My name is Owen Collier. I am currently a first year student at the University of Exeter reading Economics.
Economics has been at the heart of my academic pursuits since I first met the subject two years ago. Modern economics requires an understanding of mathematics methods and statistics and as such I have developed an aptitude for both whilst studying economics.
Never has the study of economics been so topical and rewarding. As such, I enjoy sharing my enthusiasm for the subject with my tutees and ultimately hope to help them discover how rewarding the pursuit of academia can be, regardless of whether it is economics or not. For me there is no better way to demonstrate this than by helping to get my tutee the highest grades in their examinations.
A tutoring session will be structured around the wants and needs of the pupil. Whether looking for help with a topic that the tutee find challenging or looking for some stretch and challenge work, I tailor my content so that it will help boost their grades. Additionally I like to apply the topics to related world events because, for me, this is what makes the subject so engaging and can make a candidate stand out to an examiner. To do this I will call upon with BBC news or The Economist.
Finally, a mention of exam boards. My own exam board was OCR for Economics and Edexcel for Mathematics however I will familiarise myself with other exam boards should my tutee not be studying the same was as I did as this is important when making sure content is relevant and can be used to achieve the highest grades.
I hope that this has provided some insight into myself as a tutor and what you can expect from a session.
|Economics||A Level||£20 /hr|
An exchange rate is the price of one currency in terms of another. When this rate is semi-fixed the exchange rate is allowed to fluctuate between a specified range before an institution, usually a central bank, will intervene.
Should the exchange rate deviate from this institution has two main mechanisms at their disposable: Interest rates and foreign currency reserves.
The Nigerian central bank operates the naira on a semi-fixed exchange rate system with the target band of the naira being 160-176 NGN to the dollar.
Falling oil prices are likely to apply downward pressure on the naira as this currency is used to pay for the oil Nigeria exports. As such, when the price of oil goes down less naira is required to purchase the oil which means that the demand for the currency will fall in the short term. The extent to which the demand falls depends on how large a proportion of total export value oil is. The larger it is the greater this fall in demand will be. Falling currency demand, just like for other markets, leads to a fall in the price/value of the Naira.
From the news story we read that this led to the central bank increasing interest rates and intervening in the forex markets with reserves. It increased interest rates as this could offset the depreciation occurring due to the falling oil prices. Higher interest rates increase hot money flows (the flow of money into a county due to the better return on savings or investments) which drive up demand for the currency. The extent to which this appreciates the currency depends on the size of the increase in interest rates and the magnitude of interest rates relative to other nations. This was used in addition to the foreign currency that is held by the central bank. Foreign currency can be used to purchase Naira therefore boosting demand, just like higher interest rates.
Secondly, we can determine that both higher interest rates and the use of foreign currency reserves was not offsetting the fall in value the Naira was experiencing. The central bank reduced the semi-fixed range to 150-160. This range is likely closer to the market equilibrium as there is less downside pressure on the currency. Less pressure means that the higher interest rates in tandem with some intervention in the forex market will now be able to restore stability to the Nigerian Naira.