₦airaland Forum

TinaAnita:
Too early to celebrate, let watch and see if it won't hit 600

Bad bele is allowed, though its bad for your health.

SalamRushdie:
Even when it was 160 they didnt panick so please stop all this nonsense propaganda

SO those that buy and hoard dollar at the rate of 450/$ will they be titillating now after loosing about 70 naira already and still going down..


They might loose more than 200 naira if care is not taken..

Its gradually coming down. Thank God Baba's return did not affect the Dollar.

Sanchez01:
It won't be crashing anytime soon. Most of the traders around goofed by stocking their shops with goods bought when the exchange rate was around 500, owing to fear that the Naira would crash more than that.

Unfortunately, they are stuck with the old, expensive goods and they won't be selling lesser than the amount they bought it for.

Prices would only crash when old stocks are done away with and traders are able to buy new goods with the present exchange rate.

Your analysis is excellent but I disagree on one aspect.

See, I wont go and import hair cream because it would cost me 100# less. BUT car dealers who were unfortunate to actually import when forex rates were high would lose. They would keep insisting on selling at e.g. 6 million. When your colleagues are bringing in new stuff at 4.5 or when the buyer can import at a lower rate, no one would tell u before u reduce your prices.

By the way, most car dealers were just selling old stock. few of them actually imported.

The scenario you painted would definitely work for supermarket commodities. ..

This is the time that Nigerians can not wait for always wailing on any little challenge.

JustinSlayer69:
Your analysis is excellent but I disagree on one aspect.

See, I wont go and import hair cream because it would cost me 100# less. BUT car dealers who were unfortunate to actually import when forex rates were high would lose. They would keep insisting on selling at e.g. 6 million. When your colleagues are bringing in new stuff at 4.5 or when the buyer can import at a lower rate, no one would tell u before u reduce your prices.

By the way, most car dealers were just selling old stock. few of them actually imported.

The scenario you painted would definitely work for supermarket commodities. ..

Car dealers are the only ones who know what is at stake if they don't bulge. Cars depreciate the moment they are parked on a spot faster than when it is being used.

Most car dealers even go as far as accepting down payments with an agreement that you would pay back on a particular date, so long the vehicle is moved out of their premises.

For the car dealers selling old stock, they won't lose much since they pretended the stock is recent, thereby giving them grounds to inflate their prices just as other traders. It is not all that difficult for them to revert.

doskie:
but do you speculate that the cost of things generally will drop with this dollar crash? Because my clients are using this as an excuse to price ridiculously. So far, price of 300watts solar panels for instance has increased ostentatiously.

yes the cost of things will drop but not immediately not in two months time, by third month, price of things will drop as long as the dollar crash becomes stable below 400 naira. the drop in price of things wont be like two years when the rate was at 200 naira to a dollar

the reason your client are pricing ridiculously is because of attitude of some traders who are so quick to increase the price of their goods citing dollars has gone up.

SuperS1Panther:
Arm chair Economists over to you -- we are listening to your broken record of the policy not being sustainable, and how this is an artificial appreciation of the Naira, as if the driving up of the exchange rate was not artificial ab initio.

Hoarders, speculators and children of hate -- how market and what do you have to say to this good news?

They would say it's all propaganda, like one has already said.

They are only interested in hearing negative news about the government of the day.

This is a good development. One thing that has not changed is international airfares for direct flights to US from Lagos. Can experts in the house throw light on this?

Sanchez01:
It won't be crashing anytime soon. Most of the traders around goofed by stocking their shops with goods bought when the exchange rate was around 500, owing to fear that the Naira would crash more than that.

Unfortunately, they are stuck with the old, expensive goods and they won't be selling lesser than the amount they bought it for.

Prices would only crash when old stocks are done away with and traders are able to buy new goods with the present exchange rate.

You need to understand something, market forces are very stong and powerful. They would have no choice than to count their losses now or count higher losses in future.look at it this way, traders who go to buy the exact same goods bought at 500 for 385, it definitely means they would sell below a trader who buys at 500. The latter would lose customers and God help him, the goods are perishable.. in the end who makes the total loss?

CoolAmbience:
They would say it's all propaganda, like one has already said.

