;Dg

Go bless PMB

Russia spent $75billion trying to defend the Ruble in 2015 and the currency still ended that year close to 13% weaker. I don't know where our central bankers get their wisdom from.

Introduce a free float and let us know the true value of the Naira. From that point, we will know it cannot get any worse than it will get.

[quote author=EastGold post=54254280][/quote]
Wetin happen. I sh*t for your dormot?

stagger:
Russia spent $75billion trying to defend the Ruble in 2015 and the currency still ended that year close to 13% weaker. I don't know where our central bankers get their wisdom from.

Introduce a free float and let us know the true value of the Naira. From that point, we will know it cannot get any worse than it will get.

Nice analysis bro. Like I said this policy will not be sustainable for long. However floating the naira may lead to serious devaluation as it may trade for N1000 against a dollars. We need a new strategy that will keep things in balance.

Can som1 explain to me what will happen when there's no more dollars to 'pump'?
To me,this looks like treating d symptoms and ignoring d disease.

When it gets to 200 naira to a dollar, they can start bragging...but for now, all this is buuuulllsh.it

CBN is really clueless

This guy's know what to do but because they want to showboat to GEJ that they saved they are killing the economy

Only an economist will understand this

Yesterday when i checked with mallam it was exchanging at 485.

CBN and policy failure

Aufbauh:
This CBN momentous vigour to address the FX shortfall 'dey sweet my belle'.

I knew this was going to happen soon especially as naira began to drop again. The government would be too embarrassed to see they couldn't even keep it up for one week and so pump more $$$ into the system.

But for how long will this continue? How much exactly do we need to fix power and provide mortgage plans for our citizens so we are self dependent and thereby reduce pressure on dollar? This should be the main way this naira-dollar issue is attacked.

wristbangle:


Nice analysis bro. Like I said this policy will not be sustainable for long. However floating the naira may lead to serious devaluation as it may trade for N1000 against a dollars. We need a new strategy that will keep things in balance.

Do you have any suggestions?

To the capitalist not public.


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eph12:

Do you have any suggestions?

My brother, I wish I have but I am not well grounded in economics. I am still learning.

wristbangle:


Nice analysis bro. Like I said this policy will not be sustainable for long. However floating the naira may lead to serious devaluation as it may trade for N1000 against a dollars. We need a new strategy that will keep things in balance.

Why do we worry too much about Dollar exchange rate. Japanese Yen is 140 to a £, Iranian 40,000 to a pound, Indonesia 16,000 to a pound. The people in these countries are not dying. Instead of using the Foreign reserve to defend the Naira, we should be using that to develop our countries infrastructures- electricity, rail infrastructures, establish good security, good hospital and do everything that we make life easy for a common man. It is then foreigners can come and invest in the country. Defending the naira is only serving some sectional interest like those who pay school fees abroad. How long are we going to be defending the Naira

haywire07:


Defend the naira in the interim . So what happens in few weeks time when they need to release such huge fund to defend the naira again and again . Then I'll ask how much will be left in the reserve in the next 2years .

The problem is we are cutting the tree from the top

Brother let's forget these financial analysis since the inspection of this present administration and understand that whatever that is happening to the economy is artificial calculated by some group of saboteurs and unpatriotic imbeciles. Am not trying to undermine your points. Allow CBN and the latest economic team to tackle the situation hopefully light might shine at the end.

toyetade:


Why do we worry too much about Dollar exchange rate. Japanese Yen is 140 to a £, Iranian 40,000 to a pound, Indonesia 16,000 to a pound. The people in these countries are not dying. Instead of using the Foreign reserve to defend the Naira, we should be using that to develop our countries infrastructures- electricity, rail infrastructures, establish good security, good hospital and do everything that we make life easy for a common man. It is then foreigners can come and invest in the country. Defending the naira is only serving some sectional interest like those who pay school fees abroad. How long are we going to be defending the Naira

The Gross per income of those countries you mentioned is high compare to Nigeria. The Gross per income of nigeria is very low and the current inflation rate is nothing to write home about. By the time Naira hit depreciation ceilings, I wonder how people will survive.

One of the way forward is pump money to critical sectors in the country(which you mentioned in your comment) that will boost our foreign earnings more but we are still depending on oil alone.

is this really working, smh

Shame on all pessimist and wicked people.

Tell me how you float the naira in an economy that exports only oil an expect the naira to be stable, believe me if the government does that the dollar can be N2000 due to the greed , this hoarders and their cronies.

More grease to the government elbow, as long as oil sells for above $50 and there is peace in ND this policy can be sustained, the only reason so of this people are saying it won't work is because they are losing their hoarded dollars.

Osinbajo with the support of PMB have the backing of all well meaning Nigerians to continue with t policy of injecting FX to the economy weekly.

