Nigeria Contemplates Outlawing Forex Parallel Market
A Nigerian official recently announced plans to expand the official currency market to include "legitimate" participants such as bureaux de change and financial technology companies. The goal is to address the country's foreign exchange shortage. In addition, Finance Minister Wale Edun revealed that Nigeria is expecting $10 billion in inflows in the coming weeks.
Naira's Slide and Potential Outlawing of Parallel Market
During the Nigerian Economic Summit held on October 23, Taiwo Oyedele, a member of President Bola Tinubu's committee on fiscal policy and tax reforms, stated that the government is considering outlawing trading on the foreign currency parallel market. This announcement coincided with a significant drop in the value of the local currency against the U.S. dollar on the parallel market. According to Bloomberg, the Nigerian naira reached a low of 1,215 naira per dollar on the parallel market, while the official market maintained an exchange rate of 1:795.
This decline in the naira's value comes shortly after the Central Bank of Nigeria (CBN) lifted import restrictions on 43 items in an effort to curb the currency's depreciation on the parallel market. However, despite these measures, the naira continues to depreciate against the dollar, raising concerns that it may breach the 2,000 mark. Oyedele suggested that the lack of sufficient liquidity is a key factor contributing to the naira's ongoing decline.
Anticipated Inflows and the Path Ahead
Despite the challenges faced by the Nigerian currency, Finance Minister Wale Edun remains optimistic. He recently stated that Nigeria is expecting $10 billion in foreign currency inflows in the coming weeks. However, no further details were provided regarding these anticipated inflows.
In conclusion, Nigeria is taking steps to include bureaux de change and financial technology companies in the official currency market, with the aim of addressing the country's foreign exchange shortage. The potential outlawing of trading on the parallel market is being considered as a means to stabilize the currency. While the naira continues to face challenges, the expected inflows provide hope for the future.
Frequently Asked Questions
What is a Precious Metal IRA (IRA)?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These are “precious metals” because they are hard to find, and therefore very valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Precious metals are sometimes called “bullion.” Bullion refers to the actual physical metal itself.
You can buy bullion through various channels, including online retailers, large coin dealers, and some grocery stores.
A precious metal IRA allows you to invest directly in bullion, rather than buying stock shares. This will ensure that you receive annual dividends.
Precious Metal IRAs don’t require paperwork nor have annual fees. Instead, your gains are subject to a small tax. Plus, you get free access to your funds whenever you want.
Who is the owner of the gold in a gold IRA
The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.
To take advantage of this tax-free status, you must own at least $10,000 worth of gold and have been storing it for at least five years.
Although gold can help to prevent inflation and price volatility, it’s not sensible to have it if it’s not going to be used.
If you plan on selling the gold someday, you’ll need to report its value, which could affect how much capital gains taxes you owe when you cash in your investments.
It is a good idea to consult an accountant or financial planner to learn more about your options.
What is the cost of gold IRA fees
An Individual Retirement Account (IRA) fee is $6 per month. This includes account maintenance and any investment costs.
You may have to pay additional fees if you want to diversify your portfolio. The fees you pay will vary depending on the type of IRA that you choose. For example, some companies offer free checking accounts but charge monthly fees for IRA accounts.
A majority of providers also charge annual administration fees. These fees can range from 0% up to 1%. The average rate per year is.25%. These rates are often waived if a broker like TD Ameritrade is used.
Should you Invest In Gold For Retirement?
This will depend on how much money and whether you were able to invest in gold at the time that you started saving. Consider investing in both.
You can earn potential returns on your investment of gold. This makes it a worthwhile choice for retirees.
While most investments offer fixed rates of return, gold tends to fluctuate. Its value fluctuates over time.
But this doesn’t mean you shouldn’t invest in gold. It just means that you need to factor in fluctuations to your overall portfolio.
Another advantage to gold is that it can be used as a tangible asset. Unlike stocks and bonds, gold is easier to store. It can be easily transported.
Your gold will always be accessible as long you keep it in a safe place. You don’t have to pay storage fees for physical gold.
Investing in gold can help protect against inflation. You can hedge against rising costs by investing in gold, which tends to rise alongside other commodities.
Also, you’ll reap the benefits of having some savings invested in something with a stable value. Gold tends to rise when the stock markets fall.
You can also sell gold anytime you like by investing in it. As with stocks, your position can be liquidated whenever you require cash. You don’t even have to wait until you retire.
If you do decide to invest in gold, make sure to diversify your holdings. Do not put all your eggs in one basket.
You shouldn’t buy too little at once. Start with just a few drops. Next, add more as required.