They are only interested in hearing negative news about the government of the day.

I really don't care about the political angle in Nigeria. However, this "appreciation" has very little to do with economic forces. It's purely good ol arbitration at play.

There's something in financial arbitration called "pump and dump." Right now, from the info presented, hoarders are dumping fast to get the most they can. This triggers the race to the bottom.

However, dumps typically don't last too long, because the source is very limited.
Sometimes, values stay low after a dump, but typically they go back up.

The way I see it, it'll go back up when people in Nigeria start coming around for summer vacation, sometime around May.

Until the "unofficial official rate" changes, there's no true yardstick for economic impacts on the Naira.

ramalot:
I really don't care about the political angle in Nigeria. However, this "appreciation" has very little to do with economic forces. It's purely good ol arbitration at play.

There's something in financial arbitration called "pump and dump." Right now, from the info presented, hoarders are dumping fast to get the most they can. This triggers the race to the bottom.

However, dumps typically don't last too long, because the source is very limited.
Sometimes, the price stays low after a dump, but typically it goes back up.

The way I see it, it'll go back up when people in Nigeria start coming around for summer vacation, sometime around May.

Until the "unofficial official rate" changes, there's no true yardstick for economic impacts on the Naira.

But when the Nigerians come home for summer holiday, normally that should increase the supply of forex in the system.

Or what do you think

Sanchez01:
It won't be crashing anytime soon. Most of the traders around goofed by stocking their shops with goods bought when the exchange rate was around 500, owing to fear that the Naira would crash more than that.

Unfortunately, they are stuck with the old, expensive goods and they won't be selling lesser than the amount they bought it for.

Prices would only crash when old stocks are done away with and traders are able to buy new goods with the present exchange rate.

Competition will certainly crash the price of goods too.

Okuda:
You need to understand something, market forces are very stong and powerful. They would have no choice than to count their losses now or count higher losses in future.look at it this way, traders who go to buy the exact same goods bought at 500 for 385, it definitely means they would sell below a trader who buys at 500. The latter would lose customers and God help him, the goods are perishable.. in the end who makes the total loss?

exactly!

CallmeGlad:
I'm not jumping up until prices of commodities starts crashing real fast

Our people will never bring the prices down, they will keep on telling you that what they are selling is the old stock in the store.
......change really have to start with me and you

let it go to N200 to $1 --- that is what I want.

I think this is even the best time to buy dollars and save for long term. The dollar-crashing method of pumping dollars from reserve remain cosmetic and unsustainable until nigeria becomes a key export country which will only happen at best in 50 years. No shaking!

Wise ones like us won't die because the economy of the contraption is collapsing. We will seek ways to reap from it whether bad or good. No be we create nigeria! Na lugard do am!

Ugosample:
But when the Nigerians come home for summer holiday, normally that should increase the supply of forex in the system.

Or what do you think

That is also true. However, I don't believe the incoming currency from vacationers comes close to the local demand.

Last time I visited Nigeria, I don't recall exchanging more than $1,000 in cash.
Matter of fact, I returned with most of the physical cash I took.

Primarily because it was more convenient to get cash from an ATM. Instant conversion to Naira.
This way, I didn't have to deal with some shady gentlemen each time I needed Naira.

I believe many others also operate this way.

Sanchez01:
It won't be crashing anytime soon. Most of the traders around goofed by stocking their shops with goods bought when the exchange rate was around 500, owing to fear that the Naira would crash more than that.

Unfortunately, they are stuck with the old, expensive goods and they won't be selling lesser than the amount they bought it for.

Prices would only crash when old stocks are done away with and traders are able to buy new goods with the present exchange rate.

I disagree with you on your second paragragh. I'm also a businessman and what is going to happen is that traders, especially Igbos are very competitive. They will either source for money and import more goods with the new exchange rate and cut prices or risk loosing their customers. People are going to China & Dubai everyday, so smart businessmen will sell cheap to gain new customers while others with old stock will be forced to follow suit especially now that demand is very low.

ramalot:
That is also true. However, I don't believe the incoming currency from vacationers comes close to the local demand.

Last time I visited Nigeria, I don't recall exchanging more than $1,000 in cash.
Matter of fact, I returned with most of the physical cash I took.

