Wetin e mean to devalue currency
Wia dis foto come from, Getty Images
Di Central Bank of Nigeria (CBN) tok say dem no devalue di naira.
Dis dey come afta tori go viral say di CBN don devalue di kontri currency.
Local media, Daily Trust bin report say di apex bank don devalue di naira from N461 to N631 per US$1. Di report say CBN sell di dollar for dis new rate for di Importers and Exporters (I&E) window on Wednesday, 31 May.
According to di report, di devaluation dey come 48 hours afta President Bola Tinubu announce di plans of di Nigeria foment to unify di kontri exchange rate so dem go fit stimulate di economy.
However, di CBN for inside statement wey di Acting Director, Corporate Communication, Isa AbdulMumin sign say di tori na fake news and make Nigerians ignore am.
E clear am say “di exchange rate for di Investors and Exporters (I&E) window bin trade for dis morning (1 June, 2023) for N465 to US$1 and don dey stable around dis rate for a while now.”
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Wetin be Importer and Exporter window
Di Importers & Exporters foreign exchange (FX) window na di kontri official exchange rate window. Na di market trading segment for investors, exporters, and end-users wey dey allow FX trades dey available for di exchange rates wey dey based on di prevailing market circumstances.
Di Central Bank of Nigeria for 2017 bin announce one special window for investors, exporters and end-users wey dem call di “Investors & Exporters FX Window or the Window).
End of Di one wey oda users dey read well well
Di purpose of di window na to boost liquidity for di foreign exchange market and to ensure timely and settlement for eligible transactions.
Dis one mean say na di market forces go determine how foreign exchange go sell for di market.
Wetin e mean to devalue naira?
Wia dis foto come from, Getty Images
Devaluation simply mean wen one kontri officially decide to lower di value of dia currency within a fixed exchange rate system.
Dis go make di monetary authority formally set a new fixed rate wit respect to international market, wey be mainly dollar.
Devaluation of currency dey make currency lose im value. According to one study, one kontri fit decide to devalue dia currency to address trade imbalance.
Devaluation dey lower di price of a kontri exports to make dem dey more competitive on di international market, wey go in turn raise di prices of imports.
If products kontris dey import dey very expensive, domestic consumers no go fit afford dem, dis go in turn make dem patronise locally made products.
Kontris dey devalue dia currencies only wen dem no get oda way to correct past economic mistakes or wen dem face problems wey pass dia power.
Di reasons why a kontri fit choose to devalue her currency na to encourage exports; discourage imports; and correct balance of payment issues.
How devaluation of naira fit affect Nigerians
Wia dis foto come from, Getty Images
Economists and Policy makers believe say devaluation na one of di effective tools for improving di economy.
Dis na because devaluation dey expected to expand domestic production, promote exports and replace imports wey go in turn lead to di generation of more jobs. But dis no be so for Nigeria experience.
One financial analyst Alexta Wilcox wey follow BBC Pidgin tok say for proper economy wen a kontri devalue dia currency na to try make di currency dey more attractive.
Exports go become cheaper and di income wey di kontri get go be of higher value but no be so for Nigeria as things dey become more expensive wen authorities devalue di naira.
Oga Wilcox say di tori wey go viral dis morning say di apex bank don devalue di naira na bait wey go cause panic for di foreign exchange market.
E say wit dis news now, Nigerians go rush go buy di dollar wey go make am dey expensive to keep in di eventuality say CBN later devalue di currency.
E add say "Locally produced goods, agricultural products wey no suppose dey affected, dia prices go go up sake of dollar because our currency dey tied to di dollar and dealers go complain say naira don fall dat na why things cost.
"Di demand for dollar within Nigeria economy dey high as pipo dey use dollar trade, pipo dey use dollar pay for school fees, hotel reservation, hospital bills, among odas. Di woman wey dey sell akara, dey tok of dollar, dey sell garri, dey tok of dollar", oga Wilcox add.
E also complain say pipo wey get domiciliary account wit plenty dollars inside too much, say make goment peg di amount wey pipo fit keep for dia domiciliary account as dis go help di naira gain weight small.
Anoda economist, Kolawole Akinwale say devaluation of di naira go make goment spend more on importation.
“Dis go cause a lot of inflation. Di CBN need to step up on di monetary policy. Wetin I think say di CBN gatz do na to ensure say di currency of di kontri from wia dem dey import goods pay through di Form M – one important document wey all importers wey dey import goods come Nigeria gatz feel.
