The Exchange Rate is Artificially Low; Osinbajo asks CBN to Bow to Market Forces

Proshare

Monday October 11, 2021 / 09:40 PM / by TheCable/ Header Image Credit:  Aso Rock Villa

 

Vice-President Yemi Osinbajo has called on the Central Bank of Nigeria to allow the naira reflect the realities of the market.

 

The national currency is changing for N411/$ at the official side of the market but N565/$ at the parallel market, which many believe is reflect of the true value.

 

Speaking at the midterm retreat of President Muhammadu Buhari's second tenure, the vice-president said the exchange rate is artificially low, and this is deterring investors from bringing foreign exchange into the country.

 

"As for the exchange rate, I think we need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply," Osinbajo said.

 

"We can't get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I'm convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.

 

"Anyway, all those are issues that when the CBN governor has time to address, he will be able to address in full."

 

CBN Competing With Ministries?

Osinbajo suggested that the central bank is competing with the fiscal side of the economy, which includes the ministries, departments, and agencies of government.

 

"There must be synergy between the fiscal and the monetary authority. We must be able to deal with the synergy, we must handle the synergy between the monetary authority, the CBN, and the fiscal side.

 

"Sometimes, it appears that there is competition, especially on the fiscal side. If you look at some of the interventions, you will find that those interventions are interventions that should be managed by ministries.

 

"The ministry of industry, trade and investment should handle MSMEs interventions, and we should know what the CBN is doing. In other words, if the CBN is intervening in the MSME sector, it should be with the full cooperation and consent of the ministry of industry.

 

"Sometimes you will get people who are benefiting more than once because we simply have no line of sight on what is going on, on one side."

 

Speaking on surviving the economic challenge of 2020, Osinbajo said Buhari deserves the credit for providing steady leadership through the crisis.

 

"Let me say on the whole that we have been able to weather the storm of a very serious economic challenge."

 

"I think that is largely on the steady and stable leadership we received from the president. I think if Mr. President had panicked in that period, we would have had a lot of difficulties, perhaps we would be in a much worse situation.

 

"He deserves the commendation for providing that steady hand when that was required."

 

Osinbajo said we are at a point in our economic history where anything is possible if the country is willing to work together towards the same objective.

 

Credit:

The post 'The exchange rate is artificially low' - Osinbajo asks CBN to bow to market forces first appeared in TheCable.ng on October 11, 2021.  


 Proshare Nigeria Pvt. Ltd.


Related News

  1. Thoughts and Reflections on the Forex Crisis - Proshare Research
  2. NAFEX Rate Appreciated by 0.04% WoW to N412.98 from N413.14
  3. Gross Official Reserves Increased to US$36,8bn in September 2021
  4. NAFEX Rate Depreciated by 0.16% WoW to N413.14 from N412.48
  5. The Endless Roller Coaster of the Naira in 2021
  6. A Market Determined FX Regime is Nigeria's Best Option - Muda Yusuf
  7. NAFEX Rate Depreciated by 0.13% WoW to N412.48 from N411.95
  8. NAFEX Rate Depreciated by 0.17% WoW to N411.95 from N411.25
  9. AbokiFX Suspends Currency Rate Updates; Aftermath of CBN Crackdown
  10. Parallel Market Pressures: No End in Sight?
  11. Parallel Market Rate at an All-time High of N550
  12. Remittance to Africa Projected to Decrease in 2021
  13. Naira Depreciated by 1.10% WoW in the Parallel Market at an Average Exchange Rate of N532.00
  14. Gross Official Reserves Increased by US$610m to US$34.02bn in August 2021
  15. IEFX Total Transaction Value Decreased by 4.86% to $629.34m
  16. Nigeria-China Currency Swap: Still Waiting for a Deal
  17. Evaluating BDCs' Creative FX Supply Sources, Parallel Market Rate Hits N527
  18. A Significant Reduction in FX Utilisation
  19. Naira Depreciated at the Parallel Market by -0.54% WoW to N518.60 from N515.80
  20. Recent FX Pressures: Storm Before the Calm?
  21. Market Pulse: An Historical Nostalgia - Reliving the Clampdown on BDC Operators
  22. BDC Market Implodes as the CBN Stops Sale of Dollars to the Parallel Market
  23. CBN to Refund Minimum Capital Deposits and Licensing Fees to BDC Promoters
  24. CBN Directs DMBs to Set up Teller Points at Bank Branches for the Sale of FX To Retail Customers

 Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP