L
LequteMan
Guest
President of the Institute of Chartered Accountants of Nigeria, Mr. Chidi Ajaegbu, has urged the Federal Government to urgently address the stability of the naira as several economic variables depended on it.
According to PUNCH, he said the Central Bank of Nigeria needs to review the way it was managing the exchange rate.
“Most of the CBN measures are stop-gap measures. The CBN has raised various ratios and stopped several things. If you are mopping up liquidity in the banking system, you need to convince me that the other side of it is not a better one. The reason for the fear of high liquidity in the system is that there will be high level of demand for the dollar. But to me, the major risk is the translational risk.
“And when you run out of dollars, what will happen? If we continue this way and the oil price keeps going up, we will get to a point that there will be no dollar in the foreign reserves for our imports. So, how do you fund your imports? That is an economic implosion.”
“The oil price is very key because we need to stabilise the exchange rate. We need to do whatever we can to stabilise the exchange rate; that is the only incentive that can make foreign investors to bring in their money here. The foreign investors must be sure that the foreign currency they are bringing in is being constantly protected, and not being eroded by the constant fall in the naira.
"If the issue of the exchange rate stability is not taken care of, we will discover that there won’t be inflow of foreign capital in all the sectors of the economy. And this has very profound implications on our economy.”
#Naira #Dollar #Nigeria #ICAN
According to PUNCH, he said the Central Bank of Nigeria needs to review the way it was managing the exchange rate.
“Most of the CBN measures are stop-gap measures. The CBN has raised various ratios and stopped several things. If you are mopping up liquidity in the banking system, you need to convince me that the other side of it is not a better one. The reason for the fear of high liquidity in the system is that there will be high level of demand for the dollar. But to me, the major risk is the translational risk.
“And when you run out of dollars, what will happen? If we continue this way and the oil price keeps going up, we will get to a point that there will be no dollar in the foreign reserves for our imports. So, how do you fund your imports? That is an economic implosion.”
“The oil price is very key because we need to stabilise the exchange rate. We need to do whatever we can to stabilise the exchange rate; that is the only incentive that can make foreign investors to bring in their money here. The foreign investors must be sure that the foreign currency they are bringing in is being constantly protected, and not being eroded by the constant fall in the naira.
"If the issue of the exchange rate stability is not taken care of, we will discover that there won’t be inflow of foreign capital in all the sectors of the economy. And this has very profound implications on our economy.”
#Naira #Dollar #Nigeria #ICAN
