Flexible forex guidelines will lead to true value of naira-Experts

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Lagos  –  Two financial experts said on Thursday that the flexible foreign exchange guidelines would lead to a true value of the naira.

Whatapp NewsTelegram News

They told the News Agency of Nigeria (NAN) in Lagos that the forces of demand and supply would put to rest the actual value of the naira.

Mr Sewa Wusu, Head, Research of SCM Ltd., formerly Sterling Capital Ltd., Lagos said that the periodic intervention of the CBN would help the market to adjust.

Wusu added that the parallel market might have to experience a reduction in the rate at which the naira was being exchanged.

Wusu said the beauty of the platform was that it would allow end-users to originate deals for the future.

According to him, the platform will also moderate the rate at which dollar to the naira would be determined.

He added that it would help end-users with high volume of transactions to hedge their trade for the future.

According to him, the situation will now be a two-way quote which will also increase the level of liquidity in the system.

Wusu added that the new guidelines would allow hedging, thereby, give opportunities for planning by organisations.

Also, Mr Wale Abe, former Executive Secretary of the Financial Markets Dealers Association (FMDA) said the guidelines to be operational by June 20 would close the gap between official and black markets.

Abe said that there was no other way to have handled the situation than the CBN did.

He said the development would obviously improve the local production and that the CBN’s decision was an efficient way to allocate the scarce foreign exchange.

He said that regulator could only decide to reverse the situation if only the present challenges improved.

Abe said, for instance, if the price of the crude went up, the apex bank might reverse or adjust the forex policy.

He added that the guidelines would discourage opportunities and discourage corruption. (NAN)

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