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How will the naira in the coming weeks respond to the goings-on in the Central Bank of Nigeria (CBN), given the suspension and eventual arrest of governor Godwin Emefiele? Lagos-based economic analyst, Razaq Abiola, believes that the current happenings at the CBN will affect the exchange rate significantly. He sees notable depreciation of the naira, an indication already given by President Bola Ahmed Tinubu administration.
“I expect that policy orientation would gradually tilt towards liberalisation of the FX market, with a good dose of regulation that should ensure the system is not overheated and exchange rate find an equilibrium within a comfortable threshold,” Abiola told PBA correspondent in a chat at the weekend.
Join our WhatsApp Channel“I expect the Naira to experience notable depreciation to about N600/N630 range against the greenback whilst we should see some appreciation of the Naira to about N650/USD at the parallel market.”
According to Abiola, the CBN is more importantly expected to become active in blocking loopholes and improving transparency in the FX market to restore investor confidence and stem speculative pressures in the market.
“Of course, an active monetary policy would require support of fiscal measures capable of improving trade and current account balances, including policies and measures to improve crude oil exports as well as non-oil exports.
“The fiscal and monetary policy authorities need to coordinate efforts to checkmate leakages in our trade corridors to improve our balance of payments, in addition to diligent execution of reforms that can stimulate local entrepreneurship, in addition to ushering in foreign direct investments capable of catalysing local productivity.”
Vice President Kashim Shettima had, during a recent meeting with governors of the All Progressives Congress (APC) stock, among other things, urged support for the federal government’s efforts in unifying the official and parallel foreign exchange rates.
This is notwithstanding the initial denial by CBN under the suspended governor, Emefiele.
READ: Updated: Naira Devaluation Fake News – CBN Denies Increasing Dollar Rate To N631
All eyes are now on the newly appointed acting governor, Folashodun Adebisi Shonubi for a new policy direction.
READ ALSO: Brief Notes On Past CBN Governors
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