Nigerian Naira again: “The Central Bank of Nigeria (CBN) injected on Friday 197.71 million dollars on the exchange market (FX) in order to restore calm while the Nairas collapsed at 1,600 Nairas per dollar – the lowest exchange rate since December – under the growing pressures of the United States.
Ideally, Nigeria should not inject funds to stabilize Nairas because it is driftwood. A floating regime will force market forces to do work. The fact that we are still injecting funds after two years implies that Naira cannot swim in a sea of global currencies when she floated. Simply, Naira does not have the productive life jackets to float!
Governor, except Naira: LEGUREZ him at N1 200 / $ and allow him. I have an Excel sheet where I followed the gains and losses following the float. My data showed me that Naira is still subsidized, not by the government, but by the private sector. This private sector subsidy costs massive government income. Thus, companies like MTN who sent tons of money like taxes have nothing to send.
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My data shows that the cost of opportunity (income, investment, value of assets, etc.) and the additional associated loan due to the loss of income in the private sector is close to the amount that the government was originally spending for the Naira subsidy before the float. At a time when I modeled asymmetrical impacts such as the loss of venture capital funding for startups that have been triggered by floatants, this becomes a negative policy on national economic competitiveness and growth.
I am an investor and I speak with dozens of global investors each year. THE # 1 The nairas problem is volatility and not necessarily the exchange rate. But as we always inject funds to stabilize Naira because the American prices sneeze, why not just trap it? The President is rational as an accountant and will see it from figures. As always, my greatest respect and I finish from my post in June 2023: “ The Nigeria flotation of his currency, although progressive, will cause serious disturbances in the economy – and a stable state may not come as most experts have predicted. This fund injection means that the system is still unstable after 2 years.
CBN injects $ 197.71 million to stabilize the FX market while Naira falls to N1,600 / $ under pressure from the rate of 14% of Trump on Nigeria
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