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Nairaland Forum / Nairaland / General / Business / What exactly Is The Benefit Of Floating The Naira? (25950 Views)
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Re: What exactly Is The Benefit Of Floating The Naira? by Smartmoneypeeps(m): 9:22am On Feb 14 |
What exactly Is The Benefit Of Floating The Naira? Here's what I think though... Well! Floating the Naira means letting its worth be decided by buyers & sellers, not the government. Benefits can be like: More competitive exports: Like it makes Nigerian goods cheaper abroad, potentially boosting sales & bringing in more foreign cash. More freedom for the Central Bank: Lets them focus on controlling inflation without worrying about the exchange rate as much. More flexibility: The currency can adjust to economic changes, thereby helping the economy adapt over time. But there are downsides too, like short-term price swings and uncertainty for businesses. It's really a complex issue! |
Re: What exactly Is The Benefit Of Floating The Naira? by Fearurcreeator: 9:24am On Feb 14 |
Peppysco:Am telling you... So far I have learned one or two things on this topic |
Re: What exactly Is The Benefit Of Floating The Naira? by jedisco(m): 9:24am On Feb 14 |
PoliteActivist: Why are those investors not rushing to invest in Zimbabwe, Argentina or Lebanon? Foreign investors want to invest in a nation with a relatively stable currency not one with galloping inflation. The best they'd seek would be to buy unprocessed natural resources for pennies leaving the locals in penury. Still on investors, the first foreign investors you'd get would be Nigerians in diaspora. If this group have stopped investing back and only send money for living expenditure, then is it foreigners that'd rush to invest? 3 Likes |
Re: What exactly Is The Benefit Of Floating The Naira? by yashau(m): 9:24am On Feb 14 |
DeLaRue:Fl they Lord and saviour promised to the same , it's because they hate Tinubu that' is why their don't want to admit
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Re: What exactly Is The Benefit Of Floating The Naira? by pharmagba: 9:25am On Feb 14 |
Jessyjeff:Obidients as usual. Dropping figures with unguarded recklessness, |
Re: What exactly Is The Benefit Of Floating The Naira? by just2endowed: 9:26am On Feb 14 |
PoliteActivist: You have almost solve the puzzle. China can float their currency because China has great export in trade than import. If you ask tinubu if he understood the economic technicalities behind floating a currency, I believe he doesn't have a clue. Back. For a country to float her currency, export must be greater than import. The balance of trade must be in surplus, investment confidence in a country must be all round positive, security and local production must substitute foreign goods, etc. If all these are in place, then naira cam compete head to head with other currency 1 Like 1 Share |
Re: What exactly Is The Benefit Of Floating The Naira? by 004gist: 9:26am On Feb 14 |
DeLaRue:... See the jagoon you wrote there. Which is 3 billion? Stop misleading the public. Our foreign reserves when Buhari left stood at 36 billion dollars. The question we should be asking our self is why is the foreign reserve not rising while still going down? Where are the savings as a result of subsidy removal? |
Re: What exactly Is The Benefit Of Floating The Naira? by sulaak(m): 9:26am On Feb 14 |
Inspirer1: I knew things would get bad when the World Bank director for Nigeria, Shubham Chaudhuri, was very prominent onNigeria's media and finance conference. The free market theory only works for productive countries with something to sell. Nigeria can't even produce the food that they eat due to insecurity and poor infrastructure. Shubham Chaudhuri, World Bank country director for Nigeria, says the bank has committed over $11 billion in the past three years to the government at both the federal and the sub-national levels.1 Nov 2023 Wale Edun: Nigeria appointed to lead World Bank’s African governors’ forum |
Re: What exactly Is The Benefit Of Floating The Naira? by hosemujica: 9:27am On Feb 14 |
ckc: The one benefit is that all these bank MD’s will stop being stupidly rich by round tripping on our common wealth, if well implemented it can reduce a lot of corruption. I have a feeling that the economic hardship is just a way for the economy to rebase. And again, corruption will fight back for a while. Mind you I’m not a fan of Tinubu, but I’m optimistic. 1 Like |
