I have something to say about why the naira is getting really devalued against the dollar!
I’ll make it short.
Understand firstly that some of us who earns in dollars have long been doing so. Taking myself as a case study, I earned my first dollar in 2014.
And as at then, $1 was around N160 or less, and since then moving forward, myself and several others have been earning in dollars.
Why?
We didn’t chose to, the industry we play in pays in dollars, Google Adsense and several blogging publishers accounts pays in dollars— the white man’s currency.
Whether $1 = 1Naira, we will still continue to do blogging, because that’s our industry and what we’ve mastered.
Why am I saying this?
It’s because, most people think a few of us are capitalizing on the economic situation to earn in dollars and for that reason we are the cause.
No, we are not.
Myself and several others have been trading Crypto since 2018, irrespective of the dollar price against the naira, we’ll continue to do that.
Now, what’s the root cause of devaluation of the Naira? 👇
⚠️ information, examples shared are from public opinions and insider information posted acrosss various blogs
*BDC – Bureau de change (money exchangers/Aboki)
*BTA/PTA – Business/Personal Travel Allowance
1. Imagine a Bank Managing Director, is given $1m to pay bank users. He takes these monies through proxies exchanging it with BDCs and literally printing more money for himself and team from nothing.
2. A non-existent contract is awarded to someone, and issued in dollars, say $10m worth of contracts, right there it’s being given to this contractor at lower CBN rate say 800/$ immediately this money lands in the contractors account he can simply sell to BDC at N1600. Printing more money for himself and team.
3. Imagine an oil magnate, goes to the bank and request USD for a delivery of a “non-existent vessel”, he buys the USD at lower CBN rates, takes it away and sell at much higher rates to BDC— makes even more money than an actual oil sale.
4. Business people or even young students, goes to the bank to apply for BTA/PTA which mostly are non existent, collects these money at lower CBN rates and takes it over to BDC to sell at much higher rates.
5. Politicians lóóts the treasury and always takes it offshore in “Dollars” further devaluing the naira.
6. Imports, commerce and foreign procurements happens with dollars— hence the source for these dollars and scarcity it creates.
7. Health emergency abroad, travel and tourism and even schooling are facilitated by dollars further making the demand of dollars be on the high side.
The above are just a few examples!
So, channel your frústrations to the right places, people who earns and brings dollars back to this economy deserves applause!
Reason why GTB at some point pays you N5 for every dollar you receive to your dorm account.
These dollars are quickly being mopped up and used abroad, while selected fews that lóöts the economy then hoards dollars for appreciation instead of the naira.
The value of anything is driven high by demand, and when the supply is limited the value is driven even higher, and the lower our currency the less likely other countries and brands will accept it for commerce and trades.
As of writing this, $1 is ₦1,725
Could Crypto Speculators Affect Naira Evaluations?
Yes, it can and for a fact be speculative enough to send the Naira to as high as any value against the dollar.
I will explain.
⚠️ This is for educational purposes only.⚠️
Understand that, this has to do with P2P or any P2P platform of any sort.
What you see on the BUY side are “Sell Orders or Advertisements” placed by vendors, and what you see on the SELL side are “Buy Orders or Advertisements” placed by vendors.
Still don’t understand? read along.
Now the major thing happens on “Buy side of the Vendor” i.e what you see on the Sell Orders.
An advertiser/vendor can advertise that he wants to Buy your dollars (USDT) at the rate of 1800/$ meanwhile the average rate in the market is 1400/$ all he has to do is place an advert and it will show on the list, at the top of Sell Order page (because his price is the highest).
A further trick is, he increases the limit for you to sell to as high as N10,000,000 or even N5,000,000 meaning average Nigerians cannot even sell up to that amount of USDT easily.
While all these are happening his ads will continue to remain at the top, even if people try to sell to him at such a price of N1800/$ all he has to do is cancel the orders and he will continue to remain at top.
Now, that top of N1,800 becomes new knowledge, and just anyone can say oh my $ is worth around N1,800, even local BDC can say oh dollar is worth around N1,800
What BDC would do is, they will sell to you at N1,800 but for them to buy from you, they’d never buy at N1,800 but it’s N1,400 they know is the true rate.
Will people Online buy around N1800?
why not, they;ll, most of them don’t understand, they don’t know the true worth, they’ll surely buy.
Now the big question is?
If the actual rate is N1,400 and online platforms could trade it easily way higher and as time goes, the actually rates still continue to rise? from 1,400, 1,450, 1,500 etc.
Here’s are Two reasons the actual rates must rise along:
1. Scarcity: When the actual rate can’t service demand, they will resort to increase their rate to make profit since they are running low on what they have.
2. Avoid round tripping or what they call Lazy Susans. Well, this isn’t very easy. Now imagine actual rate remains at N1,400 while online platform N1800, this means, one way or the other people can buy cheaper and come to sell online higher, rinse and repeat.
Now to avoid this, and reduce the gap, obviously, the actual rate has to increase to match up to reality.
My last post clearly stated the root cause, and blocking P2P (Peer to Peer) platforms isn’t the solution because Peer to peer will continue to exist forever as long as there’s scarcity and the government blocks people from buying crypto with their cards.
Yes, P2P started because of Government blocking crypto purchase with cards, it’s like telling people not to spend their money, before you know it, those who have salt will meet those with pepper and do exchange and life goes on.
So P2P will always exists, if worse come to worse, it will move to decentralized systems, it will move to telegram, bots and various social platforms.
And the price of dollar will always increase as long as there’s demand for it and if banks cannot keep up with providing dollars to individuals with health emergencies, travel and tourism, schooling, commerce and trades etc– surely they’ll have to source it elsewhere and its gonna be the BDC who will slam outrageous prices on it and you must buy because you need it.
