As the CBN’s newly appointed governor assumed office, the primary task before the leadership of the apex bank will be to fix the foreign exchange rate as well as stabilize the naira against dollars.
Amid the mounting FX crisis, financial expert, Zeal Akaraiwe, has offered some insights on how the Federal Government can restore the lost confidence back in the market to drive both local and foreign investment.
Akaraiwe on Saturday made this disclosure while speaking on a webinar hosted by Naijaonpoint tagged “Economic Recap of the Current Administration’s First 100 Days.”
According to the financial expert, the first thing the CBN needs to do is to ensure a calculated monetary policy that is centred around transparency as well as confidence in the market. He stated that no investor, whether local or foreign, will infuse capital into a system that lacks liquidity and trust.
He said,
Speaking further, he observed that the CBN monetary policies must prioritize FDI over portfolio investment since the former is geared towards infrastructural development and employment opportunities.
He stated,
Referencing the past foreign exchange reforms that drove economy recovery, Akaraiwe said that CBN must imitate a similar template to resolve the incessant crisis in the market.
Furthermore, the financial expert highlighted certain policy directions the central bank can implement to ensure that the net inflow of FX maintains an upward trend, thus boosting the economy and obliterating the pressure on the naira.
He said,
You cannot restore confidence in the people you owe while you’re still owing them money. We need to find a way to create a transparent system that shows them a sinking fund or a sequential plan to eradicate all the backlog over a period. That will restore confidence
The exchange rate between the naira and dollar quoted for around N1000/$1 on Wednesday evening as forex traders continued to grapple with dollar scarcity.
Naijaonpoint reported on Wednesday that the exchange rate had weakened to N983/$1 in the afternoon.
It is trading for N984 on P2P platforms as of this morning. The exchange rate also closed at N770.7/$1 on the official NIFEX window.
The newly appointed CBN governor and his deputies are set to have before them stabilizing the naira against the dollar and ensuring the inflow of supply in the foreign exchange market.