The Nigerian currency, the Naira, has recently experienced a significant drop in value against the US dollar on the official market. On January 25th, it briefly fell to NGN1,398 per greenback, reaching a new record low. This depreciation brings the official exchange rate almost in line with the parallel market rate of NGN1,400:USD1.
Continued Depreciation
This latest decline in the value of the Naira is part of an ongoing trend that began after Bola Tinubu took over as Nigeria's president, succeeding Muhammadu Buhari, and removed former Central Bank of Nigeria (CBN) Governor Godwin Emefiele. Prior to this change, the CBN had maintained a fixed exchange rate for the Naira against the US dollar, with the rate set just below NGN500:USD1.
Since the new leadership at the CBN was appointed, the Naira has steadily depreciated against major currencies on both official and unofficial markets. Many experts in the Nigerian economy attribute this decline to a shortage of foreign exchange.
The Undervalued Naira
However, the current CBN governor, Olayemi Cardoso, has expressed a different perspective. He recently stated that the Naira is actually "undervalued" and efforts are being made to rectify this situation. Cardoso believes that, with coordinated measures on the fiscal side, the Naira's true value can be realized in the near term. This coordinated approach aims to achieve a more balanced and stable exchange rate.
According to a report in the Leadership, the CBN is planning to implement various measures to ensure that all foreign exchange inflows are returned to the central bank. These steps are expected to contribute to a more consistent and stable exchange rate.
Boosting Investor Confidence
Governor Cardoso hopes that the reforms being undertaken by the CBN will lead to a consistent and stable exchange rate. Such stability is crucial in boosting investor confidence and positioning Nigeria as an attractive destination for foreign direct investment.
What are your thoughts on the CBN governor's comments about the value of the Naira? Share your opinions in the comments section below.
Frequently Asked Questions
What are the pros & cons of a Gold IRA?
An excellent investment vehicle is a gold IRA. This is for people who wish to diversify but do not have access to traditional banking services. It allows you to invest freely in precious metals, such as gold, silver and platinum until they are withdrawn.
The downside is that early withdrawals will result in ordinary income taxes on earnings. These funds are not held in the country so creditors cannot seize them if you default on your loan.
If you are looking to own gold without worrying about taxes, a golden IRA could be for you.
What precious metals can you invest in for retirement?
Understanding what you have now saved and where you are currently saving money is the first step in retirement planning. If you don't know how much you currently have saved, start by taking an inventory of everything you own. This should include any savings accounts, stocks, bonds, mutual funds, certificates of deposit (CDs), life insurance policies, annuities, 401(k) plans, real estate investments, and other assets such as precious metals. Add all these items together to calculate how much money you have for investment.
If you are under 59 1/2 you should consider opening a Roth IRA Account. While a Roth IRA does not allow you to deduct contributions from taxable income, a traditional IRA allows for that. However, you will not be able take tax deductions on future earnings.
If you decide you need more money, you will likely need to open another investment account. Start with a regular broker account.
Which is more powerful: sterling silver or 14k gold?
Although gold and silver can be strong metals, sterling silver is far less expensive as it contains 92% silver instead of 24%.
Sterling silver is also called fine silver. It is made from a combination silver and other metals, such as zinc and copper.
Gold is considered very strong. It takes a lot of pressure to break it down. If you dropped an object onto a piece or gold, it would break into thousands instead of two halves.
However, silver isn't as strong and durable as gold. If you dropped an item onto silver sheets, it would likely fold and bend without cracking.
It is commonly used in coins and jewelry. Therefore, its value tends to fluctuate based on supply and demand.
How does gold and silver IRA work?
You can invest in precious metals like gold and silver without having to pay taxes. This makes them an attractive investment for people who want to diversify their portfolios.
You do not have to pay income tax on interest earned from these accounts if you are over 59 1/2. You also do not have to pay capital gains tax on any appreciation in the account's value. This account has a limit on how much you can put in. The minimum amount permitted is $10,000 If you're under the age of 59 1/2, investing is not allowed. Maximum annual contribution: $5,500
Your beneficiaries could receive less if you die before your retirement. After all expenses have been paid, your estate must contain enough assets to cover any remaining balance in your account.
Some banks offer IRA options in gold and silver, while some require you to open a regular brokerage accounts through which you can purchase shares or certificates.
Statistics
- Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- Silver must be 99.9% pure • (forbes.com)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
External Links
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
takemetothesite.com
kitco.com
en.wikipedia.org
How To
How to start buying silver with your IRA
How to start buying silver with your IRA – The best way to invest in gold and silver is through direct ownership of physical bullion. Silver coins and bars are the most popular form of investment because they offer diversification, liquidity, and convenience.However, many prefer owning physical bullion over paper certificates or electronic currency.
If you want to buy precious metals like gold and silver, several options are available. You can purchase them directly through their producers, which include mining companies or refiners. If you don't want the hassle of dealing with a producer directly, you can purchase them from a dealer that buys and trades bullion products.
This article will explain how to invest in silver with an IRA.
- Investing Directly in Gold & Silver – This is the first way to get precious metals directly from their source. This involves getting the bullion and having it delivered to your doorstep. Some investors keep their bullion at home, while others store it in a secure storage unit. When you hold onto your precious metal, ensure you're storing it properly. Many storage facilities offer insurance against fire, theft and damage. But, even with insurance, you can lose your investments because of natural disasters and human error. For these reasons, storing your precious metals in a safe deposit box at a bank or credit union is always recommended.
- Buy Precious Metals Online: If you don't want to carry around heavy boxes full of precious metals, there are other options. Bullion dealers sell bullion online in many forms, including coins or bars. Coins come in different sizes, shapes, and designs. Coins are generally easier to transport than bars and more affordable. Bars come in a variety of sizes and weights. Some bars weigh hundreds of pounds, while others only weigh a few ounces. When choosing which bar to buy, it is important to consider what you will use it for. If you plan on giving it as gifts, you might choose something smaller. It might not be the best choice if you're looking to add it in your collection or display it proudly.
- Buy Precious Metals from Dealers – Another option is to purchase bullion directly from a dealer. Most dealers are experts in one part of the market: gold or silver. Some dealers specialize in particular types of bullion like rounds or minted currency. Others are specialists in specific regions. Others are specialists in bulk purchases. No matter what dealer you choose you will find that they offer great prices and flexible payment options.
- Purchase Precious Metals via Retirement Accounts – Although this is technically not an investment, it can be used as a way to increase exposure to precious materials. Investments in precious metals must be made through a qualified retirement plan to receive tax benefits as per Section 219 of IRS Code. These include IRAs, 401(k)s, and 403(b) plans. These accounts offer higher returns because they are created to help you plan for retirement. These accounts also allow you to diversify across multiple metals. What is the drawback? The drawback? These accounts can only, however, be accessed by those who work for an employer that sponsors them.
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