Yesterday, CBN finally did the only logical thing -- float the Naira. No more pegging the Naira to Dollar (and other currencies) exchange rate. And it is good news for me for several reasons, which I will be generous to share below.
1. Stock Market Rises
I have been noticing my stocks investment grow impressively from last week. It seems some people got wind of this very early. I even read in ARM's daily research report on Monday or so that the rise is because people are expecting CBN to devalue the Naira and ease Forex transactions. Well, they've not devalued but have very well eased Forex sourcing. All the investors waiting till they get a clear picture of the direction the CBN is heading are now happy and can do concrete analysis now. The expectation of the increased inflow into the stocks market has buoyed the hope of local investors and made them re-organise their portfolio in favour of stocks. Which is good/gain for me as I have moved my investments from money market to mainly stocks, knowing that things can only get better, not worse.
2. Better Economy
At least compared to that of the first part of this year. The companies caught in this Forex debacle have been slowing down their operations. Especially, foreign companies who have issues with sourcing from unofficial forex markets. Now there is some relief. And better economy means better business for me.
3. Joy of seeing something new
Finally, I get to see first hand how a nation transitions from managed float to free float. Even the CBN is not yet sure how this will be implemented. And I will be following to see how it is actually done.
4. More reasonable Exchange rate
I don't mean stronger Naira but an exchange rate that is based on sound reason/logic. High or low. I can live with something I can explain, rather than something that makes no sense.