Re: What exactly Is The Benefit Of Floating The Naira? by Didi2d(m): 9:27am On Feb 14 |
kokoA: That one na greed from our own people, this is where price control is needed. Someone ones told me how Nigerians that deals on tiles go to one factory in agbara, ogun state to buy tiles. But, these traders will tell you and I that the tiles are imported, forcing to buy it costly believing its really imported. So, who's to blame? |
Re: What exactly Is The Benefit Of Floating The Naira? by Maxxim: 9:27am On Feb 14 |
kokoA:Yes that's true, a benin woman told me they still sell rice at the rate of 40k per bag there at benin republic whereas local rice is 70k, someone should tell me why I need to purchase a local one if I could get my hands on the foreign one |
Re: What exactly Is The Benefit Of Floating The Naira? by abdsamad(m): 9:28am On Feb 14 |
In other words, it is a long, long term solution |
Re: What exactly Is The Benefit Of Floating The Naira? by LeopardX: 9:28am On Feb 14 |
malali:.....but if you don't fight corruption which is the biggest elephant in the room, all these will amount to nothing. |
Re: What exactly Is The Benefit Of Floating The Naira? by 004gist: 9:28am On Feb 14 |
Deogratiasfx: We are import based.. Get that in your head. We import food to electronics to cars etc. We are import not export based. Nigeria will feel the real heat of the subsidy removal soon |
Re: What exactly Is The Benefit Of Floating The Naira? by casualobserver: 9:28am On Feb 14 |
malali: This is actually completely wrong. It makes local debts easier to pay because they are Naira debts and we get more Naira. However it makes the payment of foreign debts more difficult because now you need more Naira to pay foreign debts. This last point affects businesses and individuals who earn in Naira but have foreign debts for instance individuals who have mortgages abroad. 1 Like |
Re: What exactly Is The Benefit Of Floating The Naira? by BreconHills(m): 9:31am On Feb 14 |
ckc: The question you should answer is what was the alternative? Answer this and you will get a well thought answer beyond the "Tinubu is a druggie crowd. Sincerity is a prelude to truth. |
Re: What exactly Is The Benefit Of Floating The Naira? by Inspirer1: 9:34am On Feb 14 |
sulaak:hmmmm, so sad. I wish we can get answers to the enquiries made in this tweet 👇 https://twitter.com/ishakaa/status/1757397594236395764 |
Re: What exactly Is The Benefit Of Floating The Naira? by PROPEACE: 9:35am On Feb 14 |
PoliteActivist:This thing you posted is nonsense. Nigeria isn't China. We produce close to nothing. It is a producing economy that can confidently crash it's currency. When you import almost everything, you don't want your currency to be weak. Simple! |
Re: What exactly Is The Benefit Of Floating The Naira? by Brushstrokes20: 9:35am On Feb 14 |
By and large, it's a diabolic policy aimed PAUPERISING IMPOVERISHING /the people at the expense of foreigners and an avenue for making more LOOT available to fund the LAVISH LIFESTYLE OF SELF SERVING LegisLOOTERS, execuTHIEVES etc! The shyyythole is cursed with useless, self serving THIEVES masquerading as leaders! 💯💯 # ENOUGH OF NONSENSE |
Re: What exactly Is The Benefit Of Floating The Naira? by sparko1(m): 9:35am On Feb 14 |
Gadafii: This are companies making gains from the previous arrangement. |
Re: What exactly Is The Benefit Of Floating The Naira? by ezekins: 9:36am On Feb 14 |
Has it brought people and investments? What is nigeria producing that she wants to export that warranted floating of the naira? Nigeria is running a monoeconomy based on crude. Floating naira was a reckless miscalculation of tinubu's government that has killed the naira and brought untold hardship to the citizenry. Anybody still supporting this government should be ashamed of his or herself. PoliteActivist: |
Re: What exactly Is The Benefit Of Floating The Naira? by gratiaeo(m): 9:39am On Feb 14 |
DeLaRue:All this things you mentioned there was created by APC, how much was dollar before APC catastrophic government took office? They created this 2 exchange windows for them and themselves, they will sell dollars at N440 to their cronies who will now sell at N600 - N700 to importers. Nigeria can never tackle it problem with APC goons being in power, Nigeria needs honesty leader not this quarks |
Re: What exactly Is The Benefit Of Floating The Naira? by sexyto(m): 9:40am On Feb 14 |
PoliteActivist:So what does Nigeria really produce to warrant the floating of the naira as per compared to what China are producing? |
