Call this the JP Morgan effect: “Naira has returned to its old ways at the parallel market, trading late Tuesday at N900/$1 after a show of recovery that saw it rose to N840/$1 last week.” Yes, when the big bank opened the veil that Nigeria may just have $3.7 billion in its reserve, instead of the $37 billion we had all thought, Naira lost steam on its accelerating energy via the $3 billion loan facilitated by NNPC* with Afreximbank.
At the beginning of Tuesday, the exchange rates hovered around N865-N870/$1; however, the subsequent decline later in the evening indicates a swift surge in demand due to ongoing supply difficulties.
The fluctuation underscores the volatility of Nigeria’s FX market, despite efforts by President Bola Tinubu-led administration to tame the tide of naira’s poor performance.
Honestly, I had expected the government to put a statement after that report. But when it did not after 12 hours, the market priced on its possibility. Of course, how do you expect the government to respond when it may not even have the data since most of these deals were orchestrated in ways that you could call them financial illusions?
Nigeria’s bad – Net FX reserves are “significantly lower” than previously estimated, according to a recent analysis by JPMorgan. The American multinational financial firm said the new information is based on partial information from the audited financial accounts of the Central Bank of Nigeria.
“We estimate that CBN’s net FX reserves were around US$3.7bn at the end of last year, from US$14.0bn at end-2021,” JPMorgan said.
In other words, the government will rely on the American banks to tell it what happened because We The People have no clues. That is why no one could challenge JP Morgan on that revelation. Unfortunately, Naira will pay the price and we may need to return to Afreximbank again!
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Fellow Citizens, we pray in Nigeria well well. Just hope, no one has used Nigeria to collect some bitcoins which may not be traceable. That is why we need to ask all the global crypto exchanges to know if we did some crude oil swaps for cryptos. You never know!!!
Nigerian ruling class has never catered for the people. It has always been what’s in it for me (transactional politics). Nothing changes until the people demand accountability on their own terms. Watch what they do and not what they say. More revelations are in the offing –
— Chukwunedum Ekwenibe (@MiriEnweIlo) August 23, 2023
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