Naira/ Dollar Conundrum

So we have all been wondering how much sliding the Naira was going to do. By mid last week the dollar was trading at somewhere close to N250 and we were all lamenting on the way forward…there was no clear direct path. We all know the CBN’s job is to control inflation but in an unstable economy as ours- it also is to help the currency retain value.

Imagine my confusion when on saturday or so it was I was reading my email as I was climbing the six flights of stairs into my apartment thanks to PHCN’s refusal to give light – so lift “no working” and i was reading emails as a distraction. GTbank specifically sent out an email that they wouldn’t be processing foreign currency deposits into domiciliary accounts, neither will they give out travel allowance or allow foreign withdrawals. I panicked, then i now remembered I have no foreign currency to give them anyway and no money to buy “intahnetional ticket” to go to “the overseas”. When I finally found the key to my apartment i hissed and moved on.

My friend now called me in  a panic that she needs to travel and if i can give her USD from my account in America and she will pay Naira- something about not wanting to cary and declare cash. I laughed harder, as in the devil was mocking me – no money to travel talkless of holding dollar then she even called me again on top? Shior. I told her to call mallam – change the money and put it on different parts of her body – i don’t understand why Nigerians are reluctant to declare money- sometimes i believe we just dislike processes. She called me back and said Mallam said N220 for Dollar. I said whàaaaat?😮 it has dropped to as low as N210/206 as of Monday I hear.

Now keep in mind also, there were already limits on how much the banks were getting, Zenith for instance had reduced BTA from $4000 to $2000 and you had to book 3 weeks in advance i think. And something about the bank only getting $20k per week-likely branches sha. I also hear that BDC’s can only get money based on the $4k BTA allowance per BVN per quarter starting August. So BDCs will start making less money because they will need to submit BVNs with their applications and you can’t use the same BVN more than once a quarter.
Sidenote: my BVN is for rent if you have a BDC. Just send me an email “lez discuzz”😇

At this point the entire culmination of madness between the speculators – allegedly mostly political thieves and thugs has led to excess dollar in the system and the CBN has figured out a way to make the money useless in their hands resulting in sort of a fire sale. While this argument is valid somehow- the cost of goods is still high because of import dependence. And Nigeria we know prices never come down.

My next question now is what the long term fix is. From a simpleton’s standpoint – the bank not accepting forex deposits will hinder trade especially imports. Me a lame woman – i paid for my destination wedding using a domiciliary account. Nigerian banks don’t transfer from local currency accounts to foriegn banks…don’t ask me how that makes sense. You have to withdraw the Naira, change on the black market and bring back the dollar to deposit in domiciliary account.

My other question is will the black market rate hit the bank rate of N197? Nobody is willing to stick their neck out and say it will- certainly i for one do not expect the black market rate to drop below bank rate, but there’s a slight possibility in my mind that it may stop around N197 to N200.

Can we get a Minister for finance and coordinating economy? Is that what they are called? Someone who’s job it is to drive sustainable policy while keeping us informed? Is that too much to ask?

From my limited knowledge – the entire thing seems like “putting anbesol on a rotten tooth” anbesol is an oral pain relief- it will dull the pain but the tooth is still rotten and has to be removed. Is the long term fix as simple as pegging the Naira to the dollar or a re-denomination of the Naira?

I don’t have the answer, but I sure do have the questions..please what are your thoughts?

NESTR
OAD

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14 Comments on Naira/ Dollar Conundrum

  1. the thing is a big puzzle, sometimes I try not to think of it but it affects us all one way or another
    I just hope it doesn’t continue this way o

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    • Crimson, it affects us a lot more than we realise and thats why i get angry at personal finance coaches. No one talks about these things and the folks that make the most noise act like we dont exist in a highly volatile economy.

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  2. Mbok this wan pass me, I’m jez glad the dollar is coming down dassal.

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  3. Well,i learnt, the dollar is up today again. I haven’t confirmed, if true, I’m not surprised, its expected.
    The fix CBN is trying is not sustainable.
    The dollar is still strong on a global scale, crude oil price is still down, Nigeria is mono economic, Nigeria is dependent on imports, there is still lots of corrupt practices going on, there isn’t any new fiscal policy since there are no ministers yet. So…
    Merely forcing us to not receive nor transfer funds to maintain Naira rate is a joke…an unfair one if you ask me.

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  4. This whole thing is confusing. It is not even sustainable. Monday it was 210, Tuesday afternoon 222, by evening it was already 225. this morning, my dollar man said its now 235 and it might still rise. I hear it’s only in Abuja that the price is rising again, don’t know how true it is.

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  5. It is very funny indeed, because importers are still using dollars and its still in demand globally, this isn’t a quick fix but delaying the inevitable. My problem with economic theories is that they look good on paper but don’t work well in reality(no shades thrown) hehe

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  6. Sitting this one out. Let’s see how it goes…….

    Miss Pynk, we miss you in the comment section. Please come back. 🙂

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  7. That’s how a friend in naija buzzed me that do i need naira in lagos, he’s having a hard time transferring money to his yankee account.

    Me i kuku needed Naira. I looked at exchnage rate it was N250/$, dude was telling me he was seeing N209/$ (you can’t swarve me oh). Me i don’t know how to shout. I just told him thats a great rate. Instead of giving me naira in naija, I will just collect $ so we are not discussing rate. Let me change the money myself and collect more Naira.

    While I am also worried about the instability, it benefits me for now so let me take advantage as best as i can

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    • Bee he wanted to take advantage of you. lol at him seeing N209 when it was N250… thats totally unfair. It does give you the perception of better value for your money when you are overseas – but the Naira is still unsexy.

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