If you are in the US or have relatives in the US trying to send money to naija, I will exchange the funds at 400/$, simply deposit into my US bank account and receive instant funding into your Nigerian account. Don't bother with western Union and co, they exchange at 375/$ with fees and the exchange rate drops to around 345/$.

See my contact below..

stagger:
Russia spent $75billion trying to defend the Ruble in 2015 and the currency still ended that year close to 13% weaker. I don't know where our central bankers get their wisdom from.

Introduce a free float and let us know the true value of the Naira. From that point, we will know it cannot get any worse than it will get.

Exactly!

This is just another of the numerous silly measures being doled out by the incompetents running this country. Every USD that is pushed into the CBN invariably ends up on the black market where it is sold for its true value. The Central Bank cannot surely continue this indefinitely.

The Central Bank should implement a free float and immediately hike local real interest rates. This is the only solution, every other measure is simply postponing the eventual pain to come.

wristbangle:


Nice analysis bro. Like I said this policy will not be sustainable for long. However floating the naira may lead to serious devaluation as it may trade for N1000 against a dollars. We need a new strategy that will keep things in balance.

You can float the naira.

Think about it this way. There are only three possible means of having more dollars in the economy

a) Increase exports

b) Increase foreign portfolio inflows

c) Cut back on wasteful spending

Option A -

Currently we only truly export commodities, this is not going to change within the next 12 years. Nigeria is not going to turn into an industrial manufacturing giant within the next decade. The workforce is poorly trained, infrastructure are poorly developed, and several other things that a necessary are not in place.

Option B--

This is the only viable option for now. However, foreign investors have stopped investing in Nigeria because of liquidity issues. They simply can't withdraw their money when they need it. This is precisely why some airlines have also withdrawn from the country. The best way to fix this is to allow a freely floated currency, but to put incentives in place that will keep foregin investors here.
Some of those incentives include

1) Increase local real interest rates - Considering that rates across the developed markets are abysmally low, this is an immediate option
2) Improving law enforcement
3) Make the country an easier place to do business (e.g by removing barriers such as visa)
4) Bring regulatory standards closer to international standards. Nigeria companies should be required to publish financial statements that are strictly in line with international norms with heavy penalties for those who refuse to do so
5) Spend more on infrastructure.

stagger:
Russia spent $75billion trying to defend the Ruble in 2015 and the currency still ended that year close to 13% weaker. I don't know where our central bankers get their wisdom from.

Introduce a free float and let us know the true value of the Naira. From that point, we will know it cannot get any worse than it will get.

By allowing sales at N375 to the dollar they have in effect devalued the Naira.

martineverest:
its fire for fire.

This is d way to go.....pump in more money in dollars continuously.the price will fall further,despite some resilience xperienced on friday.

The first target was achieved by the first influx...by the time the second and third influx of dollars is achieved naira will stabilise at below 400

And when CBN run out of $ what happens?

Very Hilarious Reading comments. Those making money in dollars are calling it bad policy because it shortens their ration. People can be so self centered.

The senseless apc government and their fire brigade approach.

They should rather design a holistic economic approach to pull the country out of the recession they dragged the country into.

blueseacats:
And when CBN run out of $ what happens?

my broda,they will neva run out of cash...oil sale is booming right now....thats y our reserve increased by 5billion dollars in the last 6 weeks

abhosts:
Very Hilarious Reading comments. Those making money in dollars are calling it bad policy because it shortens their ration. People can be so self centered.

No, it's not being self centred. You are thinking of this from an extremely narrow point of view. The central bank can push more dollars into the economy if it wants, but this is not a sustainable long term strategy. It will improve the value of the naira - but only for the short term (max 3-4 months) then we will be back to square one again. Even worse, we will be back to a point where the Central bank now has fewer dollars, and demand for dollars is still rising.

It doesn't make any sense to pursue policies that are only short term in nature.

From responses I see, most of us are economically unsound. How long can they sustain the pumping. They are depleting foreign reserves. The other week was $300m. This week is $350m. These amounts can get our economy somewhere if truly and wisely invested. Then genuine appreciation of naira will be seen. This short interim abracadabra will lead the economy into long term doom.

I want price of foodstuffs to crash oh

We need to make our local contents more attractive, readily available and be able to compete favourably with imported goods. I can't fathom why Ajaokuta is still in a moribund state while we keep on importing iron rods and sheets in exorbitant rate. If you are in the construction industry, you will just be discouraged with the price fluctuations of materials every week!
The infrastructure deficit is massive.

I pray nothing happens in the Niger Delta, if not the FX policy of the CBN will not be sustainable.

cbn should stop pushing fx to friends in BDC starve them of scarce fx. give to people who really need them. we just gat to earn our fx.