The Nigerian currency has recently experienced a significant decline against the US dollar on the official market. Central Bank Governor Olayemi Cardoso has acknowledged that the naira is currently undervalued and steps are being taken to address this issue.
Official and Parallel Market Exchange Rates Almost Converge
The Nigerian currency has reached a new low against the US dollar on the official market, briefly reaching NGN1,398 per greenback on January 25th. This latest record low has brought the official exchange rate close to the parallel market rate of NGN1,400:USD1.
The depreciation of the naira is part of an ongoing trend that began shortly after Bola Tinubu assumed the presidency from Muhammadu Buhari and replaced former Central Bank of Nigeria (CBN) Governor Godwin Emefiele. Prior to this transition, the central bank had maintained a fixed exchange rate of just under NGN500:USD1.
Since the new CBN leadership took office, the naira has steadily depreciated against major currencies in both the official and unofficial markets. Experts on the Nigerian economy attribute this depreciation to foreign exchange shortages.
However, Governor Olayemi Cardoso recently stated during the launch of an economic outlook report that the naira is undervalued and steps are being taken to facilitate its true valuation.
"We believe that the naira is currently undervalued and, in conjunction with coordinated fiscal measures, we will expedite genuine price discovery in the near future. This coordinated approach will contribute to a more balanced and stable exchange rate," said Cardoso.
In order to ensure that all foreign exchange inflows are returned to the central bank, the CBN is reportedly planning to implement several measures, according to a report in the Leadership.
Furthermore, Cardoso expressed his optimism that the reforms being implemented by the CBN will lead to a consistent and stable exchange rate. Such stability will enhance investor confidence and make Nigeria an attractive destination for foreign direct investment.
What are your thoughts on the CBN governor's remarks regarding the value of the naira? Share your opinion in the comments section below.
Frequently Asked Questions
How much are gold IRA fees?
The average annual fee for an individual retirement account (IRA) is $1,000. However, there are many different types of IRAs, such as traditional, Roth, SEP-IRAs, and SIMPLE IRAs. Each type of IRA has its own rules and requirements. If your investments are not tax-deferred, you might have to pay taxes on the earnings. It is important to consider how long you plan on keeping the money. If you plan on holding onto your funds for longer, you'll likely save more money by opening a Traditional IRA rather than a Roth IRA.
A traditional IRA allows for contributions up to $5500 ($6,500 if older than 50). The Roth IRA allows unlimited contributions each year. The difference between them? With a traditional IRA, the money can be withdrawn at your retirement without tax. However, Roth IRA withdrawals are subject to tax.
Can I have gold in my IRA.
Yes! It is possible to add gold to your retirement plans. Gold is a great investment as it doesn't lose money over time. It also protects you against inflation. It doesn't come with taxes.
Before you decide to invest in gold, it is important to understand that it isn't like other investments. You can't purchase shares in gold companies, unlike stocks and bonds. They are also not available for sale.
Instead, convert your gold to money. This means that you must get rid of your gold. You can't just hold onto it.
This makes gold different from other investments. As with other investments you can always make a profit and sell them later. This is not true for gold.
Even worse, gold cannot be used to secure loans. To cover a mortgage, you may need to give up some gold.
What does that mean? You can't just keep your gold forever. It will eventually have to be converted into cash.
However, there is no need to panic about it. You only need to open an IRA account. You can then invest in gold.
Do You Need to Open a Precious Metal IRA
The answer depends on whether you have an investment goal and how much risk tolerance you are willing to take.
You should start an account if you intend to retire with the money.
Precious metals will appreciate over time. They can also be used to diversify.
The prices of silver and gold tend to be linked. This makes them a better choice when investing in both assets.
Precious metal IRAs are not recommended for anyone who isn't planning to use their money for retirement and doesn't want any risk.
Which type of IRA could be used for precious metals
A Individual Retirement Account (IRA), is an investment vehicle offered by most financial institutions and employers. You can contribute to an IRA account which grows tax-deferred and can be withdrawn at any time.
You can save taxes and pay them later with an IRA. This means that you can deposit more money into your retirement plan than have to pay taxes on it tomorrow.
An IRA is a great investment because your earnings and contributions are tax-free. You can withdraw funds at any time. When you do, there are penalties for early withdrawal.
After age 50, you can make additional contributions to an IRA without penalty. If you decide to withdraw your IRA from retirement, you will owe income taxes as well as a 10% federal penalty.
A 5% IRS penalty is applicable to withdrawals made before the age of 59 1/2. Withdrawals between ages 59 1/2 and 70 1/2 are subject to a 3.4% IRS penalty.
A 6.2% IRS penalty applies to withdrawals exceeding $10,000 per annum.
Statistics
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
External Links
investopedia.com
kitco.com
regalassets.com
takemetothesite.com
How To
How to convert your IRA into a Gold IRA
Do you want to change your retirement savings away from a traditional IRA and into a golden IRA? Well, this article will help you do just that. Here are the steps to help you make the change.
“Rolling over” is the act of transferring money from one type (traditional) to another type (gold). Rolling over an account has tax benefits. Some people also prefer to invest in physical assets such as precious metals.
There are two types of IRAs — Traditional IRAs and Roth IRAs. The difference between these two accounts is simple: Traditional IRAs allow investors to deduct taxes when they withdraw their earnings, while Roth IRAs don't. This means that if a Traditional IRA is invested $5,000 today, it will be able to withdraw $4,850 over five years. The Roth IRA would allow you to keep every cent if you invested the same amount.
These are some things to consider if you plan to convert from a Traditional IRA to a Gold IRA.
You must first decide whether you want to transfer funds from one account to another or roll over your current balance to a new account. If you transfer money, income tax will apply to any earnings exceeding $10,000. However, if you roll over your IRA, those earnings won't be subject to tax until you reach age 59 1/2.
After making your decision, you can open a new financial account. You'll likely be required to provide proof of identities, such as a Social Security card, passport, and birth certificate. After that, you'll need to sign paperwork proving you own an IRA. Once you've filled out the forms you'll send them to your bank. They'll verify your identity and give instructions on where to send the checks and wire transfers.
The fun part is here. Once your IRS approves your request, you'll deposit cash in your new account. You will be notified by mail that your request has been approved.
That's it! Now all you have to do is sit back and watch the money grow. Remember that if you are unsure whether you want to convert your IRA, it is possible to close it and roll the balance over into a new IRA.
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By: Terence Zimwara
Title: Nigerian Currency Hits New Low Against US Dollar: Efforts Underway to Rectify Undervaluation
Sourced From: news.bitcoin.com/nigerian-currency-plunges-to-new-low-versus-the-usd-central-bank-governor-says-naira-is-undervalued/
Published Date: Sun, 28 Jan 2024 06:30:32 +0000
