₦airaland Forum

Kingspin:
We are always quick to rejoice over high reserves while the country sweets on hunger, bad roads, power and deads all over. So for me, the reserve is as good as nothing. Otherwise, it could have be low reserves but Nigerians feed well. READ MY COMMENT AGAIN.

AZeD1:
Stop misinforming people.
Foreign reserves is basically the money government has to pay for imports(liabilities). Has nothing to do with stability of a currency.

guterMann:
Another cheap propaganda from APC.

External reserve does not mean anything.

(1) The monies in the foreign reserve include the ones from debts(BONDS AND TREASURY BILLS) that are foreign currency denominated.

(2) The foreign currency remittances from Nigerians abroad.

(3)The difference between the oil benchmark and the oil price.

If the country is that 'rich' why not fund the budget from the Foreign Reserve?

Foreign reserve means nothing,A BETTER INDICATOR IS THE DEBT TO INCOME RATIO,I DARE APC TO RELEASE THE DEBT TO INCOME RATIO OF NIGERIA.

THE LAND OF THE RISING SUN MUST SET FORTH AT DAWN

TheCabal:
We use the foreign reserves to defend the naira. That is Nigeria's current plan for a stable currency.

So, a high foreign reserve means; a business can invest his money and not fear that the currency will plummet. This encourages FDI.

A high foreign reserve also means a country can meet its obligations, loans, tbills e.t.c

This is a simple paper regarding this issue:
^{The recent growth of international reserves in developing economies: A monetary perspective
https://www.sciencedirect.com/science/article/pii/S0261560615001497}

Pataricatering:
when they say read your book you won’t read ! Na wa o !

ashjay001:
So, when ur foreign reserve is very low n foreign entities fear u cannot meet ur forex obligations, what happens to ur currency? It remains stable ba? All these coconutheads sef

AZeD1:
India, Brazil, Taiwan and Mexico all have more foreign reserves than the UK.
Given a choice to buy just one currency, which would you pick?
Pounds, Rupees, Peso, Taiwan Dollar, Real.

ashjay001:
If u put it like this, then I'll ask u this; which amongst those country u mentioned, has a higher percentage of buying back their currency, even when they're broke, once u're ready to sell/offload?

CodeTemplar:
I hope Osun can tow this path.

vani86:
It means Naira to other foreign exchange remain stable and not fluctuate anyhow, it leads to stability of a countries currency when compared to others.

so yes, it affects the common nigerian indirectly

deomelo:
[s][/s]



Save your worthless ipob advise for your borehole and keke ambulance village...

AZeD1:
Answer my question and I'll answer yours.

wisdomkid:
Illiterates that don't know the full meaning of Foreign Exchange and reserve.
WHY are some group of persons so ignorant, you become afraid for the state of the Nation.

ashjay001:
I'll go with ur ans, believing u're an expert economist

ashjay001:
If u put it like this, then I'll ask u this; which amongst those country u mentioned, has a higher percentage of buying back their currency, even when they're broke, once u're ready to sell/offload?

AZeD1:
You and I both know you'll buy the pounds.
Its more stable and you can bet that 5 years from now, it would still be stable.

Don't confuse exchange rate with stability.

The $/£ exchange rate is one of the most volatile in the world but in terms of stability, they are up there.

CodeTemplar:
Can you compare Agric Ministry under Adesina to what it is under Ogbeh today. If we break this admin down ministry by ministry and compare to 4 - 5 years ago, it becomes easier to see the faults of the current admin.
Ask yourself what our Agric output would have looked like if the Buhari govt didn't default on fertilizer payment and doubled investment on other aspects of agric?
The APC knew what the system was like before their campaign. We can't use handover conditions to justify a 3 years of weak growth.

ashjay001:
So, with billions of dollars in reserve n being lead by a man of proven integrity, our naira value still won't stabilize, because of low oil prices se?

johnjay4u2u:
And you had to edit the name and date.
Fear God na.
How much are they paying you self?
Vanity

CodeTemplar:
You already highlighted the trashy part of your post for me.

abduljabbar4:
What we went through in 2015, 2016, and half of 2017 was nothing but the result of the foolish buffon. Even madam puff puff told nigerians to prepare for a hard time and lets not forget how gej had to borrow inorder to pay salaries a few weeks before he handed over to Buhari. Now that the mess has been cleaned up, its time to get to work. Sai Baba.

If you like go and get yoyr pvc. my one vote will scatter your 1 useless vote

GavelSlam:
Must I spoonfeed you?

Can't you just do some little research rather than make false accusations?

ChangetheChange:
The International Monetary Fund has warned the Nigerian federal government about its rising debt profile, just as President Buhari seeks approval from NASS to borrow $5.5 billion to fund the budget



- However, Catherine Pattillo, an assistant director at the IMF admitted that Nigeria has undertaken lots of positive reforms; but stated that the government must do more especially in terms of mobilizing non-oil revenue

The federal government has been warned about its rising debt profile, especially foreign loans, by the International Monetary Fund (IMF), The Nation reports.

The financial institution issued the warning on Wednesday, October 11.

This comes following President Muhammadu Buhari’s recent request to the National Assembly for approval to borrow $5.5 billion to fund the 2017 budget.



NAIJ.com gathers that Tobias Adrian, IMF director, Monetary and Capital Markets Department, lamented over the fact that the external borrowing of low income countries including Nigeria, keeps rising.


According to data from the Debt Management Office, Nigeria’s public debt as at June 2017 stood at $64.19 billion (N19.63 trillion).

