‘Your greatness is limited ONLY by the investments you make in yourself.’ – Grant Cardone
As the year 2020 draws to a close, most people around the world would like to return to normal operations, that is, go about their business or go to work, travel on holiday, have children in school physically, and just to be able to go out in the evenings without worrying about catching the virus. With Christmas approaching, people are trying to be in high spirits with the usual shopping and family visits but that has its costs. Cases of infections are on the rise again as economies opened up in the past months.
There is good news with the possibility of a couple of vaccines that are effective against the corona virus. And this information alone makes a difference, as it means people can take the vaccine and be safe from the effects and possible death arising from getting the virus.
Based on this information, there is an ‘expectation’ that once the vaccine is available to people, then life can return to normal. This expectation for life to return to normal has led to an increase in the price of crude oil. But note that the price of crude oil rising is not as a result of actual demand for the product. Remember that, many countries are still on partial lock down and so they do not need as much crude oil. So the actual
In Nigeria today, a dollar ($1) is sold above N500 in the parallel market. The CBN recently devalued the Naira from N384 to N392. You may wonder why the Naira is being devalued especially when you read that crude oil price is rising. This is because, the price of crude oil at the moment is a potential price, until an actual sale of the crude oil at this prices, that is when Nigeria can earn dollars and save more dollars to be able to maintain the value of the Naira.
But since this is not happening yet, the CBN keeps selling the dollars it has, but the dollars being sold is not enough as their are more people in need (demanding) for the dollars to pay for school fees, medical and also to import products. Therefore, with more people in need of this scarce dollars, people are prepared to pay more for it and the rising price of the dollar continues.
The tide could turn in favour of Nigeria but for now, until demand for crude oil becomes a reality post a successful covid-19 vaccine program, the Naira may continue to be under threat of devaluation with rising exchange rate to the Dollar.
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