As the nation continues to grapple with the downward spiral of the naira, the number two citizen, Vice-President Yemi Osinbajo has challenged the Central Bank of Nigeria (CBN) to allow the naira to reflect the exact realities of the exchange market.
Presently, while Nigeria’s currency, the Naira, is exchanged for N411 to one dollar official exchange market, it is exchanged at N565 to one dollar at the parallel market – and it is generally believed that the latter figure is actually the true value of the naira.
VP Osinbajo, who was speaking during the midterm retreat of President Muhammadu Buhari’s second tenure, said the disparity between both rates is too wide and would leave foreign investors confused, if not deterred 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. 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.”
He pointed out that the nation’s apex bank was competing with ministries, departments, and agencies of government and he urged them to stop the trend as they cannot afford to be in such competition with the fiscal side of the economy.
VP Osinbajo said:
“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.”
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