Osinbajo Calls for Naira Exchange Rate to be Determined by Market Forces at it is Currently "Artificially Low"

Osinbajo Calls for Naira Exchange Rate to be Determined by Market Forces at it is Currently "Artificially Low"

  • Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency,
  • In May, the central bank of Nigeria devalued the naira by 7.6% against the dollar in a move to develop a single currency market
  • It followed the decision to ban the sale of dollars to Bureau du Change operators but this has failed to stop the Naira to the dollar crises

Vice President Yemi Osinbajo has requested the Central Bank of Nigeria to allow Naira exchange rate reflect market realities.

According to the Cable, the vice president made the remark at President Muhammadu Buhari's second tenure's midterm retreat.

The report quoted the Vice President as saying the present currency rate is artificially low, and this is preventing investors from bringing foreign capital into the country.

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OPINION: Why Osinbajo is right on the dollar rate by Etim Etim

Nigerians are becoming more concern on the value of Naira
The value of Naira is putting extra burden on Nigerians Credit: Mu Na Di
Source: Getty Images

Osinbajo said:

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"We are unable to introduce additional dollars into the system because the exchange rate is artificially low." And everyone is aware of how large our reserves may develop. I'm convinced that the CBN's present demand management policy has to be reconsidered, but that's just my opinion.

Osinbajo also stated that the central bank is competing with the government's fiscal side, and doing the job of ministries, departments, and agencies.

Osinbanjo noted:

"There must be coordination between fiscal and monetary authorities.We need to be able to deal with the synergy, the synergy between the monetary authority, the CBN, and the fiscal side. There appears to be rivalry at times, particularly on the budgetary side. When you examine some of the initiatives, you will notice that these are interventions that should be administered by ministries.

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Naira continues free-fall at official markets

The rise in oil price, the successful Eurobond, and also the International Monetary fund(IMF) $3.5 billion SDR credit have helped boost Nigeria's reserves

In fact, it is expected Nigeria reserves could hit over 40 billion in the coming months when CBN gets all the money expected

The rise in external reserves will come as a welcome boost for CBN in its fights to keep Naira stable amid pressure from investors and Nigerians for foreign currency

Source: Legit.ng

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