NESG calls for full flexibility in foreign exchange market

The Nigerian Economic Summit Group (NESG) on Tuesday said the current fall in the naira to dollar exchange rate might not be sustainable without a truly flexible foreign exchange policy.

The Head of Research, NESG, Dr Olusegun Omisakin, told Newsverge in Lagos that a market determined exchange rate would bridge the rate gap between the black market and official rate permanently.

Newsverge reports that since the Central Bank of Nigeria (CBN) reviewed the foreign exchange policy on Feb. 20, the Naira has continued to firm against the dollar in the entire major segments of the market.

The Naira rebounded from N520 to a dollar last week to close at N450 to a dollar on Feb 27.

“What CBN did is a good move but the concern is how long would they fund Forex? What happens when we face oil price trajectory that is not favourable again; are we going to have enough Forex to pump into banks.

“We will solve the problem once and for all if we ensure that people that come in are faced with a single foreign exchange rate and market forces determine the prices at which Naira will be priced against dollar,” he said.

Omisakin urged the apex bank to harmonise exchange rate, solve lapses in the present exchange rate policy, and play a minimal role in foreign exchange market.

“For how long will CBN continue to ration and determine who gets what and who does not; there are many investors hanging out there because they are not sure of the foreign exchange policy we are operating.

“With the right policy structure, we signal serious policy efficiency to investors to come into our economy,” Omisakin said.