₦airaland Forum

You mean the woman who openly initiated the dollarization of economy by demanding to be paid in dollars under Obasanjo?

The one who supervised the depletion of ECA and initiated post-debt cancellation loans adventure, before Buhari switched to foreign reserve and loans on full throttle?

The one who clearly saw harder times ahead and warned of it in 2014?



These tribal legend don't cease to amaze me.

AreaFada2:
High inflation and high interest rate economy is a troubled economy.

FG still issues bonds at about 7% when inflation is running at almost 30%.

Yes, high rate of devaluation encourages spending but purchasing power is already low.
Now, we rely on import.

Some claim we have too much money in circulation: 78 Trillion Naira chasing limited dollar.

With $33 billion dollar foreign reserve, a rough true value of Naira is: 78 trillion/33 billion = 2363.

So Naira could easily still reach 2363 to a dollar.

If you still use Hamburger system to calculate true value, Naira is still weak.

People easily dismiss science, but economics follows scientific principles and fairly reliable.

If we were an exporting nation, with light, infrastructure, security and more stability, FDI would still flow in to benefit from a short and medium term bullish economy. Naira volatility won't matter too much as more people will get employment and income will rise too.

But 9ja has too many anomalies and poor policies.

When calculating the Naira to Dollar ratio, you didn't consider that not all naira in circulation are chasing the dollar or forex. Most are exchanging local goods. That brings the dollar back to around N1500 and below. The issue is still corruption. After increasing Naira in circulation and arming the governors with it, instead of dispersing it and buying local services or goods, they steal it and try to take it out through the forex market. That's what pushes forex demand and prices up mostly.
Under normal economic circumstances, increase in price leads to reduced demand of goods, and so forex demand should naturally weaken when prices go up, but in our case, as FG try to get more money across to the governors to reduce hardship, the money goes almost directly to the forex market.

Tinubu should bypass the govs and let their FAAC be just what they need for salary and then a flat amount of 2-3 billion for capital expenses. That's should give the FG space to do more impactful things for the masses.

Also to save crucial money.
New road should be suspended and only existing one be maintained and secured.
Health and education should get extra attention. Particularly, ASUU should be settled since Naira is less valuable and their agreement with ASUU was reflected in Naira and not dollar.

What I see here is a case of forex shortage that cant be easily remedied.
Most painful is the fact that what is eating our forex - foreign loan repayment - was wasted on meaningless projects that are not yielding even 10% of the debt repayment.

It is a case of Buhari plundering future resources via sensless borrowings and projects. Tinubu has serious work to do o.

If i say contract, you say time!

Five hundred Naira pepper that cannot pepper someone. Is that one proper pepper.

You beat me to the thread. Was going to create it.

rottennaija:
So when you wait for dollars to hit 10k for you to convert, what next? Shey you go market you buy, then peak milk that use to cost 400 naira go cost 1400. Wetin you gain?

face front.

grandstar:
What is textbook here? The CBN in the past has everally used this measure to mop up excess funds.

lol.

Better late than never. Should have done this 50 years ago but easy oil money blinded them until the last minute.

horpe132:
..
In a nutshell, govt should subsidise foodstuffs for now
..
Well it sounds good, but I doubt it'll be good in practice....
..
Nigerian love free things, if the govt starts that now, it'll be hard to end it... Just like the due subsidy

no.
Govt should buy and resell with minimal profit. That's not subsidy. They beat greedy middlemen.

From what I heard 2 years ago. Some politicians are using it to frustrate the ruling party. They use their wealth to target strategic grains like beans they know are grown in specific area by offering farmers bulk price before harvest. They harvest it into their barns and wait until the limited supply in market start sending prices up then they resell.
It is both political and business move. Two birds gone with a single sling.

If govt import and resell, no opposition middleman can frustrate a ruling party.

Judolisco:
no be fuel dem go use carry am go other states?

so it will be N25k in Enugu or borno then. Rubbish!

Why wait for so long before killing him?

Produced in Kogi some 100 miles away yet going for $10 per 50kg bag.

What. Something they produce in Kogi and Edo north.

You are solving nothing.

Just doing gazelle gagaraga.

Minsk24:
Excellent idea, but it should be a temporary measure, because without curbing insecurity, excessive importation will kill local farming....
The printing of cash for farmers is a good idea despite inflation, if it can have good oversight, that money will go straight into a value chain and the rewards will be benefited, without good oversight, the fate of tha anchor borrowers program will befall it .

it should be temporary of course.
As they import this year, reach out to producer that you are willing to buy triple their average output. That can inspire production. Start buying from them into the silos and as the food piles up. Export and make the dollar into govt coffer then watch Naira appreciate.

