Economy
Saving Your Money in Different Currencies – What are the Plus Sides?
Communication has been one of the most important activities either between individuals, groups of people or even between countries. It was very important for the currency the country was holding because it was the main tool for communication and the same currency holding could make the two countries united or separated.
We can see the same trend nowadays, however, in the 21st century, it is more likely for countries to have common interests, policies, etc while having the same currency. A perfect example, in this case, is the European Union and countries that are having a Euro as their currency, and as a result, their economic dependency is utterly high.
The same way as the English language became universal and it is the language that is most widely used even while you are travelling abroad, the USD has become a universal currency as well.
If English is used by people to communicate with each other, USD is used by political entities, government officials and is often considered to be the tool to conduct negotiations between countries.
Even though the USD is widely used and accepted in many countries, it is not the primary currency in the majority of countries, and because of that, the countries are using the exchange rates to calculate the difference between two currencies.
If we are in our country, we are using our national currency, however, if we are leaving the country, money exchange is one of the most important details to take into account. The USD and EUR exchange is the most popular pair in the world.
Pros and Cons
The existence of different currencies can be considered as positive as well as a negative prism. The USD is the most frequently used currency and many different activities, whether it is for trading, measurement, and most importantly this is the currency that is fixed to gold.
Another most widely spread currency is the Euro which is used in Europe by the member countries of the Single Currency Market, and the advantages that were imposed by the implementation of the single currency are fascinating. People living in Greece can go to Italy without thinking about the additional commissions for converting the currencies, let alone the trade procedures that are way easier.
The fact that those currencies are very popular does not mean that there are no other currencies that are more valuable. GBP and Swiss Pound are great examples in this case. The differences between currencies are very important to take into account, especially when those two countries are having strong economic relations.
The biggest profit and advantage that is taken from the exchange market and currency fluctuation are by the forex brokers and generally, the foreign exchange market.
The whole idea and the purpose of the industry is to trade with the differences between currencies or between possible changes that might happen between currencies. If someone is considering becoming involved in the market, there are several important factors to be considered.
First and foremost, it is important to find a brokerage company (trading without help is quite difficult) that is regulated on the market.
It also depends on where is your current living locations since the regulatory bodies are different from one country to another, for example, there is a lot of difference between CySEC and FCA, the first one being the regulatory body from Cyprus and offers the companies easier terms and conditions, while FCA is the regulatory body in the UK, having one of the most difficult processes to get the license.
Forex market usually observes the changes in the economy, whether it is inflation or recession, as well as the depreciation and appreciation. The system is quite simple and the trader earns profits if the prediction on a certain currency rate was true, however, the market is very vulnerable to many aspects happening not only in the economy but in political or social agenda. This is why sometimes the regulatory bodies are too restrictive when it comes to giving the license to the brokerage companies.
Savings and different currencies
All of us have to work really hard to make our economic conditions better than it is at that certain time. For that, we often save our money for the next few months, years, or even for the future generation.
The meaning of saving and its efficiency was quite vivid when the whole world faced the global COVID pandemic and the economic crisis that was caused by it. Some people were smart enough to take care of their funds for the dark days.
However, some people appeared to be smart, while others appeared to be smarter. Those who live outside of the US or the EU and receive the wages in their national currency often save their money in the USD or EUR.
During the pandemic, all the currencies were depreciated against the USD, which means that the USD got even stronger and those who had saved in their local currency lost more than those who made saving in the USD.
Very clear examples, in this case, are the Eastern or Central European countries, for example, Poland, which is still using the national currency Polish Zloty, and which was depreciated during the global pandemic. People, who had their savings in the local currency lost twice as much as they would have benefited in the case of investing in the USD.
The economic changes are happening all over the world very dynamically and global inflation is still going, especially after years of lockdowns and quarantine.
USD keeps strengthening its positions against all the other currencies and it is still under the question mark whether the other currencies can survive the dollarization or will they lose their value.
The above-mentioned examples have shown that the information is key to any kind of situation and having the proper knowledge about the general trends of the financial, what are the upcoming events that might affect the economic environment or many other details, can help us decide what our future economic steps should be.
It is true that predictions are not always accurate and we also might make the decision that will be not financially beneficial, however, we should not try out the amount that we are building the trust upon and relying ourselves on them. Having the proper saving management strategy and plan is the key to its success.
By Adedapo Adesanya
A 0.91 per cent growth was recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, May 22, after the share prices of four securities ended in green.
According to data, FrieslandCampina Wamco Plc went up by N15.61 to N179.67 per share from N164.06 per share, Newrest Asl Plc grew by N6.11 to N67.26 per unit from N61.15 per unit, Food Concepts Plc appreciated by 17 Kobo to N2.75 per share from N2.58 per share, and Nitrox Industrial Gases Plc added 6 Kobo to sell at N25.50 per unit compared with the previous day’s N25.44 per unit.
At the close of business, the market capitalisation chalked up N23.22 billion to settle at N2.561 trillion versus Thursday’s N2.538 trillion, and the NASD Unlisted Security Index (NSI) increased by 38.81 points to 4,281.28 points from 4,242.47 points.
During the session, the price of Central Securities and Clearing System (CSCS) Plc was down by N3.13 to N71.07 per share from N74.20 per share.
