Talking Economics and Politics

    Photo Credit: CFI I understand that every concerned Nigerian right now would find the rate at which the Naira is exchanged for major currencies (USD, GBP, EUR, etc) to be a nightmare. The Naira has traded poorly against these currencies at both the official forex window that is managed or fixed by the Central Bank of Nigeria (CBN), and the parallel (black) market in the past days, but with the recent upsurge in exchange rate, it has become even more dreadful, despite interventions from the CBN. One of the key drivers of stability for a country's currency is the amount it has in its vault as foreign reserve. Although, data provided by the CBN showed that the external reserve closed at $39.16 billion in June 2022, which is an addition of approximately 6 billion from $33.32 billion as of June 2021(year-on-year). However, this has not in the slightest way helped to keep the Naira stable, as investors' sentiments and expectations of the Nigerian economy are stronger forces to d...

Photo Source: SDPB Radio I am sometimes appalled by the decisions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) which consists of the Bank's governor (at the moment, Godwin Emefiele), his deputies, and other appointed members, with regards to the Monetary Policy Rate (MPR). I agree to a limited extent that inflation has its linked to money supply, but not in all instances, as there are varying sources of inflation, and taking a critical evaluation of the perculiarity of a country's situation should inform any policy choice. Last week, the CBN's MPC increased the short-term interest rate by a 100 basis point as a response to the continuous increase in inflation, which in my opinion, such response is nothing but a deflection. Recall that two months ago, the CBN increased MPR by 150 basis points from 11.5% to 13% when inflation was 17.71%. One would have thought that such increase would yield results by addressing the inflation crisis that we were...