It is the same thing in principle. The naira is the one going weak and not necessarily the dollar waxing strong.

WantsandMore:
importing food never solves a problem. If it did. We wouldn't be in this situation

I am not talking of giving money to people to go and buy it. I am talking o govt buying it in bulk and allowing the people pay closer to the real value for it.

thesicilian:
What I fear most is that they might begin forcefully converting these dorm accounts to naira if the owners don't agree, or placing illegal charges on the accounts to siphone the money little by little.

Buhari once attempted borrowing from dead people. They hide the problems and try to act like they are in charge.

Lol. He should come clean and tell us the situation of things.

Most people are waiting for dollar to hit N5000 or N10000 before selling and may not yield to the bank's request.


Cancel petrol, electricity subsidies and import food at federal level. He is doing strong head. Farmers won't double their output overnight in an industry dominated by unlearned folks. Never. Import food now or regret it.

The effect of subsidy removal and naira floating was multiplicative. Naira affect petrol prices and subsidy removal to affected it. Finally petrol price affected so many things. Things affected living standard.

I suggest we stop the subsidy and import food instead. People can barely feed so who uses the petrol? Our neighbors(imaginary and real) of course.

UncleAyo:
Then, I challenge you to offer a solution, at least one, to the overwhelming challenges of Nigeria.

I gift you the benefit of doubt to prove your great intelligence and insight... I'm very sure you're not one of them that have nothing upstairs but are always fast to condemn ideas of others without nothing to offer as a solution.

I hereby unchallenge myself with the burden of having to educate you on your numerous misconceptions.

A305:
These policies didn't work as dollar rebounded this morning and is currently trading above 1600 this morning.

The mistake done was undoing Emiefele's policy of floating the naira against the dollar — Naira could have lost value either ways but not with this sharp increase, it wouldn't even have reached 1000 dollars.

The government should first reinstate pegging the dollar and all these other new policies will stick to curbing naira decline.

emefiele didg floated completely. Cardoso did the the main floating. In my opinion, 85% of it.

pocom16:
We will continue to suffer it...

Now subsidy is back and at higher figures than previous administration..

Bulaba should have kept dollar the way it was and just remove the subsidy he was dying... That way..
The exchange rate will still allow NNPC remit alot more ..the only thing that will be affected is transport cost..

But the bastard decided to touch the Forex rates which affects every commodity down to toothpick..

Very useless man

nothing satisfies hateful creatures.
Before the floating, the widespread opinion was that currencies excnanve rates be collapses or floated. It has been floated and now you are making a 180° degree turn.

grandstar:
The CBN should fight inflation by raising interest rates to 30%.

This I am certain will arrest the Naira's free fall.

lol. You such a textbook clown oga.

No be only interest, na intestinal matter. Lol

UncleAyo:
World's Top Performing Currency and Insight for Naira

* Government/CBN should stop the printing 500 NGN notes and 1,000 NGN notes (the use of #200 note should be sparingly) and officially discontinue the use of these currencies!

* Reintroduction of Nigeria coins, 50Kobo, 1 NGN and 2 NGN.

* Focus should be on Local Business and not call for foreign investment; as foreigner will eventually and continually repatriate their profits in USD. (learning from what is happening in China)



Welcome, lets get started by examining the top 10 performing currencies in the world to gain necessary insights before drawing our conclusions.

*.Kuwait Dinar KWD: ( 1 KWD = 4,920.49 NGN )
Bank notes: 1/4, 1/2, 1, 5, 10, 20 Dinars -------------- Highest denomination == 20 Dinars; Coins == Yes
Coins: 5, 10, 20, 50, 100, 200 Fils


*.Bahraini Dinar BHD: ( 1 BHD = 4,021.64 NGN )
Bank note: BD 1/2, BD 1, BD 5, BD 10, BD 20 --------------- Highest denomination == BD 20; Coins == Yes
Coins: 5, 10, 25, 50, 100 Fils, BD 1/2


*.Omani Rial OMR: ( 1 OMR = 3,937.77 NGN )
Bank note: 1/2, 1, 5, 10, 20, 50 Rials --------------- Highest denomination == 50 Rials; Coin == Yes
Coin: 50, 10, 20, 50, 100 baisa and rarely used 200 biasa


*.Jordanian Dinar JDD: ( 1 JDD = 507,65070 NGN )
Bank notes: 1, 5, 10, 20, 50, Dinars ------------------- Highest denomination == 50 Dinars; Coin == Yes
Coins: 1/2, 1, quirsh, 21/2, 5, 10 Piastras


