A former Minister of Education, Oby Ezekwesili has accused the Central bank of Nigeria of being overly obsessed with the nominal rate of the naira, thus neglecting the currency’s real exchange rate.
Ezekwesili, also a former Vice President of the World Bank, while reacting to CBN’s decision to sell forex to Bureau De Change operators twice weekly, said the worst FX Policy is when monetary authorities play to the gallery of their Political authority to make Nominal Value the issue.
“Rather than a sound focus on the REAL Exchange Rate of the Naira, there is unhealthy and unwholesome obsession with its Nominal Rate,” she added.
She said every Currency that goes up can come down through a sound monetary policy, adding that however, every Currency that comes down by force will go up.
Recall that at the weekend, the CBN had in a release signed by its acting director of corporate communication, Isaac Okorafor, announced that it would commence twice weekly sales to BDCs, effective from Monday, April 3.
Earlier on Sunday, Mr. Okorafor had said the CBN would disabuse the notion by some market speculators that it would not be able to sustain its FOREX intervention efforts, adding that the apex bank would again inject more foreign exchange into the market early this week in an attempt to further strengthen the naira.
Meanwhile, Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON) has said that the naira will soon bounce to glory as BDCs are set to receive more Diaspora remittances.
According to him, the increased inflows will help the CBN to address the dwindling confidence of foreign investors in assuring them of meeting the liquidity needs of the BDC sub-sector rather than that of the inter-bank market.
“The impacts of this development will afford the CBN to glut the BDCs sub-sector for a better rates stabilisation,’’ Gwadabe said.
The association’s president urged currency hoarders and speculators to stay away from their nefarious activities as the naira would soon rebound to glory.