Don’t expect to be rich overnight. It is to create enough wealth that you no longer have to depend on Social Security.
While gold may not be the best investment, it can be a great addition to any retirement plan.
How much gold can you keep in your portfolio
The amount of money you need to make depends on how much capital you are looking for. For a small start, $5k to $10k is a good range. As you grow, it is possible to rent desks or office space. Renting out desks and other equipment is a great way to save money on rent. Only one month’s rent is required.
It is also important to decide what kind of business you want to run. In my case, I run a website-creation company. Our clients pay us between $1000-2000/month and depending on their order. So if you do this kind of thing, you need to consider how much income you expect from each client.
Because freelance work pays freelancers, you won’t likely get a monthly income if you do freelance work. You might get paid only once every six months.
You need to determine what kind or income you want before you decide how much of it you will need.
I would recommend that you start with $1k-2k worth of gold and then increase your wealth.
What are some of the benefits of a gold IRA
The best way to invest money for retirement is by putting it into an Individual Retirement Account (IRA). It is tax-deferred until it’s withdrawn. You can decide how much money you withdraw each year. There are many types available. Some are better for those who want to save money for college. Others are intended for investors seeking higher returns. Roth IRAs are a way for individuals to make contributions after the age of 59 1/2, and then pay taxes on any earnings upon retirement. These earnings don’t get taxed if they withdraw funds. This type of account might be a good choice if your goal is to retire early.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA which requires taxes to be paid on gains as you wait to withdraw them, a IRA with gold allows you to invest in multiple asset classes. For people who would rather invest than spend their money, gold IRA accounts are a good option.
Another benefit to owning IRA gold is the ability to withdraw automatically. You won’t have the hassle of making deposits each month. To make sure you don’t miss any payments, you can also set up direct deductions.
Gold is one of today’s most safest investments. Because it’s not tied to any particular country, its value tends to remain steady. Even in times of economic turmoil gold prices tend to remain stable. It is therefore a great choice for protecting your savings against inflation.
How much should your IRA include precious metals
When investing in precious metals, the most important thing to know is that they aren’t just for wealthy people. You don’t need to have a lot of money to invest. You can actually make money without spending a lot on gold or silver investments.
You might think about buying physical coins such a bullion bar or round. Also, you could buy shares in companies producing precious metals. Another option is to make use of the IRA rollover programs offered by your retirement plan provider.
Regardless of your choice, you’ll still benefit from owning precious metals. Although they aren’t stocks, they offer the possibility for long-term gains.
And unlike traditional investments, they tend to increase in value over time. This means that if you decide on selling your investment later, you’ll likely get more profit than you would with traditional investing.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (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)
External Links
wsj.com
- Saddam Hussein’s Invasion Helped Uncage a Bear In 1990 – WSJ
- Are you interested in keeping gold in your IRA at-home? It’s not exactly legal – WSJ
forbes.com
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options? Types, Spreads, Example and Risk Metrics
law.cornell.edu
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
Investing in gold vs. investing in stocks
These days, it might seem quite risky to invest your money in gold. This is because many people believe gold is no longer financially profitable. This belief comes from the fact most people see gold prices falling due to the global economy. They think that they would lose money if they invested in gold. In reality, however, there are still significant benefits that you can get when investing in gold. Below are some of them.
One of the oldest forms known of currency is gold. It has been in use for thousands of year. People around the world have used it as a store of value. As a means of payment, South Africa and many other countries still rely on it.
You must first decide how much you are willing and able to pay per gram to decide whether or not gold should be your investment. The first thing you should do when considering buying gold bullion is to decide how much you will spend per gram. If you don’t know the current market rate for gold bullion, you can always consult a local jeweler to get their opinion.
It’s also important to note that, although gold prices are down in recent months, the costs of producing it have risen. So while the price of gold has declined, production costs haven’t changed.
Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. If you intend to only purchase enough gold to cover your wedding rings it may be a smart decision to not buy any gold. If you plan to do so as long-term investments, it is worth looking into. You can profit if you sell your gold at a higher price than you bought it.
We hope you have gained a better understanding about gold as an investment tool. Before making any investment decisions, we strongly advise that you thoroughly research all options. Only then can informed decisions be made.
—————————————————————————————————————————————————————————————-
By: Terence Zimwara
Title: Nigeria Plans to Include Fintechs in Broadened Official Currency Market
Sourced From: news.bitcoin.com/nigeria-plans-to-include-fintechs-in-broadened-official-currency-market/
Published Date: Thu, 26 Oct 2023 08:00:29 +0000