*.British Pound GBP: ( 1 GBP = 2,135.49 NGN )
Bank notes: €5, €10, €20, €50 ----------------------- Highest denomination == €50; Coin == Yes
Coins: 1P, 2P, 5P, 10P, 50P, €1, €2


*.Caymanian dollar KYD: ( 1 KYD = 1,815.81 NGN )
Bank notes: 1, 5, 10, 25, 50, 100 Dollars ------------------- Highest denomination == 100 Dollars; Coin == Yes
Coin: 1, 5, 10, 25 Cents


*.Euro EUR: ( 1 EUR = 1,631.43 NGN )
Bank notes: €5, €10, €20, €50, €100, and €200 --------------- Highest denomination == €200; Coin == Yes


*.Swiss Franc CHF: ( 1 CHF = 1,719.44 NGN )
Bank note: 10, 20, 50, 100, 200, 1000 francs ------------------- Highest denomination == 200 francs; Coin == Yes
Coins: 5, 10 and 20 Rp/cts, 1/2, 1, 2 and 5 Fracs


*.United State dollar USD: ( 1 USD = 1600 NGN )
Bank note: $1, $2, $5, $10, $20, $50, $100 ----------------- Highest denomination == $100; Coin == Yes
Coins: 1C, 5C, 10C, $1/4, $1/2, $1.




Go back to the list once again and check what's the highest denominations of each currency (and population of users of each currency), You will discover that the top performing currencies do not have high face value like we have 500 NGN and 1,000 NGN in Nigeria.

Also, you will notice that the top performing currencies have coins form of currency with denomination of very low face value.


The highest of the denomination is 1000 Franc followed by 500 EUR. 1000 Franc is not in frequent use and the highest Franc denomination next to it is 200 Frank ( not like 500 NGN as we have here in nigeria ). Also the use of 500 EUR was discontinue in year 2018.

Get a hold on history of exchange rate in Nigerian, you will find out that every introduction of new high (face value) denomination currency note has adverse effect on exchange rate.


Why High Denominational Currency Note Is Bad:
1. Increase in prints of currency notes with high face value e.g 1000 NGN makes other lower currency of less important and less useful. This can gradually lead to upgrade of price of goods and services in market.

2. It makes stealing, looting and hoarding of cash easier as larger amount of money value can be packed into a very small space.


3. 500 NGN and 1000 NGN are no money for the common man, go to the market and examine what denomination are most in use.

4. It's in a way opposing the cashless policy by the federal government of Nigeria.


What The Wise Nations Did:
1. United State of Ameria used to have $500, $1000, $2000 currency notes until December 14, 1945, when the high denominational bills were last printed and officially discontinued on July 14, 1969 by the Federal Reserve System.

2. Europian Central Bank announced on 4 May, 2016 that it would phase out the 500 Euro notes by the end of 2018.



Other Factors That May Affect The Exchange Rate Of A Currency Include:
1. Ratio of goods/services importation to exportation

2. Availability of currency and number of complying users.

The Illegal illegal printing of currency by the CBN according to as reported by some news media outlets has a long way to desctroy value on our cash.

3. Inflation rate

4. Government debts and federal reserve.

5. Political policies and stability

6. And many more



My Recomendations:
Nigerian government should permanently discontinue and remove 500 NGN and 1,000 NGN currency notes from circulation. Reintroduction of 50 Kobo, 1 NGN and 2 NGN coins should also be done.

A government fighting corruption will yield to this advice as abundance of lower denomination currency will discourage looters from hoarding and keeping cash in a safe instead of bank.

Caveat emptor:
This writeup is a personal opinion resulting from my many observations. It is not a scholarly work and should not be treated as one. Copy-and-paste bloggers should please reference the link and author of the article.




TOP PERFORMING CURRENCY (UPDATED CONVERSION RATEs)

1. Kuwaiti dinar (KWD)
The Kuwaiti dinar is the strongest currency in the world with 1 Kuwaiti dinar buying 3.26 US dollars (or, put another way, US$1 equals 0.31 Kuwaiti dinars).

Kuwait is located between Saudi Arabia and Iraq, earning much of its wealth from being a leading global exporter of oil. The Kuwaiti dinar was introduced in the 1960s and was initially pegged to the British pound before being re-pegged to an undisclosed basket of currencies.

2. Bahraini dinar (BHD)
The Bahraini dinar is the second strongest currency in the world with 1 Bahraini dinar buying 2.65 US dollars (or US$1 equals 0.38 Bahraini dinars).

Bahrain is an island nation in the Persian Gulf off the coast of Saudi Arabia. Like Kuwait, the country earns much of its wealth from oil and gas exports. The Bahraini dinar entered circulation in 1965 and is pegged to the US dollar.

