Central Bank Of Nigeria Manipulating Naira Value - Yet Currency Falls 10%
I'd prolly write about this a thousand times if necessary, until the system domination comes to a stop. Inflation in Nigeria has been on the high side, sometimes it becomes increasingly scary venturing into business considering the current state of the nation. Some time back, I wrote about how People Will Choose Crypto Over CBDCs a couple of things was highlighted there, including the fact that ;
[ Nigerians prefer to hold the Dollar than have Naira laying around. The Country's economic distress has made it difficult for major business tycoons to trust their wealth preserved in naira. It wouldn't even be called a preservation if it keeps losing value to inflation, prices of goods are going up and beating down on citizens' finances.
The Nigerian government has been up to it, when it comes to limiting the supply of the foreign currency (the dollar) in the country. However, you can't actually restrict people from getting what they want. The black markets have seen great inflow as though the spot markets had figures manipulated. The foreign exchange market has suffered from the non availability of the dollar, business owners have rather restrained their dollars from entering the markets, in anticipation of future import difficulties which may be experienced in the country. I walked into a bank some time back, I discovered the dollar was exchanged therein at the rate of 410/$ and 411/$.
This rate is terribly low, a dollar in the parallel market cost well close to 600 naira, it's crazy, but if you look at the P2P cryptocurrency trading platforms, you'd notice Stablecoins like Usdt with such high figures in exchange for naira, and this is only as a result of the native currency market activities. The Central Bank has been manipulating the Naira Value for quite some time now, this rate of 410/$ has been fixed for all commercial banks to follow, and that's been actually sad. In times of dollar volatility, the currency may see some interests flowing in, but it will however not affect the USD value. Reason being that CBN would probably already have enough reserves to feed those who'll come buying, so the purchasing influence will not be felt on the foreign exchange. In some way, those exchanging Naira for dollars would likely still lose value, crypto, would however be the most fancy asset during Fiat bear season.
As reported on news.bitcoin.com
The new parallel market exchange rate of N570 may suggest that the Central Bank of Nigeria (CBN) is now overvaluing the naira by 40%. In fact, this latter point appears to be corroborated by comments made by the CBN governor, Godwin Emefiele. In his comments to a group of investors in late June 2021, Emefiele suggested at the time that the naira was overvalued by 10%. He also hinted that devaluation of the naira was in the cards.
This move however hurts business owners receiving foreign payments. Exchanging the dollar to naira would mean losing almost 30% on every dollar. It doesn't however affect citizens who go to the bank to buy the dollar, only the sellers get affected, because buyers are buying at almost a 30% low, while sellers which are mostly business owners would be exchanging at a 30% loss. This makes it rather depressing and Fiat holders now prefer saving their dollar instead. In coming times, people will discover that neither of these currencies deserve to hold their wealth, and crypto assets will see great inflow of cash. As this point, having foreign connections are highly recommended, I could only imagine how much I could make buying cheap dollars from the bank.
Discord user; Badbitch#4158, interested folks can text :)
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