₦airaland Forum

fid4fid:
Bro, e be like say you sabi this money matter well.

Abeg make I ask, if market open next week, you think say demand for USD by importers go fit make the rate pass 460 so?

I no be speculator o! I just wanna know w go make sense to hold my small change wey I don convert to USD or to reconvert to Naira. E go pain me well say I buy at 460 then CBN intervene the money come go down to 415.

Abeg school me. The Coro period no be time loose kobo.

the guy is an economist, but come o are you praying for your naira to loose value? Ahh your prayers no go work for this one naira will bounce back let say to 370.

kikero:
Instead of government to control the price of petrol, which it does by setting the price and paying NNPC the difference between the price at which it imports (in 2018 it was N180 per liter) and the price it sells to marketers (N145 in 2018)....government leaves it to the marketers (private people involved in buying and selling fuel ) to set the price.

That means that anyone can now import fuel....which would in theory lead to PMS costing N300 and above. Eventually, since government is no longer controlling the price of fuel, it would become more attractive for local and foreign investors to build more refineries in Nigeria , which means reduced importation of fuel and eventually market driven reduction of prices.

NNPC can now make a profit, and repair and expand the existing refineries, and also build new ones.

thanks sir for your enlightenment

kikero:
Simple.

1.We cut subsides on petrol completely, and allow marketers set the price.

2.This brings in more investment in refineries and in gas production facilities

3.This improves power supply

4.Which means more factories and industries would be set up

5.Which means more jobs, and more income for the government.

How about a cut in the allowance and pay of the political class?

omonnakoda:
This is a common mistake people make.

Foreign reserves are not government funds or savings.
Foreign reserves are CBN funds.
When dollar Foreign reserves go down it means the CBN is selling more dollars than it is buying.
If Foreign reserves have dipped by $ 5 billion then the CBN has acquired the NAIRA EQUIVALENT.

E.g. When Nigeria sells oil for $1 billion and exchanges it for Naira with the CBN the $1 billion goes to the CBN balance sheet and the CBN issues naira in return which the government spends . Clearly the $1 billion no longer belongs to the government but the CBN. The Naira is essentially a CBN DEBT backed up by foreign reserves and any other assets that the CBN owns.

All of us carrying naira in our pockets are essentially creditors of the CBN and own a proportionate share of the Foreign reserves.

Well said

Yenefer:
Now if I said anything like the CBN governor is a criminal, corrupt they will tag me tribalistic. But even I said so. u and I know I-pigs that the CBN governor is a criminal and corrupt

The incompetent mufu that calls him self president of the Fulani herdsmen republic, gives him order to deplete the foreign reserves in what ever name possible. So your president is also a thieve.

kikero:
The government may be reckless, but the reason why they are dipping into the reserve is simple.

Oil prices have been on a downward trend. Oil was at $63 in December 2019, now it is at $24

Either we take money from the reserves, or we starve....or government owes everyone, and I mean everyone money...

Effect of living in a non-diversifed economy...which is what you should be criticizing the government for.

Quick question. What was the budget benchmark in 2019? The excess on the benchmark is supposed to be saved in the ECA. How come by 2019 end the ECA was $70m?

kikero:
The government may be reckless, but the reason why they are dipping into the reserve is simple.

Oil prices have been on a downward trend. Oil was at $63 in December 2019, now it is at $24

Either we take money from the reserves, or we starve....or government owes everyone, and I mean everyone money...

Effect of living in a non-diversifed economy...which is what you should be criticizing the government for.

Government has NOT dipped into foreign reserves. Clearly you misunderstand what foreign reserves are

Agboriotejoye:
Quick question. What was the budget benchmark in 2019? The excess on the benchmark is supposed to be saved in the ECA. How come by 2019 end the ECA was $70m?

The benchmark isn't important. What is important really is our breakeven price. And oil has never been high enough to reach out breakeven price.($139 by 2017)

So, whatever the benchmark is, it is irrelevant, really. We aren't earning enough in the first place.

Which means that this government should stop sharing money and focus on getting us industrialized.

omonnakoda:
Government has NOT dipped into foreign reserves. Clearly you misunderstand what foreign reserves are

Well, I may have been wrong, however

There are seven ways central banks use foreign exchange reserves.

