Abuja – The Abuja Chamber of Commerce and Industry (ACCI) on Thursday said that the new Foreign Exchange (Forex) policy would attract inflow of foreign currency into the economy and help to end forex crisis in the country.
ACCI’s President, Mr Tony Ejinkeonye, said this in an interview with the News Agency of Nigeria (NAN) in Abuja.
NAN reports that the Central Bank of Nigeria (CBN) had on Wednesday eliminated the official exchange rate and replaced it with a new policy, which is “purely market-driven.”
The new policy will come into effect on Monday.
Ejinkeonye said that ACCI supported CBN on the new guidelines, in line with the objectives of efficiency and facilitating a liquid and transparent foreign exchange market.
According to him, the policy is expected to attract inflow of foreign exchange into the economy thereby helping to relieve the foreign exchange crisis that has plagued Nigeria in the last one year.
“The implications of this new guideline mean that the naira will be devalued, the dual exchange rate regime stands abolished and the exchange rate will be determined by market forces.
“It is expected that the difference between the official and black market rates will be drastically reduced.
“The policy is expected to attract inflow of foreign exchange into the economy and thereby helping to relieve the foreign exchange crisis that has plagued the country in the last one year.’’
Ejinkeonye said that although there was the fear of exchange rate risk of volatility, the flexible exchange rates were automatic stabilisers that could remove the economic frictions, created by a fixed exchange rate.
“In addition, the CBN can implement autonomous monetary policies to address problems with inflation and output.
“Because monetary policies affect inflation rates, CBN can decide on long-run inflation rate and does not have to import the country’s trade partners’ inflation rate, as is the case under a fixed exchange rate,’’ he said. (NAN)