Experts in Nigerian economy say that the five-year-old agreement between Nigeria and China on currency swaps has not helped to ease the pressure on the Nigerian currency. According to an expert, the large trade deficit between Nigeria and China is holding back the implementation of the currency swap agreement.
Reduce the pressure on the Naira
Experts on Nigerian economics say that the five-year-old currency exchange agreement between Nigeria and China has not been able to reduce the pressure on the Nigerian naira. The agreement, signed between the Central Bank of Nigeria and the People's Bank of China, was intended to ease pressure on Nigeria's reserves and ensure stability of foreign exchange.
Since the signing of the swap agreement in 2018, however, the Nigerian currency depreciated against the dollar. It went from N305 to $1 in 2018 to N460 per $1 in the first week in April 2023. The exchange rate for the Nigerian currency against the yuan fell from N48:CNY1 in 2018 to N66.70 CNY1 on 6 April 2023. The naira/dollar rate was reported to be over N730 per $1 on the parallel foreign exchange market. This is a major source of greenbacks for Nigerian individuals and businesses.
The failure of the currency exchange arrangement came as several countries were attempting to or have established similar arrangements with China.
Taiwo Oyedele of PWC Nigeria's tax and corporate advisory service pointed out that the trade imbalance between China and Nigeria is the reason why the currency exchange arrangement seems to be failing to stop the naira from declining.
"The implementation of the agreement has been difficult so far due to the imbalance in trade between Nigeria and China. "We import a lot from China but export a fraction of that amount, and this has actually been declining, in addition to relative instability in the naira's value," Oyedele said.
Oyedele believes that Nigeria can remedy the situation by substituting locally produced products for imports or promoting them.
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Frequently Asked Questions
Can the government steal your gold?
Your gold is yours, so the government cannot confiscate it. You have earned it by working hard for it. It belongs exclusively to you. However, there may be some exceptions to this rule. You could lose your gold if convicted of fraud against a federal government agency. If you owe taxes, your precious metals could be taken away. You can keep your gold even if your taxes are not paid.
How much should I contribute to my Roth IRA account?
Roth IRAs allow you to deposit your money tax-free. The account cannot be withdrawn from until you are 59 1/2. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. First, you can't touch your principal (the initial amount that was deposited). No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you take out more than the initial contribution, you must pay tax.
The second rule says that you cannot withdraw your earnings without paying income tax. When you withdraw, you will have to pay income tax. Let's take, for example, $5,000 in annual Roth IRA contributions. Let's also assume that you make $10,000 per year from your Roth IRA contributions. You would owe $3,500 in federal income taxes on the earnings. You would have $6,500 less. Since you're limited to taking out only what you initially contributed, that's all you could take out.
So, if you were to take out $4,000 of your earnings, you'd still owe taxes on the remaining $1,500. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). So even though you received $7,000 in Roth IRA contributions, you only received $4,000.
There are two types of Roth IRAs: Traditional and Roth. Traditional IRAs allow for pre-tax deductions from your taxable earnings. You can withdraw your contributions plus interest from your traditional IRA when you retire. You have the option to withdraw any amount from a traditional IRA.
Roth IRAs do not allow you to deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. There is no minimum withdrawal limit, unlike traditional IRAs. You don't need to wait until your 70 1/2 year old age before you can withdraw your contribution.
What is a Precious Metal IRA and How Can You Benefit From It?
A precious metal IRA lets you diversify your retirement savings to include gold, silver, palladium, rhodium, iridium, osmium, osmium, rhodium, iridium and other rare metallics. These are called “precious” metals because they're very hard to find and very valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Bullion is often used to refer to precious metals. Bullion refers simply to the physical metal.
Bullion can be purchased through many channels including online retailers and large coin dealers as well as some grocery stores.
A precious metal IRA lets you invest in bullion direct, instead of purchasing stock. This allows you to receive dividends every year.
Precious metal IRAs have no paperwork or annual fees. Instead, your gains are subject to a small tax. You can also access your funds whenever it suits you.
What are the benefits of a gold IRA
The benefits of a gold IRA are many. You can diversify your portfolio with this investment vehicle. You have control over how much money goes into each account.
