• Home
  • About
  • Blog
  • Advertise
  • Contact
No Result
View All Result
Ideasgist
NEWSLETTER
Advert for @ideasbeams
  • Home
  • MediaHot
  • TechnologyNew
  • Education
    • School
    • Jamb
    • University
    • Polytechnic
    • College of Education
  • Sport
    • Football
  • NewsTrending
    • Politics
    • Local
    • World
  • Entertainment
    • Celebrities
    • Media
  • Lifestyle
    • Fashion
    • Health
    • Relationship
  • More Topics
    • Business
    • Banking
    • Telecom
    • Job
  • Home
  • MediaHot
  • TechnologyNew
  • Education
    • School
    • Jamb
    • University
    • Polytechnic
    • College of Education
  • Sport
    • Football
  • NewsTrending
    • Politics
    • Local
    • World
  • Entertainment
    • Celebrities
    • Media
  • Lifestyle
    • Fashion
    • Health
    • Relationship
  • More Topics
    • Business
    • Banking
    • Telecom
    • Job
No Result
View All Result
Ideasgist
No Result
View All Result
  • Home
  • Media
  • Technology
  • Education
  • Sport
  • News
  • Entertainment
  • Lifestyle
  • More Topics
Ideasgist Advert Ideasgist Advert Ideasgist Advert
ADVERTISEMENT
Home Business

Aboki FX: How Speculators Attack, Affect Naira Value —CBN Ex-Deputy Gov Moghalu

by Oluwaseyi Olaniyi
September 18, 2021
in Business
Reading Time: 3 mins read
A A
Aboki FX: How Speculators Attack, Affect Naira Value —CBN Ex-Deputy Gov Moghalu

Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria, has said that currency speculators attack and affect the value of the naira.

Moghalu, who was a deputy governor at the apex bank from 2009 to 2014, made this known in a thread posted on his Twitter handle on Saturday.

He made the comments just hours after the CBN Governor, Godwin Emefiele, on Friday, said that the Federal Government would track the owner of Aboki FX, an online platform that gathers and displays parallel market rates in Nigeria, and stop the operations of the website in the country.

The apex bank governor had also accused the owner of the website, a London-based Nigerian, Oniwinde Adedotun, of “speculative activities on the naira”, adding that he has to explain how he obtains his rates.

AlsoRead:

Elon Musk Makes Aliko Dangote’s Net Worth In One Day, As Nigerian Billionaire Loses N105.33bn

CBN To Introduce USSD Code To Boost eNaira

Russian Owned Renaissance Capital Denies It Is Shutting Down Operations In Nigeria

This is based on the rate of the rise of the naira on the parallel market which is currently trading at N570/dollar.

Following the complaints by the CBN governor, Aboxi FX said on Friday that it would no longer provide daily updates on foreign exchange rates for now and hoped that the naira would stabilise.

Commenting on the FX crisis in the country in a Twitter thread, Moghalu listed factors that affect the value of the Naira to include “supply and demand (if too much Naira is chasing scarce dollars, the dollar gets stronger relative to the Naira, and vice versa).

“Others are inflation (a high inflation economy such as Nigeria’s weakens the value of the legal tender), high government indebtedness ( again, our case especially relative to our revenues and ability to pay which will be stretched the more we borrow on poor revenues, and 90 kobo out of every N1 goes to debt servicing).”

Though Moghalu did not mention Aboki FX, he said, “Speculation also affects the naira value, as there are currency traders around the world for whom the weakness of a currency is their very good fortune. Such traders “attack” such currencies for profit, especially where the currency is using a fixed, official exchange rate determined by the central bank instead of the market.

“As the Naira is effectively pegged officially to a “reserve” currency (dollars, euros, pound sterling), speculators can attack such a currency for profit if the country (Nigeria in this case) is perceived to have insufficient foreign reserves to meet demand. Because our inflation rates at 17% are way higher than those “reserve-currency” countries, again we are exposed to possible currency attacks.

“If reserves are weak, and demand for dollars massively outstrips supply, currency devaluation is inevitable, and currency traders who mount speculative attacks profit from this devaluation.

“Such traders will borrow the Naira from Nigerian banks, convert it to, say, dollars, then buy short-interest paying Nigerian bonds. If, as the speculators anticipate, the central bank devalues the naira, the traders sell the bonds in the foreign currency, convert them into naira, and repay their original loan.

“The steeper the devaluation the higher the speculator’s profit. What should we do about all of this? As I have said before, and say again, we have two options. One is to let the Naira find its level in the market. In order, words, subsidizing the currency.

“While there will likely be an immediate spike in the price of the dollar, this move will have two advantages. The first is that, because Nigeria has a big, profitable economy and market, dollars will likely swamp the market seeking profits for investors.

“When this happens, the laws of demand and supply will work in favour of the Naira. Alongside this, maintaining different exchange rates for different kinds of transactions must end. This is called rate convergence.”

The former presidential candidate of the Young Progressive Party in the 2019 election also said that one of the best ways to strengthen the naira is to make the “right trade policies to support and create such incentives for massive exports of finished, value-added goods from Nigeria”.


Like us on Facebook. Follow us Twitter and Instagram. Subscribe to our YouTube Channel. Join our WhatsApp Group and Telegram Channel. Read more on Latest News, Tech News, Media and lot more.