Re: What exactly Is The Benefit Of Floating The Naira? by Resurgent2016: 9:40am On Feb 14 |
ezekins: Don't mind them. If devaluation is what makes a country's economy great, Venezuela and Zimbabwe should have the best economies in the world. They forget the likes of Saudi and UAE, who being petrodollar economies, defend and maintain a very stable exchange rate immune from shocks that come with the cyclical nature of crude prices. |
Re: What exactly Is The Benefit Of Floating The Naira? by blaise26abj(m): 9:45am On Feb 14 |
ckc: I am sure people have done justice to the benefit . However the issue with Tinubu’s policy is that he didn’t do it with our insatiable appetite for foreign goods in mind . The demand for dollars to import is too much . Also the prevalent corruption in our banking sector and CBN as well. What he should have done was ban parallel markets . Also make it that You can’t deposit more than 1,000 dollars physically in Nigeria into your domicilary account in a month any thing else should be at CBN with EFCC present . All earned dollars in your Dom account can only be withdrawn in Naira . Lastly after everything has stabilized , let Naira cards transact online with a cap and inability to withdraw dollars abroad . |
Re: What exactly Is The Benefit Of Floating The Naira? by Skyehigher1: 9:49am On Feb 14 |
Thanks for this great question and thanks also goes to those that shed more light on this very educative and informative |
Re: What exactly Is The Benefit Of Floating The Naira? by Ebeano49(m): 9:52am On Feb 14 |
PoliteActivist:Wrong! Devaluation encourages export only when you have things to export. What exactly is Nigeria producing for export? Absolutely nothing! US complain about China's currency devaluation because China is the global center for production. Almost every thing the world use today are made in China. |
Re: What exactly Is The Benefit Of Floating The Naira? by dejol88: 9:54am On Feb 14 |
Ah, the government had the audacity to inform us mere mortals that there are insufficient funds to continue defending the naira, as if we weren't already aware of their incompetence. Instead, they've decided to squander 24 billion naira on funding hajj, evidently prioritising their own agendas over the welfare of the nation. Typical government mismanagement, I dare say. |
Re: What exactly Is The Benefit Of Floating The Naira? by Yashita: 9:56am On Feb 14 |
PoliteActivist: What’s with the *Politeness* you always put before commenting?😏 Not like it’s one interesting sig. 😒 |
Re: What exactly Is The Benefit Of Floating The Naira? by sulaak(m): 9:57am On Feb 14 |
004gist: Nigeria had no foreign reserves. The Buhari cabal decimated the funds. The majority of the reserves were made up of loans and bonds from Western banks. A combination of foreign exchange forwards, securities lending, currency swaps, and outstanding contracts has weakened Nigeria's net external reserves to an all-time low of $3.7 billion as of the end of last year, according to JP Morgan.22 Aug 2023 “The economy was poorly managed, and they are not willing to take advice; in the last eight years, apart from sycophancy, nothing has been done; those sycophants are those buying the dollar at the rate of N400 and selling it at the rate of N600 to N700. |
Re: What exactly Is The Benefit Of Floating The Naira? by hodestruth: 9:57am On Feb 14 |
The only benefit one will tell you is the basic economics we all studied in schools, that if you devalued your currency, you encourage export and discourage import, though that is the best thing to do but in our situation, what do we produce for export, almost all industries had closed due to power situations, diesel to power machines is out of reach, we should have rectified power, encourage production before devalueing our currency, Japanese and Chinese did it this way and they are better for it but we put the horse before the cart, see the hardship it brought to the citizens, other presidential candidates would have done it differently, though it's not too late to make amends and reduce the hardships on the citizens |
Re: What exactly Is The Benefit Of Floating The Naira? by musicwriter(m): 10:02am On Feb 14 |
ckc: We won't know because we're the ones making the shift in real time. Future generations would benefit from it because they won't know either that the Naira was floated. This pricing would be natural to them. |
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