Reasons Dollars will Continue to Go Down

There are many unlearned or mediocre kids who don't follow events on this platform. Maybe it's because they are too lazy to read or ask questions. You will hear some say the CBN is busy defending Naira, some will say the CBN is depleting the foreign reserve and pumping the USD into the market.

Some are saying how long can the CBN continue pumping the USD? . I can assure you that the CBN has got it right, and their formula is working. It only takes time to get a working formula, but once you get it gbam!

FYI, CBN does not defend the Naira again, it is still floated. The CBN does not fix rates, defend or flood the market with borrowed dollars. The CBN gets its rates from the lowest band of I&E FX window at the close of the day's business. You can google what I&E window is.

Reasons Dollars will continue to go downwards


Dangote Refinery
The USD is on the downward trends, may reach unexpected low before June as petroleum marketers started lifting AGO (Diesel) from Dangote refinery earlier this week. PMS lifting to commence in May. This will further crash the USD.

Dollars are now more available to other importers as oil marketers don't need dollars again to import

The reason being that large percentage of the importers sourcing the USD are petroleum products importers, now that they pay in Naira for lifting from Dangote refinery, there will be a less pressure on the USD and dollar will be more available to other importers who do not need as much dollars as petroleum products importers.

CBN now collects oil sales revenues
We now have more dollars available than we used to. CBN now collects oil revenues as against the old practice when the NNPCL used to collect the money in USD from our oil buyers without remiting same to the CBN.

The payment is now made directly to the CBN to avoid any shady deals or missing in transit. As a matter of fact, as at today, the rate at the parallel market is cheaper than the official market.

BDCs are now at the mercy of the CBN as they are now regulated
The BDCs are now begging the CBN to adjust the rate below the parallel market rate. This may happen this week if the CBN sees how things are going. The reason for this is that hoarders are now in panic sales for the fear of further losses.

BDCs are now buying from the hoarders less than the official rate. And this trend will also make the CBN adjust its rate. Another banger is that the BDCs are not allowed to sell more than 1.5% of the buying rate from the CBN, unlike before when we used to have a wide gap between the official and the parallel rates.

CBN USD policies on DMB
The CBN has also tightened the noose on the banks. Nobody can get the USD without actually needing it. You submit your three years tax certificates, international passport, visa, oversea's vendor's account number (in which the bank will help you pay as you will not be given any physical dollar), proforma and any other document as may be required by your bank.

Similarly, your bank will have to apply to the CBN portal on your behalf, and upon qualifying for the application, your bank will pay the said amount into your oversea's vendor's account. There is no room for hoarding of the USD which will in turn cause unnecessary artificial scarcity in the market.

As an importer sourcing dollars from the bank, you are only entitled to 20 percent of the total sum needed, and note that this will not be given to you in cash either. It will be paid into your dollar card which you can only spend outside the country when you travel abroad for your importation activities. You don't have any business spending dollars in Nigeria.

The same thing goes for those who patronise the bereaux de change, before you can get the USD from the aboki, you must definitely need it outside the shore of Nigeria. There is no longer undocumented transactions. You have to submit your NIN and BNV. If you are going to study abroad and you want to pay your school fees, you must submit a copy of your admission letter, school invoice and account number. Then the aboki will help you pay.

No longer undocumented transactions, and you cannot collect it from the aboki, let alone hoarding it. Just like an importer, you as a student are also entitled to 20 percent of the total amount. You may need some money outside the school fees, like accommodation, transportation and some other miscellanies. Don't forget that aboki will not give you this 20 percent in cash, it will be paid into a designated facility designed by the CBN.

You may think you can buy your way and play the game but I doubt it, because no aboki will want to toy with his business. As a matter of fact, they all now register with 250k for one state operation and 500 million Naira deposit. For an aboki that wants to operate nationwide, they have to register with 500k and deposit 2 billion Naira. You heard me right, 2 billion Naira. And any infraction may make them lose their deposit.

No aboki will even favour you at the expense if his business because the CBN is now giving them 20,000 dollars per week to trade with and they will pay the Naira equivalent to the CBN. Though, they have not reached the target, they can only get 10k USD for now, and as more dollars are available, they can get the 20k USD as promised.

Deregistration of 4173 BDCs
I don't think any aboki will want to play any dirty game to lose this opportunity, because henceforth, they have to account for how the USD given to them the previous week was used with documents to back it up before they can qualify for another allocation. And you think with all these stringes attached, an aboki will want to favour you as a customer to lose his business? Not even a politician can make him play the ball. For your information, about 4173 abokis were deregistered, and licenses withdrawn. We are only left with manageable 1500 plus. Any uncomplied aboki will be deregistered with the speed of light.

In a long while, this month of March was the only month the federal allocation would be shared without dollar going up. Instead, it nosedived. I trust our super corrupt governor's before these policies, they would have converted their state allocations to dollars, weakened our Naira and strengthened the dollars. Awon unpatriotic mofos. Another shocker is that commercial banks cannot hoard dollars again. They are given a threshold to maintain and any excess should be sold to their customers.

This also includes the profits they make on the dollar transactions that used to be shared by the shareholders before now. Any profit from the dollar transactions should be reinjected into their dollar business and when the threshold is reached, they should sell the spillovers. Is God not wonderful? Our almighty banks, abokis and super governors are all caged with one stroke of policies. Nigeria is on the right track and we are going to get it right.

Inflation will come down
It will take time to reflect, especially if the CBN can sustain the policies. Most importers imported when the exchange rate was high. The new price will only reflect when they want to restock.


Mohammed
wrote from Ilorin.

But why are you worried?

Abi is it your dollar they are hoarding?

Port refinary nko when will that one start operation? Abi na forever

freemanq:
Port refinary nko when will that one start operation? Abi na forever

It started last week

I'll sell my dollars when the Naira becomes the reserved currency of the world. First poster is right, Why are you all so worried about people holding the dollars? You guys just became really caring overnight..

So let dem open binance p2p

Who go open am? You are on a long thing.