Wednesday, 30 December 2015

How Buhari Can Achieve N1 To $1


Nonetheless, in the light of PMB’s exemplary integrity rating, it is unlikely that he deliberately set out to deceive Nigerians, when he promised to “ensure that the Naira was equal to the dollar in value if he was voted into office”. Instructively, however, so long as the market dynamics of eternally surplus Naira and auctions of dollar rations subsists, it would be hopeless to expect that the Naira slide will be reversed .

Conversely, if the CBN does not devise other means for instigating excess Naira liquidity in the money market, the adoption of dollar warrants for allocations of dollar denominated incomes will steadily bring down the dollar rate below N100=$1 before December 2016.

Indeed, if the Naira appreciates to N100=$1, it would also become advisable to redefine the Naira profile by redecimalizing the domestic currency with two decimal points so that N100 becomes N1. Thus, a new currency profile with more valuable primary kobo coin denominations will become available to promote competitive pricing of goods and services.

In addition, if N1=$1, the highest Naira denomination would be N50 note which would be the equivalent of $50 rather than the current N1,000=$5 with the attendant problems of hygiene, and portability which discourage public acceptance, particularly for lower denomination notes and the unwieldy primary coins which have abysmally infinitesimal values.
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