The activity chart showed that the volume of securities transacted by the market participants decreased yesterday by 81.6 per cent to 590,339 units from the 3.2 million units recorded on Thursday, as the number of deals shrank by 28.6 per cent to 30 deals from the 42 deals recorded a day earlier, while the value of securities increased by 0.5 per cent to N95.3 million from the preceding session’s N94.8 million.
Great Nigeria Insurance (GNI) Plc closed the day as the most active stock by value on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 61.2 million units traded for N4.1 billion.
The most active stock by volume on a year-to-date basis was GNI Plc, with the sale of 3.4 billion units for N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units exchanged for N415.7 million.
By Dipo Olowookere
The Nigerian Exchange witnessed a decline in transactions on Friday despite closing higher by 0.22 per cent on the back of sustained bargain-hunting.
During the last trading session of the week, investors transacted 711.9 million equities valued at N29.1 billion in 62,386 deals compared with the 1.1 billion equities worth N31.0 billion traded in 62,448 deals in the previous day, indicating a decline in the trading volume, value, and number of deals by 35.28 per cent, 6.13 per cent, and 0.10 per cent, respectively.
Fidelity Bank closed the day as the most active stock with the sale of 198.1 million units for N4.6 billion, Access Holdings traded 69.7 million units worth N1.8 billion, Mutual Benefits exchanged 42.7 million units valued at N197.4 million, Japaul transacted 33.9 million units worth N134.4 million, and Zenith Bank sold 24.4 million units valued at N3.2 billion.
Yesterday, the industrial goods index rose by 0.53 per cent, the consumer goods sector jumped 0.28 per cent, the banking industry improved by 0.25 per cent, and the energy counter soared by 0.18 per cent, while the insurance space shed 0.18 per cent.
At the close of business, the All-Share Index (ASI) gained 536.98 points to finish at 249,712.37 points compared with the previous day’s 249,175.39 points, and the market capitalisation grew by N344 billion to N160.077 trillion from N159.733 trillion.
Aluminium Extrusion and DAAR Communications expanded by 10.00 per cent each to sell for N9.90 and N2.09, respectively, RT Briscoe surged by 9.93 per cent to N14.06, Learn Africa increased by 9.79 per cent to N12.90, and Red Star Express advanced by 9.56 per cent to N34.95.
On the flip side, Trans-Nationwide Express depreciated by 9.92 per cent to N5.72, Livestock Feeds dipped by 9.64 per cent to N8.90, The Initiates crashed by 8.65 per cent to N33.80, Ellah Lakes drowned by 8.64 per cent to N10.05, and Neimeth lost 6.36 per cent to trade at N10.30.
By Adedapo Adesanya
The Naira weakened against the United States Dollar by N3.15 or 0.23 per cent to N1,375.46/$1 from N1,372.31/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, May 22.
It was also a similar situation for the domestic currency against the Pound Sterling in the official market yesterday, as it lost N9.46 to sell for N1,849.72/£1 compared with the preceding session’s N1,840.26/£1, and against the Euro, it depreciated by N6.26 to close at N1,597.04/€1, in contrast to Thursday’s exchange rate of N1,590.78/€1.
At the GTBank FX desk, the Nigerian Naira tumbled against the Dollar during the session by N2 to trade at N1,381/$1 versus the previous day’s N1,379/$1, and at the parallel market, it remained unchanged at N1,390/$1.
Analysts at Cowry Asset Management Limited, in their weekly financial outlook, have projected the Naira will remain under soft pressure in near term due to continuous FX demand.
“Looking ahead, the Naira may remain under mild pressure in the near term due to persistent FX demand, though rising external reserves could help cushion volatility,” they noted.
Meanwhile, the Central Bank of Nigeria (CBN) this week reiterated that it would continue with its current policy direction to sustain the fight against inflation and stabilise the exchange rate.
This comes as the FX market has changed significantly under the ongoing reforms introduced by the apex bank, with increased market liquidity reducing the need for heavy intervention by the CBN. Its intervention currently accounts for only about 1.2 to 1.3 per cent of total market turnover in 2025, a development he said reflects the growing strength of the market.
Turnover has risen sharply from about $100 million in 2023 to roughly $550 million presently, with transactions occasionally climbing to as high as $1 billion in a single day.
A look at the cryptocurrency market showed that it was down on Friday as Mr Kevin Warsh was sworn in by President Donald Trump as the chairman of the US Federal Reserve, replacing Mr Jerome Powell, who will continue as a governor in the US central bank.
The appointment was made in the hope that he would lead the central bank to cut interest rates, but the Iran war has sent oil prices soaring and re-ignited what had been cooling inflation.
Ethereum (ETH) depreciated by 5.5 per cent to $2,010.90, Dogecoin (DOGE) lost 5.2 per cent to trade at $0.1001, Cardano (ADA) fell by 5.0 per cent to $0.2389, Solana (SOL) slipped by 4.9 per cent to $82.69, and Bitcoin (BTC) slid by 3.3 per cent to $74,950.02.
Further, Ripple (XRP) went down by 2.9 per cent to $1.32, Binance Coin (BNB) declined by 2.6 per cent to $641.61, and TRON (TRX) shrank by 1.2 per cent to $0.3606, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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