![]() Since 1971, all links to gold have been repealed. From 1934, its equivalence to gold was revised to $35 per troy ounce. The Gold Standard Act of 1900 linked the dollar solely to gold. dollar was originally defined under a bimetallic standard of 371.25 grains fine silver or, from 1837, 23.22 grains fine gold, or $20.67 per troy ounce. The monetary policy of the United States is conducted by the Federal Reserve System, which acts as the nation's central bank. banknotes are issued in the form of Federal Reserve Notes, popularly called greenbacks due to their predominantly green color. dollar at par with the Spanish silver dollar, divided it into 100 cents, and authorized the minting of coins denominated in dollars and cents. The Coinage Act of 1792 introduced the U.S. “It’s evident that a lot of currency substitution is going on as many people now see the greenback as a better store of value,” Uwaleke said. The United States dollar is the official currency of the United States and several other countries. ![]() The dollar is seen as a safe haven, he said. The naira’s slump is likely to continue in the near term given low oil revenue and rising outflows due to uncertainties associated with February’s presidential election, said Uche Uwaleke, a professor of finance and capital markets at the Nasarawa State University in central Nigeria. 31 to exchange the existing bills for new ones, a tight deadline considering that the central bank estimates that as much as 2.7 trillion naira ($6.1 billion) sits outside bank vaults.Īfrica’s most populous country has an average of 4.5 bank branches per 100,000 people and 45% of adults don’t have a bank account. The Abuja-based regulator gave Nigerians until Jan. The local unit’s drop in the black market started a day after the central bank announced last week that it will issue redesigned 200-, 500- and 1,000-naira notes from mid-December in a bid to mop up excess cash in circulation. Read also: The Naira rebrand farce and unwarranted pain of living or doing business in Nigeria While the naira officially closed at 442.75 to the dollar on Friday, currency traders on the streets of Lagos, Nigeria’s commercial hub, quoted the greenback at 890 naira, according Umar Salisu, a bureau de change operator who tracks the data. This has led to a widening gap between the managed and parallel markets to more than 90%. Nigeria’s central bank rations dollars at the official rate, cutting off access to many businesses and individuals, which in turn drives demand to the unauthorized black market. ![]() Rice the staple now cost N51,ooo a bag, and flight ticket fares are now well out of the reach of most of the people. The Naira volatility is the single largest contributor to the surge in inflation which is ravaging the economy, taking prices of virtually everything to the top and causing considerable concern ahead of the year end festivities. Its peers include Sierra Leone’s leone, which is down 36%, and the Egyptian pound, which has lost 35%, according to Bloomberg.Īfrica’s largest economy operates a tightly controlled official rate but it’s in the parallel market where the exchange rate of the local currency is largely determined by the level of demand for the dollar.īusinesses and ordinary Nigerians are feeling the pain. That makes it one of the world’s worst-performing currencies, after Ghana’s cedi, which is down nearly 55% this year, and the Sri Lankan Rupee.
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