The Going Up, Up and Up Of Dollar To Naira. Bank charged me N250 to $1.

I woke up to an unpleasant surprise. I saw the debit alert of a transaction I made yesterday. I was charged N250 to $1 for an international transaction. I bought something online. The Naira equivalent was way above what I calculated when making the purchase. I almost screamed! N35,664.42 for a $142.66 purchase!

Now I am going to do a review of my online transactions, especially the recurrent one. I am running a Google advert campaign for a business and I was paid at N220 to $1. I will have to inform them and maybe pause the campaign before I turn to Father Christmas.

I am also going to check the list of all my monthly charged subscriptions: Skype, Join.me webinar, Mailchimp, Google Adwords, Upwork freelancer payments and others. I will start considering ending the ones I am not making any valuable use of or think of ways to get value out of them.

I really feel for those in the retail space -- import and sell. Imagine if the bill was for a product I had already billed the cost price at the usual N225 to $1 I was charged about two weeks ago. I will almost definitely incur a loss. Just two days ago, I sold iTunes cards and did the calculation at N225 to $1, I didn't bother checking the debit alert I got for the dollar cost price. Now I have checked them and I am barely making a gain. The new rate has wiped off most of the gain. I will have to review the price upward before I run a loss.

It is also getting me worried about my online Masters programme. I still have 14 months (monthly) instalments to make. And at the rate the dollar rate is going up, it is has if the school fee is increasing every few weeks.

Unfortunately, there's no one to blame. In fact, I think the dollar rate will go up more. The CBN is really trying hard to peg the rate. The intention is good but it is not sound. You can't fight the market forces. Exchange rates are tied to the performance of the economy. As long as the demand for our Naira is low due to the drop in Crude Oil sales/price and low export generally, and the demand for dollar is steady as we still import the same amount of goods (if not more) and buy dollars when travelling out; then the price of dollar will continue to rise till demand and supply meet. We have a situation of too few dollars interested in our Naira, which translates to too many Naira going after the dollar. 

It is not something unusual. Even the developed countries experience it. There are countries our currency is doing better than and there are ones, like the US, that it is doing worse than. And as long as fewer people are interested in buying our goods and investing in our country so that more dollars will exchange for our Naira, then we will only wipe off our foreign reserve for nothing if the CBN keeps pegging the exchange rate at below the market rate. And I say for nothing because the foreign reserve is not the Widow's jar of oil and neither is the CBN governor, Elisha. The foreign reserve will dry up and the crash of Naira will be unhelped.

For now, I have been given a foretaste of the looming reality. I have to tighten my trousers and not be caught unaware.