Don urges CBN to sustain intervention in FX market

An economic expert, Prof Uche Uwaleke, on Wednesday urged the Central Bank of Nigeria (CBN) to sustain its intervention in the Forex market as it had resulted in increased supply of Forex in the economy.

Reacting to Naira’s appreciation at the parallel market, Uwaleke said the gap between the official and parallel market Forex rates is narrowing by the day due to improved liquidity in the Forex market engendered by the CBN.

He said the apex bank’s sustained interventions had resulted in improved supply such that some Deposit Money Banks were unable to take up all that was offered by the CBN.

“In the light of the favourable international oil market condition, the CBN interventions in the Forex market should be sustained.”

According to him, as long as the source of the Forex remains chiefly oil, the apex bank should continue to ignore calls to float the naira until the export base of the economy is sufficiently diversified.

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” The recent Forex rules have also resulted in improved access to Forex, especially for invisibles to the extent that banks are now encouraging their customers to come for BTAs etc.

Recall that the apex bank injected another $240 million into the FX market on Tuesday, and as a result, the naira strengthened, exchanging for N390 to a dollar as against the N395 it traded for on Monday, April 3.

Speaking on the intervention, Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria predicted the further appreciation of the Naira as BDCs set to receive more Diaspora remittances.

Gwadabe said that the improved inflows of Diaspora remittances into the economy in spite of falling oil prices would fast-track rates convergence and unification.

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