This is in regards to Nigeria’s currency (Naira) weakening and causing the ‘dollar shortage’ in the country to deepen.
In: Economics
Before dollar, the “most stable good” was gold. Having gold, knowing it will always have value, allow you to do a reserve and you’re 100% sure that it won’t shrink. It was used as a reference that never move (having a moving reference is quite useless right?).
But gold is limited, and for some other reasons it have been decided to get rid of gold as a reference: currencies will have exchange rates between other currencies, and that’s it. BUT, US being very stable as well as ruling over the world, dollar was “gold-like” and still is. There is also a cheat code that makes US able to print money without many consequences.
So other countries want a reserve in “stable money” aka dollar. So they buy dollars to US, or sell goods to US (or other countries, keep reading) in dollars and keep the money in dollar. Also, dollar is accepted from anyone: you want to trade in Naira? nop, do it in dollars.
So when a country don’t have any dollars…they can’t access international market, they can’t issue dollars to people, and it’s really a shitty moment.
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