Reactions have continued to trail Nigeria’s new FOREX policy which liberalized the exchange rate of the naira to the dollar.
With the floating of the naira, there is no longer a peg to the exchange rate or what is termed the official exchange rate, rather what is obtained in Nigeria’s FOREX is a free market of demand and supply determinant of the exchange rate.
The President of the Trade Union Congress of Nigeria TUC, Mr Festus Osifo while commending the government for the action, called for caution. He said that the market should not be let loose for speculators to capitalise on.
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According to Osifo, “We have to be careful because we live in a country where we have so many peculiarities.
“I have done some study and from the body-Trade Union Congress of Nigeria, we have done some releases in the past, and in all these studies we have done, we have realized that no country in the world will allow its currency to just be out there hundred per cent.”
He said that though some speculators could be allowed to “jump in”, what will happen is that “if allowed to tell us wrong the way it is today, the product market may move to 800 in the next few days and when that happens, the official rate will be trailing the parallel market in order for it to catch up.
“So there must be some fundamentals, some parameters must be set in order to ensure that yes; when we are unifying, which we gladly welcome, we must also prevent speculators from allowing our exchange rate to run away because everything in our economy is tied to the estimate”, he said.
Nigeria, he said imports practically everything adding that if the country were to be producing most of her needs locally, it may not have much to be worried about with the present development in the money market.
“What this means is that the value of the exchange rate is what will determine the price of these items in the market.”
The Nigerian Apex Bank, the Central Bank of Nigeria had on Wednesday announced new operational changes to the foreign exchange market in the country.
Emmanuel Ukoh
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