First, countries use their foreign exchange reserves to keep the value of their currencies at a fixed rate. A good example is China, which pegs the value of its currency, the yuan, to the dollar. When China stockpiles dollars, it raises the dollar value compared to that of the yuan. That makes Chinese exports cheaper than American-made goods, increasing sales.3

Second, those with a floating exchange rate system use reserves to keep the value of their currency lower than the dollar. They do this for the same reasons as those with fixed-rate systems. Even though Japan's currency, the yen, is a floating system, the Central Bank of Japan buys U.S. Treasurys to keep its value lower than the dollar. Like China, this keeps Japan's exports relatively cheaper, boosting trade and economic growth. Such currency trading takes place in the foreign exchange market.4

A third and critical function is to maintain liquidity in case of an economic crisis. For example, a flood or volcano might temporarily suspend local exporters' ability to produce goods. That cuts off their supply of foreign currency to pay for imports. In that case, the central bank can exchange its foreign currency for their local currency, allowing them to pay for and receive the imports.

Similarly, foreign investors will get spooked if a country has a war, military coup, or other blow to confidence. They withdraw their deposits from the country's banks, creating a severe shortage in foreign currency. This pushes down the value of the local currency since fewer people want it. That makes imports more expensive, creating inflation.

The central bank supplies foreign currency to keep markets steady. It also buys the local currency to support its value and prevent inflation. This reassures foreign investors, who return to the economy.

A fourth reason is to provide confidence. The central bank assures foreign investors that it's ready to take action to protect their investments. It will also prevent a sudden flight to safety and loss of capital for the country. In that way, a strong position in foreign currency reserves can prevent economic crises caused when an event triggers a flight to safety.

Fifth, reserves are always needed to make sure a country will meet its external obligations. These include international payment obligations, including sovereign and commercial debts. They also include financing of imports and the ability to absorb any unexpected capital movements.

Sixth, some countries use their reserves to fund sectors, such as infrastructure. China, for instance, has used part of its forex reserves for recapitalizing some of its state-owned banks.5

Seventh, most central banks want to boost returns without compromising safety. They know the best way to do that is to diversify their portfolios. They'll often hold gold and other safe, interest-bearing investments.

There are a lot of good reasons why the CBN dips into the foreign reserve.

Source: Foreign Exchange Reserves and How They Work


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kikero:
The benchmark isn't important. What is important really is our breakeven price. And oil has never been high enough to reach out breakeven price.($139 by 2017)

So, whatever the benchmark is, it is irrelevant, really. We aren't earning enough in the first place.

Which means that this government should stop sharing money and focus on getting us industrialized.

I don't know what you mean by the benchmark is not important. The benchmark is used to set the budget and is a pointer to govt spending vis a vis earning. So your so-called break even price is a pure fallacy. The budget benchmark for Nigeria has never exceeded $50. While the budget has always been a deficit, the sum borrowed for each year does not reflect a deficit of the magnitude of $89 which makes your assertion terribly flawed.

Another devaluation is looming

sassysure:
One of the strength of every country especially developing countries is foreign reserve.
Make they kukuma finish the whole thing na.
Buhari has bad luck written all over him since the1980s.

They said if some people enter in a house, their aura make it glow while when some enter the same house, it look haunted.
Buhari's aura has been haunting Nigeria. Very bad market. Those way dey go see those people wey dey see future, none of them told them.buhari is bad market?

From being a robot( the drama surrounding him even make me doubt if he is alive) to being a burden.

I never know Buhari is the president of the world.
Thank God your types are just 5% in Nigeria.

Your dumbness is unprecedented. You need to go back to school.

Yenefer:
Now if I said anything like the CBN governor is a criminal, corrupt they will tag me tribalistic. But even I said so. u and I know I-pigs that the CBN governor is a criminal and corrupt

Yankee101:
If you have friends abroad ask them to help you with their remittances. Guys are building houses now before inflation sets in. We still send money to naija at 375.

If una trust each other you can get USD at 400, they'll pay for your goods from here and you credit their naija accounts with naira

Bro, The money don fall to 450. I no know whether the money go fall more make I change my small change back to Naira. I no wan loose money

kikero:
The benchmark isn't important. What is important really is our breakeven price. And oil has never been high enough to reach out breakeven price.($139 by 2017)

So, whatever the benchmark is, it is irrelevant, really. We aren't earning enough in the first place.

