Saturday, 13 February 2016

List of Other Oil Producing Nations with Falling Currencies Apart from Nigeria

Since the end of of 2014, the price of crude oil in the global market has been on a free fall, and so has our Naira. A lot of people have the misconception that it is only Nigeria that is suffering this issue of currency fall, which is really a problem of most oil producing nations the world over. Granted, Naira going from a Dollar for 200 Naira to a Dollar for 308 Naira conversation rate in less than a year is a bad economic sign for the country, but this has been foreseen by economists who always advised against dependent on one source of export. 70% of our foreign exchange comes from crude oil sale, so what do you expect when the price of that commodity keeps falling in the international market? It is not rocket science. Even the almighty Saudi Arabia is in fear for its currency right now with the continuing fall in oil prices.

"Jan 7...The Saudi Arabian riyal hit a record low against the dollar in the forwards market on Thursday as sliding oil prices caused some international banks and funds to bet the kingdom may eventually be pushed into devaluing its currency...The central bank, which serves as the kingdom's sovereign wealth fund, has been running down its foreign assets at an annual rate of over $100 billion to cover a huge state budget deficit as oil revenues shrink." (Article on )

A lot of people feel this continuous rise in Dollar price against the Naira is the present Government's fault and could be waved away if they performed some sort of magic. Even if the government were to face diversification 100% right now, we wouldn't still feel the positive impact for at least 3 years. The best thing is for the Government to look for a way to reduce import to the barest minimum, and encourage the purchase of Nigerian made goods by Nigerians. We have a population of over 180 million; imagine what this move would do to our economy in the long run.

Below is a list of oil producing countries who's currencies have also been affected negatively by this falling crude oil price.

Brazil's Real- 1 Dollar to 3.10 Real in March 2015- 1 Dollar to 4.06 Real in January 2016 (31% Dollar increase against the currency in 10 months)

Russia's Ruble- 1 Dollar to 60 Ruble in October 2015- 1 Dollar to 84 Ruble in January 2016 (40% Dollar increase against the currency in 3 months)

Kazakhstan Tenge- 1 Dollar to 180 Dollars in January 2015- 1 Dollar to 370 Tenge in January 2016 (105% Dollar increase against the currency in 2 months)

The worst was Venezuela's Bolivar, which went from a dollar to about 180 Bolivar in January 2015, to a Dollar to 800 Bolivar by September 2015. That's 344% Dollar increase against the currency in 8 months. Nigeria's Naira is around the 50% region. It is bad...but not the worst.

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