CBN Faces Pressure to Stem Naira’s Decline: Calls for Bold Reforms and De-dollarisation
The Nigerian naira experienced a historic low on Friday, closing at N927.19 per dollar in the official market and N1165 per dollar in the parallel market.
The official market witnessed an 11.39% depreciation, closing at N927.19 compared to the previous day’s N832.32. In the parallel market, the exchange rate depreciated by 0.43%, quoted at N1165/$1.
The intraday high for the naira was N1160/$1, with an intraday low of N701/$1, indicating a significant spread of N459/$1. Forex turnover at the official Nigerian Foreign Exchange Market (NAFEM) decreased by 4.57%, closing at $110.14 million.
Amid the free fall of the naira, financial experts are calling on the Central Bank of Nigeria (CBN) to take bold steps to stabilise the economy.
Dr. Biodun Adedipe, founder and chief consultant of B. Adedipe Associates Limited (BAA Consult), suggests de-dollarising the economy by declaring any local transactions in US dollars illegal.
He emphasizes that the CBN should transparently engage with participating banks at the I&E Window and cease government agencies from charging local operators and entities in US dollars.
Adedipe proposes a shift in the sale of crude oil to local refineries, advocating for transactions to be conducted in Naira rather than dollars.
Additionally, he suggests that President Bola Tinubu should directly engage with bank CEOs to generate ideas and use moral suasion to enlist their support for market reforms.
Adedipe stresses the importance of acknowledging the reality that unified exchange rates, akin to floating the Naira, may not be the best policy choice for Nigeria’s structurally defective and weak economy.
Source: Nairametrics