However, Catherine Pattillo, IMF assistant director, Fiscal Affairs Department, admitted that Nigeria has undertaken lots of positive reforms such as improving infrastructure especially in the power sector.

Despite this though, she urged the federal government to do more especially in mobilizing more non-oil revenues.

She stated: “The concern in a number of oil exporters is that unless there is action now, debt which has been rising is a concern because of the interest payments.

“So, if you have continuing rise in debt, the interest payments would consume a large part of any revenue that you collect and you won’t be able to use that revenue for the objectives of the economic growth and recovery programme like increasing growth and employment.

“So for insuring that you have the ability to use those revenues for enhancing expenditure, there is a need to make sure that interest to revenue is kept at reasonable level.”



Meanwhile, NAIJ.com previously reported that a recent report concluded that the total foreign debt profile of the federal and the 36 states governments and the Federal Capital Territory (FCT), showed a continuous rise since the coming of the Muhammadu Buhari administration.

.


https://www.naij.com/1129958-foreign-loans-imf-warns-fg-rising-debt-profile.html

bros856:
Bros you are on point. Some Nigerians prefer political parties to real development. They don't know that if Buhari remains the President of Nigeria our foreign reserve will keep rising, very soon price of everything imported like cars will start crashing because Naira value start rising.

ICEMAN:
What that means is that we have $47 Billion savings which we'll hold in reserve to continue our artificial propping of the Naira. That's absolute rubbish.

Yyeske:
So what should be done with the money, fritter everything away just like Jonathan did?

efficiencie:
Well the reserves are not good for nothing...the rise in the price level that crippled economic activities in Nigeria for almost two years was occasioned by the scarcity of foreign reserves. Nigeria is still import dependent and if those reserves deplete below the threshold import cover prices will rise again. I am sure you can still remember how you go to the market to buy biscuit at a much higher price only to be told that "dollar don increase"! So you have to thank God that our reserves are back and growing!

Kingspin:
Then someone must fix the Nigerian economy not FX rate. I thank God is only your happiness not Nigerians.

Kingspin:
Then someone everyone must fix the Nigerian economy not FX rate. I thank God is only your happiness not Nigerians.

4Play:
If you have sound macro-economic fundamentals (low inflation, high GDP growth, export growth and high FDI inflows), then forex reserves are a sign of strength. However, in Nigeria's case, the increasing forex reserves are largely to do with the recovery in oil prices and, more importantly, the depreciation of the Naira from circa N155 to $1 to N360 to $1. The latter acted as a curb on imports by reducing the purchasing power of the average Nigerian, whilst the recovery in oil prices allowed the CBN to replenish the reserves. This is why the comparison between now and the GEJ era is ignorant - you are comparing levels of forex reserves at vastly different exchange rates.

The example I have often cited before is the Abacha era when forex reserves increased from $500m to $7bn at one point (an increase of 1300%). This wasn't because of sound economic policies. This was largely due to the collapse in the Naira as we went from N22 to $1 to N85 to $1. This curbed imports and helped replenish the reserves. Put simply, you can save money by starving yourself (arguably starvation to death saves money) but that is not living. Policies which cause the collapse of the Naira and significantly reduce living standards do not become vindicated because of an uninformed fixation with forex reserves.

It's debates like these that illustrate that the Nigeria's problem isn't solely about the quality of political leadership but is also about a hopelessly uninformed electorate. To celebrate forex reserves against a backdrop of collapse in both living standards and the purchasing power of the average Nigerian is a celebration of abject ignorance.

abduljabbar4:
What we went through in 2015, 2016, and half of 2017 was nothing but the result of the foolish buffon. Even madam puff puff told nigerians to prepare for a hard time and lets not forget how gej had to borrow inorder to pay salaries a few weeks before he handed over to Buhari. Now that the mess has been cleaned up, its time to get to work. Sai Baba.

If you like go and get yoyr pvc. my one vote will scatter your 1 useless vote

CodeTemplar:
Oga it has everything to do with stability of currency. The govt takes forex from the reserve and use it to meet import need on a short term basis. The volume of forex in market helps drive down forex price just like any other commodity. The main thing here is that the govt varies the availability of forex (its volume) in market to try and maintain a stable exchange. It is a short term strategy.

4Play:
If you have sound macro-economic fundamentals (low inflation, high GDP growth, export growth and high FDI inflows), then forex reserves are a sign of strength. However, in Nigeria's case, the increasing forex reserves are largely to do with the recovery in oil prices and, more importantly, the depreciation of the Naira from circa N155 to $1 to N360 to $1. The latter acted as a curb on imports by reducing the purchasing power of the average Nigerian, whilst the recovery in oil prices allowed the CBN to replenish the reserves. This is why the comparison between now and the GEJ era is ignorant - you are comparing levels of forex reserves at vastly different exchange rates.

The example I have often cited before is the Abacha era when forex reserves increased from $500m to $7bn at one point (an increase of 1300%). This wasn't because of sound economic policies. This was largely due to the collapse in the Naira as we went from N22 to $1 to N85 to $1. This curbed imports and helped replenish the reserves. Put simply, you can save money by starving yourself (arguably starvation to death saves money) but that is not living. Policies which cause the collapse of the Naira and significantly reduce living standards do not become vindicated because of an uninformed fixation with forex reserves.

It's debates like these that illustrate that the Nigeria's problem isn't solely about the quality of political leadership but is also about a hopelessly uninformed electorate. To celebrate forex reserves against a backdrop of collapse in both living standards and the purchasing power of the average Nigerian is a celebration of abject ignorance.