for leisure and business and demand for £/$/Euro increasing. That will further weaken the Naira.

Exactly

BigBen10:



I don't think some of you get it. the normal laws of demand and supply are being thwarted by some BDC's/dollar sellers so they can make more money at the deriment to the naira. when the cbn didn't put restrictions the naira was falling now that it has put restrictions the naira is still falling that tells us something that wrong. btw how many sectors in Nigerian economy and indeed the world do you see the normal laws of demand and supply work. Every item is control or manipulated by humans.
a good example is the recent fuel crisis. nnpc has made it clear that they imported more than enough fuel but some group of marketers decided to create scarcity in order to make more money especially in this "travelling period". I hope u get my point.

Yes i get your point, but the CBN should not make fx so unreachable to the point where people start seeing it as gold (scarcity promotes price increase) which indirectly hurts what they seek to protect, there should be a balance

Quick, simple and to the point.

1. The CBN is NOT meeting ALL legitimate requests for forex as it states it would into perpetuity.

2. This is forcing legitimate and illegitimate requests to meet their needs elsewhere, which has increased demand from BDCs in excess of their CBN allocation. The black market last resort meets the leftover rising demand at ever increasing prices to suppress demand and /or increase supply of dollars from those who may be hoarding it but hopefully can no longer resist the exchange rate.

3. The banks are also applying the black market rate for their customer dealings (sabotages the CBN's efforts) through foreign atm withdrawals and foreign currency online purchases. This increases the pressure to devalue , increases inflation and makes banks reluctant to meet legitimate requests from its retail customers. The desire to roundtrip and make 25% - 30% PROFIT by supplying their limited supply of dollars to the BDCs and black market instead of meeting direct customer demand is too alluring to resist. This is why only about 3 banks still meet request for PERSONAL Travel Allowance. Banks are not interested in supplying dollars at the official rate locally when they already pay out dollars to foreign banks at the black market rate.

Crisis is looming fast and the CBN governor may not survive it. He is playing Russian Roulette with the Naira and the economy indirectly. He is serving two Masters, the banks where he came from surreptitiously and trying to save his job by hopefully pleasing someone who did not appoint him .

People can still not make foreign currency cash deposits into their bank accounts. It has not helped the currency while destabilising people and their businesses.

I will leave it at that for now.

imhotep:
Oke nzuzu ajoka

Wrong, aristocracy is the rule of the very best of best regimes and people - socrates

This is Christmas period, demand for dollars will surely increase by importers and holiday seekers. Cbn doesn't know what it's doing. Call, sms or whatsapp 08037495005 for enquiries on PayPal funds or check our thread

imhotep:
Oke nzuzu ajoka

Ojokaaa

I wanna agree with CBN on this directive. Yes, it may initially translate into devaluation of the naira but in short term. The long term effect will be drastic appreciation of the naira against dollars and pounds provided other monetary policy controls are kept in line.

However, I still prefer an economist as the governor of CBN rather than these perverted and indisciplined bank chief executives. Most of them thrives on corruption and miss management of organizations.

Yes that is good one but very difficult to believe how it will work its only a matter of time and the Naira will rise against all hard currencies
I wish this country well

eaglechild:
Hyperregulating a fledgling economy.

This wasn't exactly how Dubai, Singapore and Korea emerged.

We need NOI back before this dullard kills off what is left of the ruins.

First of all, let me state the obvious: This administration recently depleted $4.3 billion from the foerign reserves in order to defend the naira.. While the wisdom of such an act is questionable, we know that if NOI had done her job with integrity, there wouldn't have been the kind of free flow of looted funds out of the CBN, most of which was used to fund Dasukigate and other idiotic looting projects. So, oga, the last person you want to bring back is NOI.

What I think the government is doing or attempting to do, is to avoid the consequence of carelessly deregulating the financial market which could have devastating effects, the likes of which we saw in Thailand and Mexico, back in late 1980s and 1990s. Though it may not seem intuitive, what we need at this moment is really very stringent control of economic activities followed by a gradual and well-monitored opening to vetted entities, as opposed to the rogues who have essentially ruined our economy because of free for all 'economic' activities without accountability.

After we get our institutions, such as BDC and banks in order, put a fullstop to stealing and looting our treasuries with impunity, then we can start to allow the naira to slide to its natural level, if that becomes necessary.

The jury is still out on the government's policy which seems to be moving towards spending our way out of predicted slow economic growth. I'm inclined to believe that the planned spending on infrastructure and the so-called N5,000 stipend will actually help to stimulate the economy in the short term, much like Obama's economic stimulus program helped to revive the US economy.

By the time our financial institutions have been genuinely sanitized and corruption curbed, we should see a massive infusion of new foreign investment into the economy. Unfortunately, it will get worse before it gets better.

tiar:
Quick, simple and to the point.

1. The CBN is NOT meeting ALL legitimate requests for forex as it states it would into perpetuity.

2. This is forcing legitimate and illegitimate requests to meet their needs elsewhere, which has increased demand from BDCs in excess of their CBN allocation. The black market last resort meets the leftover rising demand at ever increasing prices to suppress demand and /or increase supply of dollars from those who may be hoarding it but hopefully can no longer resist the exchange rate.

3. The banks are also applying the black market rate for their customer dealings (sabotages the CBN's efforts) through foreign atm withdrawals and foreign currency online purchases. This increases the pressure to devalue , increases inflation and makes banks reluctant to meet legitimate requests from its retail customers. The desire to roundtrip and make 25% - 30% PROFIT by supplying their limited supply of dollars to the BDCs and black market instead of meeting direct customer demand is too alluring to resist. This is why only about 3 banks still meet request for PERSONAL Travel Allowance. Banks are not interested in supplying dollars at the official rate locally when they already pay out dollars to foreign banks at the black market rate.

Crisis is looming fast and the CBN governor may not survive it. He is playing Russian Roulette with the Naira and the economy indirectly. He is serving two Masters, the banks where he came from surreptitiously and trying to save his job by hopefully pleasing someone who did not appoint him .

People can still not make foreign currency cash deposits into their bank accounts. It has not helped the currency while destabilising people and their businesses.

I will leave it at that for now.

Hi. Please can you mention the banks that currently issuing the $4000 BTA?
I want to buy from them.
Thanks

cirmuell:
high class mumu that's what's u are. Oponu

Your ma toto

Lol, more UN employment opportunities!

Chei Change

Chei Boooohari!

Anyway they asked for it, so they might as well enjoy it very well.