Monetary and fiscal policy makers in Nigeria have been advised to address fundamental issues affecting the pricing of the naira at both the parallel and official markets to narrow the gap between the two segments and bring about stability in the market.
An Investment Analyst, Omotola Abimbola, gave the advice on the backdrop of the recent decision by the Central bank of Nigeria to increase weekly forex sales to Bureau De Change operators to fifty thousand dollars from thirty thousand dollars.
According to Abimbola, the decision alone is not enough to significantly alter the trading band of the naira in the short term.
“What we need is the return of autonomous capital into the foreign exchange market not the CBN trying to supply dollars to the BDC’s again and these autonomous capital inflows are not going to come unless we coordinate our policy action in the country efficiently so this is what the policy makers should be focusing on at the moment”, he said.
The investment banker also emphasised the fundamental of confidence in the macro-economy as key to the revival of the value of the naira.
According to him, “there still seems to be a lack of faith in policy making in the country at the moment, so if the policy makers could coordinate together to ensure that they harmonize their policies and ensure that investors have faith in the policies, maybe that might be enough to start attracting the much more needed foreign capital inflows into the country”.
The Central Bank of Nigeria increased the weekly supply of Bureau De Change operators from licensed banks from 30,000 dollars to 50,000 dollars saying that the increase was necessary based on the present prevailing circumstances where the available Forex in the market was not sufficient to meet the needs of Nigeria.