Sequel to the official introduction of a flexible foreign exchange policy by the Central Bank of Nigeria, CBN, on Wednesday, June 15, financial experts all over the country have applauded President Muhammadu Buhari.
An Abuja based Developmental Economist, Dr. Katch Ononuju, in an exclusive interview with Post-Nigeria, proclaimed that the President has finally done the right thing, by allowing market forces to determine the true value of the Naira.
Also, a Lagos based financial expert, Bismarck Rewane, has applauded the CBN and the President, for allowing the market to determine the value of the naira.
Recall, that the CBN Governor, Godwin Emefiele while reeling out the policy had said: “We are talking about an open, transparent two-way system.
“It’s intended, we don’t have speculators and rent-seekers. I don’t expect that any other exchange rate will be recognised.“The exchange rate would be purely market-driven using the Thomson-Reuters Order Matching System, as well as the Conversational Dealing Book.“The CBN would participate in the market, through periodic interventions to either buy or sell FX as the need arises.“To improve the dynamics of the market, we will introduce FX Primary Dealers (FXPD) who would be registered by the CBN to deal directly with the Bank for large trade sizes on a two-way quotes basis.“These Primary Dealers shall operate with other dealers in the Inter-bank market, amongst other obligations that will be stipulated in the Foreign Exchange Primary Dealers, FXPD, Guidelines, which would also be released.
“There shall be no predetermined spread on FX spot transactions executed through the CBN intervention with Primary Dealers, while all FX Spot purchased by Authorized Dealers are transferable in the inter-bank FX Market, Emefiele said.
Reacting to the policy, Ononuju said: ”CBN is saying flexible, they are just playing with words, it like when the All Progressive Congress, APC, said they were removing subsidy, while others said they were increasing price”, the truth is that Buhari has finally allowed the naira to be free.
“All we had been saying is allow the naira to float, investors were no longer coming, because there was a distortion in the market, the naira was overvalued. All we were saying is allow the naira to be determined by market forces, this will attract investors.
He added, “We have spent so much of our reserve in defending the naira, this cannot be sustained, due to the falling impact of crude oil price at the international market.
“The CBN has soon realised the fact and have open up the market. This policy will create jobs, as investors begin to troop in, it will avail Nigeria more money for capital projects through partnership, it will also protect our reserve and fund critical sectors of our economy.“Imagine if we had done this long ago, we would not have been in this shameful state of recession.“But am happy that we have soon realised our mistake; this is what we have been saying back then, and I know with time, we will soon see a couple of positive changes in the Nigerian market and economy at large,” Ononuju concluded.
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