Which means that this government should stop sharing money and focus on getting us industrialized.

Breakeven price?

You speak so assertively and authoritatively all the while talking total rubbish!

With that kind of attitude you will never learn anything

omonnakoda:
Breakeven price?

To explain

Nigeria Has The Highest Break-Even Oil Price in the World

According to the Fitch Rating Agency, Nigeria’s break-even oil price is $133, the highest in the world. This is because of an inflated government budget that includes, among other things, Senator salaries in the range of $37,000 a month.

The country’s cost of producing oil is $15-17 per barrel, but with crude prices falling near or below zero, this won’t be enough to avert a sovereign debt crisis.

Nigeria’s benchmark Bonnie Light crude hasn’t hit zero yet. But with millions of barrels sitting unsold, Nigeria may start paying customers to take delivery due to its lack of onshore storage facilities. According to some sources, Nigeria is losing an average of $35 million a day in accruable revenue. And its currency, the Naira, maybe on the verge of a Zimbabwe-like devaluation because oil is the only source of the foreign exchange needed to prop it up.

SAUCE

You speak so assertively and authoritatively all the while talking total rubbish!

With that kind of attitude you will never learn anything

Good afternoon to you too. Take life easy. This is just a site. Abusing me does not make me get your points at all.

kikero:
To explain

Nigeria Has The Highest Break-Even Oil Price in the World

According to the Fitch Rating Agency, Nigeria’s break-even oil price is $133, the highest in the world. This is because of an inflated government budget that includes, among other things, Senator salaries in the range of $37,000 a month.

The country’s cost of producing oil is $15-17 per barrel, but with crude prices falling near or below zero, this won’t be enough to avert a sovereign debt crisis.

Nigeria’s benchmark Bonnie Light crude hasn’t hit zero yet. But with millions of barrels sitting unsold, Nigeria may start paying customers to take delivery due to its lack of onshore storage facilities. According to some sources, Nigeria is losing an average of $35 million a day in accruable revenue. And its currency, the Naira, maybe on the verge of a Zimbabwe-like devaluation because oil is the only source of the foreign exchange needed to prop it up.

SAUCE



Good afternoon to you too. Take life easy. This is just a site. Abusing me does not make me get your points at all.

Quoting foolishness is just foolishness

Break Even has only one meaning.

It has nothing to do with senators salaries.

That is a perverse extension of the meaning of break even and hullabaloo accounting.

What has senators salaries got to do with oil break even.

What the shareholders of a business choose to spend their profit on CANNOT be counted as an EXPENSE OF the business.

The break even price for oil production has ABSOLUTELY NOTHING to do with the public accounts or budget.

It this case the break even point is simply the Cost of production. i.e about $16

Nigeria oil production is carried out by private businesses or joint venture businesses which then PAY TAX and or dividends to the government.

Break even point for oil production therefore is a calculation for those business entities


This is exactly what happens when you copy and paste stuff you don't understand

fid4fid:
Bro, The money don fall to 450. I no know whether the money go fall more make I change my small change back to Naira. I no wan loose money

Lol

If you want to go into speculation, you have to hold your position and go long with it

But whatever makes you comfortable

Yankee101:
Lol

If you want to go into speculation, you have to hold your position and go long with it

But whatever makes you comfortable

Guy, no laugh me! Na safe haven I dey find. If e hold this naira e reach 480..500. Omo... na to go village go farm.

I dey try hold my small change wey remain for stable currency until govt decide wetin them want do with the country as oil price don turn pure water.
If na you ... As things they go so with exchange rate jumping up and down, no be dollar you go hold till things steady ?

They did tell us but we didnt listen

sassysure:
One of the strength of every country especially developing countries is foreign reserve.
Make they kukuma finish the whole thing na.
Buhari has bad luck written all over him since the1980s.

They said if some people enter in a house, their aura make it glow while when some enter the same house, it look haunted.
Buhari's aura has been haunting Nigeria. Very bad market. Those way dey go see those people wey dey see future, none of them told them.buhari is bad market?

From being a robot( the drama surrounding him even make me doubt if he is alive) to being a burden.