Primarily because it was more convenient to get cash from an ATM. Instant conversion to Naira.
This way, I didn't have to deal with some shady gentlemen each time I needed Naira.

I believe many others also operate this way.

Whichever way you did it, there was an injection of forex into the country, whether it entered through the window, door, leaking roof, however, the important thing is that it came in.

Ugosample:
Whichever way you did it, there was an injection of forex into the country, whether it entered through the window, door, leaking roof, however, the important thing is that it came in.

I think you missed the point.

Point being, people aren't really going to Nigeria with wads of dollars anymore (as they no longer have to).
They can get Naira directly from their US account at a Nigerian ATM, as needed.

10 years ago for instance, Mastercard or Visa cards weren't functional in Nigerian ATMs.
Therefore, the most convenient option was hard cash swaps. This is no longer necessary.

So yes, there might be an injection of hard forex, but at negligible amounts.

SalamRushdie:
Even when it was 160 they didnt panick so please stop all this nonsense propaganda

Try harder because you got this one wrong. How much did they buy the ones they're hoarding now? When it was N160, how much did they buy it? You're not smart.

maasoap:
Try harder because you got this one wrong. How much did they buy the ones they're hoarding now? When it was N160, how much did they buy it? You're not smart.

And who told you anyone is hoarding anything , if you dont know Buhari has been known to use hoarding as an excuse for his failures since 1984 ..shei you can see you are the one thats not smart .

TinaAnita:
Too early to celebrate, let watch and see if it won't hit 600

This is no hating but I think some people are just too simple to believe anything in a jiffy. Like you said, it is too early to celebrate..only the wise knows that. Common people, we still have a long way to go, and this is the first 3 months of 2017...only the wise know this and no wonder investors aren't impressed because they have to be sure there is stability than this one step forward, three steps backward.

Also, I'm not sure but I think the cabals are manipulating the system in a way...sell dollar at a high rate...become a millionaire/billionaire overnight....reduce the exchange rate again by buying dollars at a lower rate and hike it again...all to square one.

javijabor1:
Bloggers go dey cry now.

lol! Well, it's still a win. I had been hoping to sell my small $100 dollars which i would get paid next month for 50k, but the way things are going i would be lucky to get 25k for it when i get it on April 21st. But i am happy things are getting better in the country.

Ugosample:
It's a good development


But why wait till now @CBN?

But thank God sha, they have woken up from their cluelessness

They waited till now so as to save up enough dollar...so that they can then flood the market with dollar consistently till it automatically starts to drop.

I hope CBN has not yet started printing their own dollar. APC. That pumping dollar got me confusing

ramalot:
I think you missed the point.

Point being, people aren't really going to Nigeria with wads of dollars anymore (as they no longer have to).
They can get Naira directly from their US account at a Nigerian ATM, as needed.

10 years ago for instance, Mastercard or Visa cards weren't functional in Nigerian ATMs.
Therefore, the most convenient option was hard cash swaps. This is no longer necessary.

So yes, there might be an injection of hard forex, but at negligible amounts.

We are still saying the same thing

Okay let me ask you, you think that even if you use your card to withdraw here in Nigeria, that the bank will not collect dollar equivalent from your own bank?

MasterCard will debit your bank, and credit the Nigerian banks ATM, that way, dollars still flow in

It's the same thing

TB Joshua right now, will be praying dollar should depreciate so that his false prophecy will come to past.
Enemies of Nigeria Association (EMA)

Ugosample:
We are still saying the same thing

Okay let me ask you, you think that even if you use your card to withdraw here in Nigeria, that the bank will not collect dollar equivalent from your own bank?

MasterCard will debit your bank, and credit the Nigerian banks ATM, that way, dollars still flow in

It's the same thing

Yes, you are absolutely correct.

However, remember this discussion is more about the direct impact of physical cash flow on the parallel market rates.
My stated scenario (as you rightly said) brings Forex through the Official Exchange -> BDC -> Street vendor.

Hoarders and vacationers cut out the middle man and sell directly to street vendors.
Higher direct supplies like this drives the price lower/faster than supplies from the official channel above.

Anyway, I believe at this point we've both made our valid points.