You also have the option to roll over funds from other retirement accounts into a gold IRA. If you are planning to retire early, this makes it easy to transition.
The best part? You don’t need to have any special skills to invest into gold IRAs. They are offered by most banks and brokerage companies. Withdrawals can happen automatically, without any fees or penalties.
However, there are still some drawbacks. The volatility of gold has been a hallmark of its history. Understanding why you want to invest in gold is essential. Is it for growth or safety? Do you want to use it as an insurance strategy or for long-term growth? Only after you have this information will you make an informed decision.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. You won't need to buy more than one ounce of gold to cover all your needs. Depending on your plans for using your gold, you may need multiple ounces.
You don’t necessarily need a lot if you’re looking to sell your gold. You can even manage with one ounce. You won't be capable of buying anything else with these funds.
What is the best precious metal to invest in?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Gold is a traditional haven investment. However, it is not always the most profitable. You might not want to invest in gold if you're looking for quick returns. If you have time and patience, you should consider investing in silver instead.
Gold is the best investment if you aren't looking to get rich quick. If you want to invest in long-term, steady returns, silver is a better choice.
Can I hold physical gold in my IRA?
Not just paper money or coins, gold is money. People have used gold as a currency for thousands of centuries to preserve their wealth and keep it safe from inflation. Investors today use gold to diversify their portfolios because gold is more resilient to financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. It's not guaranteed that you'll make any money investing gold, but there are several reasons it might be worthwhile to add gold to retirement funds.
Gold has historically performed better during financial panics than other assets. Gold prices rose nearly 100 percent between August 2011 and early 2013, while the S&P 500 fell 21 percent over the same period. During turbulent market conditions gold was one of few assets that outperformed stock prices.
Gold is one of the few assets that has virtually no counterparty risks. Even if your stock portfolio is down, your shares are still yours. But if you own gold, its value will increase even if the company you invested in defaults on its debt.
Finally, gold offers liquidity. This means that you can sell gold anytime, regardless of whether or not another buyer is available. You can buy gold in small amounts because it is so liquid. This allows one to take advantage short-term fluctuations within the gold price.
What precious metals could you invest in to retire?
The best precious metal investments are gold and silver. They are both simple to purchase and sell, and they have been around for a long time. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: Gold is one the oldest forms currency known to man. It's also very safe and stable. It's a great way to protect wealth in times of uncertainty.
Silver: Silver is a popular investment choice. It's an ideal choice for those who prefer to avoid volatility. Unlike gold, silver tends to go up instead of down.
Platinium is another precious metal that is becoming increasingly popular. Like gold and silver, it's very durable and resistant to corrosion. It's also more expensive than the other two.
Rhodium: The catalytic converters use Rhodium. It's also used in jewelry making. It is also very affordable in comparison to other types.
Palladium: Palladium is similar to platinum, but it's less rare. It is also cheaper. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
Statistics
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
irs.gov
forbes.com
investopedia.com
How To
How to keep physical gold in an IRA
The easiest way to invest is to buy shares in companies that make gold. However, there are risks associated with this strategy. It isn't always possible for these companies to survive. Even if they do survive, there is still the possibility of losing money to fluctuating gold prices.
You can also buy gold directly. This means that you will need to open an account at a bank, bullion seller online, or purchase gold from a trusted seller. These options offer the convenience of easy access, as you don't need stock exchanges to do so. You can also make purchases at lower prices. It's also easier to see how much gold you've got stored. A receipt will be sent to you indicating exactly how much you paid. This will allow you to see if there were any tax omissions. You have less risk of theft when investing in stocks.
There are also some drawbacks. You won't get the bank's interest rates or investment money. It won't allow you to diversify any of your holdings. Instead, you'll be stuck with what's been bought. Finally, tax man may want to ask where you put your gold.
BullionVault.com is the best website to learn about gold purchases in an IRA.
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By: Terence Zimwara
Title: Report: Nigeria-China Currency Swap Agreement Fails to Ease Pressure on the Naira
Sourced From: news.bitcoin.com/report-nigeria-china-currency-swap-agreement-fails-to-ease-pressure-on-the-naira/
Published Date: Sun, 16 Apr 2023 09:30:49 +0000