SUBSCRIBE TO OUR NEWSLETTER





Tags: Aboki FxcbnKingsley Moghalunaira
ShareTweetSendShare
Plugin Install : Subscribe Push Notification need OneSignal plugin to be installed.
ADVERTISEMENT
Previous Post

“I know I’m Not Without Mistakes”- Tuface Idibia Apologizes To Wife, Annie Idibia As He Celebrates Birthday

Next Post

JSS Entry Age Limit: Lagos Debunks Viral Report On Social Media

Oluwaseyi Olaniyi

Oluwaseyi Olaniyi

Related Posts

World Bank Say CBN’s Policies Continues To Damage Nigeria’s Business Environment
News

World Bank Say CBN’s Policies Continues To Damage Nigeria’s Business Environment

June 20, 2022
CBN Launches eNaira Website
Business

CBN To Introduce USSD Code To Boost eNaira

June 11, 2022
Report Banks Hoarding Forex, CBN Tells Nigerians
Banking

New CBN Policy Offload Risks And Liabilities Of Transaction On Customers

June 4, 2022
CBN Raises Online Transfer Limit To N25 Million And N250million For Individuals And Companies Respectively
Banking

CBN Raises Online Transfer Limit To N25 Million And N250million For Individuals And Companies Respectively

June 3, 2022
Naira Tumbles To N435/$1 At Official Market As CBN Adjusts Forex Rate
Business

Naira Falls To N609/$1 At Black Market As Forex Liquidity remains Low

May 26, 2022
Presidential Bid: INEC, CBN Partnership Under Threat Over Emefiele’s APC Membership
News

Presidential Bid: INEC, CBN Partnership Under Threat Over Emefiele’s APC Membership

May 10, 2022
Load More
Next Post
JSS Entry Age Limit: Lagos Debunks Viral Report On Social Media

JSS Entry Age Limit: Lagos Debunks Viral Report On Social Media

Please login to join discussion
  • Trending
  • Comments
  • Latest
Gionee G13 Pro Price In Nigeria, Full Speculation

Gionee G13 Pro Price In Nigeria, Full Speculation

February 4, 2022
Lagos State University of Science and Technology (LASUSTECH) Takeoff Courses 2022/2023

Lagos State University of Science and Technology (LASUSTECH) Takeoff Courses 2022/2023

August 4, 2022
LAUTECH Denied Lady In Viral Sex Video As She Admits Being A Sex Worker

LAUTECH Denied Lady In Viral Sex Video As She Admits Being A Sex Worker

February 5, 2021
Police Give Update On Reports That Girl Captured In Viral S#x Video With Dog Died Of Infection

Police Give Update On Reports That Girl Captured In Viral S#x Video With Dog Died Of Infection

May 14, 2022

Certificate for Megarich Consult and Network Entrepreneurship Program is Ready

May 18, 2018
Tiwa Savage Lookalike Kash Doll Is The One On The Viral S*x Tape Not Tiwa Savage

Tiwa Savage Lookalike Kash Doll Is The One On The Viral S*x Tape Not Tiwa Savage

October 13, 2021
Poly Ibadan: How To Check Your Matriculation Number

Poly Ibadan: How To Check Your Matriculation Number

May 3, 2019 - Updated on May 25, 2021

#BBNaija 2020: Erica And Kiddwaya Make Out Few Hours After Laycon Expressed His Feelings For Her (Watch Video)

August 3, 2020

Ololufe by Wally G Konkolo (Mp3 Download)

February 9, 2020

How To Check Acceptance Fee Payment Not Reflecting On Your Portal

November 22, 2018
Lagos State University of Science and Technology (LASUSTECH) Takeoff Courses 2022/2023

Lagos State University of Science and Technology (LASUSTECH) Takeoff Courses 2022/2023

August 4, 2022
Big Brother Naija Season 7

Big Brother Naija 2022 Season 7

July 28, 2022
9 Tips To Step Up Your Forex Trading Game

9 Tips To Step Up Your Forex Trading Game

July 2, 2022
Konga raises alarm over scammers using its brand to defraud people

Konga raises alarm over scammers using its brand to defraud people

July 2, 2022
Nigeria, Portugal sign multiple MoUs to increase cooperation, diplomacy, research, others

Nigeria, Portugal sign multiple MoUs to increase cooperation, diplomacy, research, others

July 2, 2022
JJC Skillz Announces Separation With Actress Funke Akindele

JJC Skillz Announces Separation With Actress Funke Akindele

June 30, 2022
iPhone 14 Max vs Galaxy S22+: Spec Comparison, An Even Battle

iPhone 14 Max vs Galaxy S22+: Spec Comparison, An Even Battle

June 29, 2022
WhatsApp Delays Privacy Changes After Backlash

WhatsApp Working On Letting You Choose An Avatar For Video Calls, Send Avatars As Stickers, And More

June 29, 2022
Sony Set To Debut 1” Camera Sensor With The Launch of The Xiaomi 12S Ultra

Sony Set To Debut 1” Camera Sensor With The Launch of The Xiaomi 12S Ultra

June 29, 2022
TikTok App To Help Users Curb Addiction

U.S Wants TikTok Removed From Apple, Google App Stores Over Data Concerns

June 29, 2022
Facebook Instagram Twitter Youtube TikTok Telegram

An online media website for latest news and updates in Technology, Business, Education, Sports, Politics, Entertainment, Health, Fashion...and many more.

About

  • Advertise
  • Contact
  • Newsletter

Quick Links

  • Privacy
  • Terms of Use
  • DMCA

2021 Ideasgist ™ | All rights reserved.
A trademarks of Ideasbeams Int'l.

No Result
View All Result
  • Home
  • Media
  • Technology
  • Education
    • School
    • Jamb
    • University
    • Polytechnic
    • College of Education
  • Sport
    • Football
  • News
    • Politics
    • Local
    • World
  • Entertainment
    • Celebrities
    • Media
  • Lifestyle
    • Fashion
    • Health
    • Relationship
  • More Topics
    • Business
    • Banking
    • Telecom
    • Job

2021 Ideasgist ™ | All rights reserved.
A trademarks of Ideasbeams Int'l.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?