To keep dollars in cash or not?

Hello Financial Experts,

Since this pandemic and lock-down started, my wife and I have been advised by friends to hold on to the cash we have at hand especially dollars. Do you advise us to keep our dollars in cash?

Thanks.

Michael from Lagos

Dear Michael,

We won’t advise you to keep dollars in cash because you’ll be losing income that you could have earned if that cash was invested.

We encourage you to invest instead in dollar-denominated funds such as Eurobond Funds to protect against downside risk (devaluation of the naira).

In dire economic situations like we have today, we advise investors to take on a risk-off approach by investing in safe haven assets such as Money market funds and Government securities with some degree of cash to fund anticipated liabilities. The current economic climate faced in Nigeria has found several investors seeking to lower their exposure to the naira relative to the US dollar as the nation braces for increased currency uncertainty.

We hope we’ve been of help at this time.

Thank you.