Fakoyejo OlalekanWale Edun, one of the ministerial nominees of President Bola Tinubu, has disclosed that corruption and inefficiencies are behind the dollar trading as high as N860/$1.
The special adviser on monetary policies to President Tinubu also said the foreign exchange management in the past, as well as speculators also contributed to the continuous depreciation of the naira in the foreign exchange market.
He made this known during his screening as a ministerial nominee at the National Assembly, where he disclosed that the fundamentals of the Nigerian economy are not behind the N860/$1 exchange rate.
“the N860/$ that we are seeing is not backed up by the fundamentals of the Nigerian economy,” Edun told the legislative chamber during the screening.
“The rate, when you move aside speculation and the fact that there is as a result of foreign exchange managing practice of the past, the inefficiencies and the corruption involved has meant that there is an overhang of unpaid dollar bills and that is what is putting pressure on the exchange rate,” he added.
Despite the current fluctuation, Edun said the chances of exchange rate stability are high should inflation be curbed, oil and non-oil revenues, as well as remittances raised.
In his words, Edun said: “The issue of foreign exchange is clearly uppermost in the minds of the monetary authorities. What I can say is this. For a country that revenue flows from oil revenues, from remittances, from other non-oil exports, and from financing of over $100 billion a year, there is no reason that there should not be a stable exchange rate.”
He disclosed that the monetary authorities and the monetary team of President Tinubu intend to increase investment sources, attract investments across the world and raise equity funds instead of debt to finance Nigeria’s economy to resolve the fluctuation in the exchange market.
Meanwhile, he warned that speculators could lose their money betting on the naira’s continuous devaluation, as the dollar rate could settle around N700/$1.
“But I would just like to warn that all the models are showing that the fundamental value of the naira should be somewhere around 700. So, a note of caution to the speculators, as liquidity flows in and the rate comes rapidly down, there is a chance that they could lose their shares, it is just a warning,” Edun said.
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