As Nigerians await the new forex rate which takes effect
tomorrow, experts have predicted that the new interbank forex trading rate will
range between N200 and N210 to the dollar.
The Central Bank of Nigeria announced on Wednesday that it
would remove pegs on the naira to allow market forces to begin to determine the
true value of the currency against other currencies across the world.
At a meeting with CBN officials and bank chief executives at
the weekend, banks requested customers to send them pending letters of credit
(LCs) for them to resubmit and to quote a rate at which they want to buy
dollars, with many of them submitting bids between N190 and 250 to the dollar,
a source said.
The Central Bank had pegged the naira rate at 197 to the
dollar in the last 16 months after a slump in oil revenues hammered public
finances and its foreign reserves. But the currency trades at around 355 on the
parallel market.
According to the CBN, there is a $4 billion backlog of
demand in the market which could take three to four weeks to clear.
However, speaking in separate interviews with The Nation
yesterday, Alhaji Aminu Gwadabe, president, Association of Bureau de Change
Operators in Nigeria (ABCON) and Dr. Frank Jacobs, president of the
Manufacturers Association of Nigeria (MAN) said the new official forex rate was
okay at N210 to the dollar.
According to Gwadabe and Jacobs, the interbank forex rate
would be N210 at the minimum.
Expatiating, Gwadabe who is miffed that the new policy
regime may have practically shut the doors on bureau de change operators, said:
“The present dollar liquidity situation in the economy cannot support the
primary dealer structure, which encourages inflow of dollars from abroad not to
be buying the limited available dollars of the CBN and circulate in the economy.”
Besides, he said the new forex policy was medicine after
death as it has already created cartel and monopoly to select a few in the
financial market.
Gwadabe who hopes the new forex policy would work, said if
allowed to stand as it is it may breed round tripping on the long run.
The ABCON boss who hinted that its members hope to float a
primary market dealership of about $600-700b in the future, said it would
convey an emergency meeting among its members on Tuesday and Thursday to look
for a way out.
In the view of the Lagos Chamber of Commerce and Industry’s
Director- General, Mr. Muda Yusuf, the new FX policy is in line with the
position consistently canvassed by the organised private sector in the past 18
months.
“The policy is a major incentive to exporters as they will
have unfettered access to their export proceeds. Besides, the Federation
Account will benefit from better revenue inflows from the CBN as sale of
subsidised forex comes to an end,” he said.
Speaking on the implication of the new forex policy, a
financial analyst with one of the new generation banks, who asked not to be
named said: “This could be wide-ranging and we will know more as details emerge
after the press briefing. However, we can only but conclude that the end of the
black market is near as anyone and everyone can now buy dollars at any bank or
with authorized dealers at a price that is market determined.”
Experts believe that flexible exchange rate regime could see
the Naira fall temporarily to 380-400/$1USD or spike even higher.
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