Experts in Nigerian economy say that the five-year-old agreement between Nigeria and China on currency swaps has not helped to ease the pressure on the Nigerian currency. According to an expert, the large trade deficit between Nigeria and China is holding back the implementation of the currency swap agreement.
Reduce the pressure on the Naira
Experts on Nigerian economics say that the five-year-old currency exchange agreement between Nigeria and China has not been able to reduce the pressure on the Nigerian naira. The agreement, signed between the Central Bank of Nigeria and the People's Bank of China, was intended to ease pressure on Nigeria's reserves and ensure stability of foreign exchange.
Since the signing of the swap agreement in 2018, however, the Nigerian currency depreciated against the dollar. From N305:$1 to N460:$1 by the first week in April 2023. The exchange rate for the Nigerian currency against the yuan fell from N48:CNY1 in 2018 to N66.70 CNY1 on 6 April 2023. The naira/dollar rate was reported to be over N730 per $1 on the parallel foreign exchange market. This is a major source of greenbacks for Nigerian individuals and businesses.
The failure of the currency exchange arrangement came as several countries were attempting to or have established similar arrangements with China.
Taiwo Oyedele of PWC Nigeria's tax and corporate advisory service pointed out that the trade imbalance between China and Nigeria is the reason why the currency exchange arrangement seems to be failing to stop the naira from declining.
"The implementation of the agreement has been difficult so far due to the imbalance in trade between Nigeria and China. "We import so much from China but we export less, and this has actually been declining, in addition to relative instability of the value in the naira," Oyedele said.
Oyedele believes that Nigeria can remedy the situation by substituting locally produced products for imports or promoting them.
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Frequently Asked Questions
Should You Open a Precious Metal IRA?
The most important thing you should know before opening an IRA account is that precious metals are not covered by insurance. If you lose money in your investment, nothing can be done to recover it. This includes losing all your investments due to theft, fire, flood, etc.
Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These items have been around for thousands of years and represent real value that cannot be lost. You would probably get more if you sold them today than you paid when they were first created.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. You should also consider using a third party custodian to protect your assets and give you access at any time.
If you decide to open an account, remember that you won't see any returns until after you retire. Do not forget about the future!
Should You Invest in Gold for Retirement?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. You can invest in both options if you aren't sure which option is best for you.
In addition to being a safe investment, gold also offers potential returns. Retirees will find it an attractive investment.
Although most investments promise a fixed rate of return, gold is more volatile than others. Therefore, its value is subject to change over time.
This does not mean you shouldn’t invest in gold. It is important to consider the fluctuations when planning your portfolio.
Another benefit to gold is its tangible value. Unlike stocks and bonds, gold is easier to store. It can be easily transported.
Your gold will always be accessible as long you keep it in a safe place. There are no storage charges for holding physical gold.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
You'll also benefit from having a portion of your savings invested in something that isn't going down in value. Gold usually rises when the stock market falls.
Investing in gold has another advantage: you can sell it anytime you want. Like stocks, you can sell your position anytime you need cash. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
Also, don't buy too much at once. Start small, buying only a few ounces. You can add more as you need.
Don't expect to be rich overnight. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
Although gold might not be the right investment for everyone it could make a great addition in any retirement plan.
Are gold investments a good idea for an IRA?
For anyone who wants to save some money, gold can be a good investment. It is also an excellent way to diversify you portfolio. But gold is not all that it seems.
It's been used as a form of payment throughout history. It is often called “the oldest currency in the world.”
But gold is mined from the earth, unlike paper currencies that governments create. It's hard to find and very rare, making it extremely valuable.
The supply and demand for gold determine the price of gold. If the economy is strong, people will spend more money which means less people can mine gold. Gold's value rises as a result.
The flip side is that people tend to save money when the economy slows. This increases the production of gold, which in turn drives down its value.
This is why gold investment makes sense for both individuals and businesses. If you invest in gold, you'll benefit whenever the economy grows.
You'll also earn interest on your investments, which helps you grow your wealth. If gold's value falls, you don't have to lose any of your investments.
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
The best place to buy silver or gold online
Before you can buy gold, it is important to understand its workings. Gold is a precious metallic similar to Platinum. It is rare and used as money due to its durability and resistance against corrosion. It's hard to use, so most people prefer buying jewelry made out of it to actual bars of gold.
There are two types of gold coins available today – one type is legal tender, while the other is called bullion. Legal tender coins can be used for circulation within a country. These coins usually come in denominations such $1, $5 and $10.
Bullion coins can only be used as investment currency. They increase in value due to inflation.
They cannot be used in currency exchanges. For example, if a person buys $100 worth of gold, he/she gets 100 grams of gold with a value of $100. For every dollar spent, the buyer gets 1 gram of Gold.
When looking to buy precious metals, the next thing you should be aware of is where it can be purchased. There are a few options if you wish to buy gold directly from a dealer. You can start by visiting your local coin shop. You can also try going through a reputable website like eBay. You may also be interested in buying gold through private sellers online.
Individuals selling gold at wholesale prices and retail prices are known as private sellers. You pay a commission fee between 10% and 15% for each transaction when you sell gold through private sellers. You would receive less money from a private buyer than you would from a coin store or eBay. This option is often a great choice for investing gold as it allows you more control over its price.
The other option is to purchase physical gold. While physical gold is easier than paper certificates to store, you still need to make sure it is safe. Physical gold must be kept safe in an impassible container, such as a vault.
When buying gold on your own, you can visit a bank or a pawnshop. A bank can give you a loan up to the amount you intend to invest in Gold. Small establishments that allow customers to borrow money for items they have brought are called pawnshops. Banks often charge higher interest rates then pawnshops.
Another way to purchase gold is to ask another person to do it. Selling gold is simple too. Contact a company such as GoldMoney.com, and you can set up a simple account and start receiving payments immediately.
By: Terence Zimwara
Title: Report: Nigeria-China Currency Swap Agreement Fails to Ease Pressure on the Naira
Sourced From: news.bitcoin.com/report-nigeria-china-currency-swap-agreement-fails-to-ease-pressure-on-the-naira/
Published Date: Sun, 16 Apr 2023 09:30:49 +0000