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Forex: CBN’s Intervention ’ll Revive Economic Growth, Says Dairo

First Bank Nigeria

A Financial Expert and the Principal Partner of AG Fadairo & Co., Mr. Abdul-Ganiyu Dairo, has described the intervention of the Central bank of Nigeria (CBN) in the interbank forex as a step that would stabilise prices and revive the nation’s economic growth.
Dairo, who said this early in the week in Lagos, noted that the CBN’s intervention policy would enable the apex bank achieve its objectives of boosting liquidity in the forex exchange market in addition to reducing the gap between the official and parallel markets’ exchange rates of the naira.
He, however, noted that for the success of the CBN’s intervention to be felt across board, the CBN must constantly monitor, charge and review the returns of the sales of foreign currency expectedly made by the banks and the Bureau De Change (BDC) operators in order to ensure that they do not sabotage the current arrangement that had given breather to the naira and that the set terms and conditions are met.
The Chartered Accountant further stressed that as the apex market had repeatedly explained that it allowed for flexibility to come into play, the market was not expected to be fixed, adding that the market would move based on trend and as a sort of floating market.
Dairo added that the improved implementation of the CBN’s foreign exchange policy had greatly influenced the naira’s recent appreciation, urging that the CBN must sustain its forex intervention until currency convergence was fully achieved.
He also said that with relative peace in the Niger Delta region and an inflow of foreign currency from the nation’s continuous production and exportation of crude oil at reasonable prices at international market, the much expected increase in foreign reserves would afford the CBN the opportunity to sustain its intervention policy.
The Financial Expert stressed that the current drop in inflation figure from 18.72 per cent in January to 17.78 per cent in February had a very significant impact on fixed income securities’ investments in the country as it increased the purchasing power on the return on the investments, adding that the government must, however, improve road infrastructure and networks to enhance the supply of farm-products to the market and also find local alternatives to the imported items in the country in order to checkmate the trend of inflation.
The Chartered Accountant also commended the CBN for its plan to clear all unfilled orders with provision of forex to the manufacturing sector remaining a strong priority and zero allocation/utilization rules on commercial banks as well as implementing an effective intervention programme to support the interbank market to ensure adequate forex liquidity.

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