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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


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    Nigeria’s naira plunges 30pc after central bank gives up on dollar peg

    Lobo
    Lobo
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    Posts : 28411
    Join date : 2013-01-12

    Nigeria’s naira plunges 30pc after central bank gives up on dollar peg  Empty Nigeria’s naira plunges 30pc after central bank gives up on dollar peg

    Post by Lobo Mon 20 Jun 2016, 5:17 pm

    Nigeria’s naira plunges 30pc after central bank gives up on dollar peg




    Nigeria’s naira plunges 30pc after central bank gives up on dollar peg  101175644_A_trader_changes_dollars_for_naira_at_a_currency_exchange_store_in_Lagos_Nigeria_Febru-large_trans++eo_i_u9APj8RuoebjoAHt0k9u7HhRJvuo-ZLenGRumA The Nigerian naira has lost nearly a third of its value Credit: Joe Penney/Reuters


    20 June 2016 • 12:36pm
    Nigeria’s naira lost nearly a third of its value overnight, after policymakers decided to scrap the currency's peg against the US dollar.
    The Central Bank of Nigeria had defended a peg of 197 to 199 naira to the US dollar for 15 months, but gave up on Monday morning, after spending more than $2.7bn (£1.9bn) of reserves this year supporting the naira.
    Godwin Emefiele, governor of the Central Bank of Nigeria, had promised a “more flexible” foreign exchange regime, but the decision to remove all controls on the currency came as a shock to markets when it was announced last week.

    This will release a pressure valve for the economyYvonne Mhango

    Yvonne Mhango, a Renaissance Capital economist, said: “We never imagined a free-floating naira”. The Nigerian currency tumbled by 30pc once trading began on Monday, leaving the naira at 261 to the US dollar.
    Analysts expect the currency could weaken further over the coming weeks, perhaps to as little as 390 naira to the dollar.
    The plunge could aid the oil-reliant economy, which has been battered by diving crude prices. Ratings agency Moody's said that "an immediate consequence of the naira depreciating is likely to be a significant increase in oil-related revenue".
    Ms Mhango said that floating the naira freely would “release a pressure valve for the economy”, which would in turn “see the economy beginning to thaw and green shoots emerge possibly as soon as a year from now”.
    John Ashbourne, of Capital Economics, said that the peg was abandoned after “contributing to a crippling shortage of dollars in a country that is heavily dependent on imports”. On the black market, one dollar has cost Nigerians as much as 370 naira this month.

    Naira per US dollarNigeria's US dollar peg lasted 15 monthsSource: BloombergJul '15Jan '16Oct '15Apr '16180200220240260280
    Highcharts.com

    “Few consumers were ever able to access US currency at the official rate,” Mr Ashbourne said.
    As such, he explained that “the inflationary effect of this rapid devaluation might not be as significant as is widely feared”. Capital Economics does not anticipate that price growth will rise much above May’s 15.6pc year-on-year gains.
    Mr Ashbourne said: “The new system should reduce the shortage of foreign exchange in the economy and – in the long run – reduce strains in the balance of payments by discouraging imports and boosting export competitiveness.
    “But the new system certainly does not mark the end of Nigeria’s economic problems. The country faces a daunting array of challenges; including power shortages, governance issues, and disruptions to oil output. A weaker currency is, at best, a necessary but insufficient condition for an economic recovery.”
    http://www.telegraph.co.uk/business/2016/06/20/nigerias-naira-plunges-30pc-after-central-bank-gives-up-on-dolla/
    Screwball
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    Nigeria’s naira plunges 30pc after central bank gives up on dollar peg  Empty Re: Nigeria’s naira plunges 30pc after central bank gives up on dollar peg

    Post by Screwball Mon 20 Jun 2016, 11:59 pm

    Another one down!

      Current date/time is Sat 25 May 2024, 12:39 am