Friday, April 07, 2017 8:23 AM / FDC
A strong naira is not synonymous with a strong economy. The naira has gained 25% since February 2017 on the back of 12 interventions of a total of $2.27bn. The questions on the lips of Nigerians are:
-Is this for real?!
-Is it sustainable?!
-And what next?!
Simple economics tells us that, without a change in the market structure, gains in the exchange rate are likely to be temporary and transient. Surges in supply with no policy shift will only entrench multiple exchange rates and encourage arbitrage.
The CBN is increasing forex supply with good intentions, but as they say “the road to hell is paved with good intentions”. Whilst Nigerians ponder on how much the naira will gain, we see the CBN trying to catch a falling knife without sustaining any wounds.
In this edition of the LBS Breakfast Club, Bismarck Rewane and the FDC Think Tank explains the economics of exchange rates and the impact of a strong naira on sectors of the economy and your business.
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1. Economic Reform by Coincidence - Does It Really Matter? - LBS EBS – March 2017
2. Nigeria's Economic Reform - Resist Now and Regret Later - LBS EBS - Feb 2017
3. 2017: A Year of Fear Laced with Hope
4. Running Faster to Stand Still – LBS EBS – Dec 2016
5. Recovery Fades, Strong Regulator versus Efficient Markets – LBS EBS Nov 2016
6. Nigeria Oil Shock 2.0 and the Treacherous Path to Recovery – LBS EBS Oct’16
7. Recession: how deep and for how long? – LBS EBS Sep’16
8. Policy Daunting, Markets Uncertain, Citizens Groan – LBS EBS – Aug 2016
9. With Inflation at 16.5%,Nigeria Stumbles into the Reform Path-LBS EBS Jul 2016
10. Sell in May and Go Away - LBS EBS - May 2016
11. The Squandering of a Golden Economic Opportunity – LBS EBS Apr 2016
12. Naira Weakness Undermines Economic Stability – LBS EBS – March 2016
13. 2016: The Year of Stark Economic Reality – LBS EBS – Feb 2016
14. 2016 - A Year of Growth and Commodity Turmoil – LBS EBS – Dec 2015
15. Fantasy economics & the value of the Naira – LBS EBS – Nov 2015
16. All the Presidents’ Men - Dream team or Lightweights – LBS EBS – Oct 2015
17. Loot Recovery? Restitution is no Retribution - LBS EBS – Sep 2015
18. Nigeria goes back to the Future : Market vs. Control Economy - LBS EBS - Aug 2015
19. Buhari: Slow Start or Guessing Game – LBS EBS – July 2015
20. Reflating a Strangulating Economy – LBS EBS – Jun 2015
21. Leadership Change is not a System Change – LBS EBS April 2015
22. Is the Naira Ever Going to Recover? – LBS EBS – March 2015
23. Nigeria at Crossroads- Stability or Change, Which do You Prefer? -LBS EBS – Feb 2015
24. The Falling Naira: Are you Prepared? - LBS EBS- Jan 2015
25. Octobers can be eventful - LBS EBS – Nov 2014
26. Inflation Up, Stock Market Down, What Next? - LBS EBS Sep 2014
27. MUMU-NOMIKS vs. Economics – LBS EBS – Jun 2014