Topic: The Role of Currency Spectators In Currency Value Case Study of 9ja ₦ vs $ - page 2. (Read 270 times)

The margin between the CBN rate and the parallel (black) market rate before was very close, but Nigerians that are demanding for United States dollars are increasing and the rate they are demanding for foreign currencies in general is increasing. Nigerians have more been dependent on imports more than they export and this is depleting the foreign reserve.

Because of that, the CBN have tried all means possible to inconvenient Nigerians, example is the naira master cards that Nigerians can use to make over $3000 or maybe more international transactions before in the past, but it was later reduced by CBN to $100. Later, CBN makes it impossible for Nigerians to use naira master card for international purchases and services. Although, you can go to bank and request for a dollar card. But like me, I have not even done that up till now. I believe people making international purchases using card might have reduced because if this. This is one that I know, but a means CBN is looking for ways to reduce requests for foreign currencies.

The CBN tried all other ways to inconvenient Nigerians but not increase the dollar exchange rate to the amount it supposed to be, therefore decreasing the value of naira not up to the price it supposed to reduced it to. But in the parallel market that is determined by how people are (demanding for) or trading naira to dollar and other foreign currencies, the demand for the foreign currencies is higher than the CBN prices for them. CBN only tried to manipulate the price, but the demand price is what people are going for. The higher the demand the higher the price.

To protect the foreign reserve depletion and to pay workers salary, the government through the CBN do reduce the value of naira, but if the demand for foreign currencies is what that is reducing it, the CBN will like it inorder to protect the foreign reserve. The demand may continue to increase, but this will increase the dollar price too and the foreign reserve depletion will reduce.

With the persistent De valuation in the value of the Naira on the exchange market,  over the years the Nigeria naira has constantly lost its value to the united state dollar, which is a global exchange currency perimeter, and the lingering negative impact on the economy and it impact the value of goods and services in the Nigeria internal microeconomic and the values of both currencies have led to a hike in the price of goods and services within Nigeria.

-A lot of efforts have been put in place to salvage the already worsening situation of the naira against the value of the dollar, in Nigeria, we have the official price of a dollar to naira according to CBN to be ₦460.54 vs $1 but we all know the fact that the central bank or any other commercial banks does not have the availability of this currency so it exchange is bearly minimum.

-So the only option is to source for alternatives sources to get the dollars and that brings you down to the black market, who's the CBN call currency speculators and perceived as the enemy of the revival of the value of the traditional currency,  at the black market, we all know how much the value is on Binance exchange as at this morning the value of $1=₦741.23 so that is a big difference from the government recorded price.

-so the question is, is it justifiable for the CBN to use anti-graft agencies such as the EFCC to arrest currency speculators/p2p Exchange?

-What is the rule of speculators in the outcome of the value of any asset a case study of the 9ja ₦ vs $.