A former Deputy Governor of CBN, Dr Tunde Lemo, has urged the Central Bank of Nigeria to abandon the merger of the parallel and official exchange rates.
According to him, the naira is not an internationally convertible currency and a gap of not more than N50 should not worry the apex bank.
CBN had in June this year introduced unification of the Naira as parts of process to curb rising fallen of the currency against the foreign exchange (dollar)
Commending the government for the courage to merge the rates, he stated that the gap had presented huge arbitrage opportunities.
He said, “Unfortunately, dollar scarcity, oil theft, reserve level, previous actions of the CBN (too many rules), outstanding trade’s commodities, capital control, overdue swaps, etc., have dried up liquidity. I advise that policymakers should jettison merging the two rates (naira is not an internationally convertible currency). A gap of not more than N50 should not worry about the CBN.”
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He further stated that there might be some issues with some of the government’s monetary policies.
Lemo stated, “Low interest rate: This is very good to wish, but difficult to deliver in a high and rising inflation environment. Interest rates are high due to monetary and structural reasons and low interest cannot be delivered until we rein in inflation and address structural factors.”