3. Omani rial (OMR)
The Omani rial is the third strongest currency in the world with 1 Omani rial buying 2.60 US dollars (or US$1 equals 0.38 Omani rial).

Oman sits between the United Arab Emirates and Yemen at the tip of the Arabian peninsula. As with its other wealthy neighbours, Oman is a major exporter of oil and gas. The Omani rial was introduced in the 1970s and is pegged to the US dollar.

4. Jordanian dinar (JOD)
The Jordanian dinar is the fourth strongest currency in the world with 1 Jordanian dinar buying 1.41 US dollars (or US$1 equals 0.71 Jordanian dinar).

Jordan is largely land-locked country in the Middle East. Jordan is less dependent on oil and gas exports than its neighbours and has struggled with sluggish economic growth and rising debt. The Jordanian dinar entered circulation in 1950 and is pegged to the US dollar.

5. British pound (GBP)
The British pound is the fifth strongest currency in the world with 1 British pound buying 1.28 US dollars (or US$1 equals 0.78 British pounds).

Britain is the sixth largest country by Gross Domestic Product (GDP), according to the World Bank. The pound was first introduced in the 1400s before being decimalised in 1971. It is free-floating and thus not pegged to other currencies.

5. (Tie) Gibraltar pound (GIP)
The Gibraltar pound is the joint fifth strongest currency in the world with 1 Gibraltar pound buying 1.28 US dollars (or US$1 equals 0.78 Gibraltar pounds).

Gibraltar is located at the southern tip of Spain and is officially a British territory. The Gibraltar pound was first introduced in the 1920s and is pegged to the British pound (at par, meaning that one GIP equals one GBP).

6. Cayman Islands dollar (KYD)
The Cayman Islands dollar is the sixth-strongest currency in the world with 1 Cayman Islands dollar buying 1.20 US dollars (or US$1 equals 0.83 Cayman Islands dollars).

The Cayman Islands is a British territory in the Caribbean and is an offshore financial centre. The Cayman Islands dollar was first introduced in the 1970s and is pegged to the US dollar.

7. Swiss franc (CHF)
The Swiss franc is the seventh strongest currency in the world with 1 Swiss franc buying 1.15 US dollars (or US$1 equals 0.87 Swiss francs).

The Swiss franc is the official legal tender of Switzerland and Liechtenstein and is seen as a safe haven due to Switzerland’s political stability. The Swiss franc was introduced in 1850 and was later briefly pegged to the Euro before moving to a free-float.

8. Euro (EUR)
The Euro is the eighth strongest currency in the world with 1 Euro buying 1.10 US dollars (or US$1 equals 0.91 euros).

The Euro is the official currency of the Eurozone, being 20 out of the 27 countries that form part of the European Union. The physical currency entered circulation in 2002 and is free-floating.

Related: Euro to AUD forecast

10. US dollar (USD)
The US dollar is the 10th strongest currency in the world, worth exactly 1 against itself. All other units of currency across the globe are worth less than a US dollar.

Created in the 1700s, the US dollar is legal tender in the USA, other US territories and sovereign nations including Ecuador and Zimbabwe.

The US is the world’s largest economy by GDP and the US dollar is by far the most-traded currency globally.

The US dollar is also the largest reserve currency in the world (the currency most held by central banks) and is the currency used to price many commodities, including oil, gold and copper.
https://www.forbes.com/advisor/au/investing/currencies/top-10-strongest-currencies-in-the-world/


My piece of contribution.

trash!

The value of currency is approximately tied to the goods it can buy.
Nations have the liberty to produce goods and print currency.

Using rice alone to represent all services and products, let's say two nations produces just rice. Nation-A and Nation-B averages 10 million bags of rice but nation-A prints ten time more money than nation-B, to an outsider facing the prospect of buying rice from any of the nations, all the money in both nations can buy only 10m bags of rice. That makes the currency of one country more valuable.
The difference in the value will be determined by what you can buy with the money of both nations which is the goods available in both nations. That's makes the currency in B 10 times stronger than that in A.


Another way to look at it, if both nations use same currency, and have equal amount of money in circulation, but one nation has ten time more goods than the other nation. It means the money one nation can buy 10 times more goods than the other and has to be ten tiimes stronger.

They invade mosques and kidnap while killing to show seriousness but wipe out community of churchgoers and rename them.

That politician needs to lay hands on so many Nigerians including pastors and politicians. The grace to quit a bad thing is a theoretical thing in Africa.

I she this as the last kicks of a dying horse.

After 90 day they are back for the remaining 50%, what happens then. It is just a move to slow outflow of forex and allow the exchange market some breathing space.