August 17, (THEWILL) – The Chartered Institute of Bankers of Nigeria (CIBN) has said that the foreign exchange reform introduced by the Central Bank of Nigeria (CB) which involves floating the naira, is unsuitable for economic development.
In a press conference to kick off its 2023 Lagos Bankers nite themed in Lagos themed ‘Exchange rate unification: Global implications for households, organisations and the country’, and slated for August 18, 2023, the Lagos State branch chairman, CIBN, Mr. Adeyemo Adeoye, said, the policy to float the naira was counterproductive.
According to him, rather than allow a free floating of the naira to demand and supply, the country should adopt what he termed as ‘managed floating’, warning that the free floating model would make the naira less effective since the model is basically based on speculation
He observed that prior to the unification policy, the difference between the official and parallel market was about N20 which has risen to over N200.
“In other climes, they reduce the supply of currency in the nation, by increasing the reserve ratio of banks. Naturally, you will see the impact on the value of the currency, but we have a peculiar economy here where the rate between the parallel market and the official market is about five per cent in other developed economies, but it is about 80 per cent in Nigeria,” he said.
He, however, urged the Tinubu -led administration to look inward by prioritising investment to boost the nation’s productive sectors.
Speaking on the Bankers ‘ Nite, he said, the annual event has over the years, been an epitome of social gathering for high profile Bankers in Lagos state, financial industry leaders, key stakeholders in the Nigerian economy, captains of industries and topmost opinion leaders in the society.
“It is an annual event where major financial policies are reviewed and, new focus articulated. With well over 500 high profile banking/financial practitioners and other Institutions in attendance, the 2023 Lagos Bankers’ Nite provides an ample avenue for effective networking and a platform for collating and aggregating ideas that could form key inputs that can help the government navigate the prevailing exchange rate management process,” he said.
“As one of our significant stakeholders, with whom we have formed key partnerships with over the years, we want to encourage you to give this event maximum publicity and mentions, so that more Nigerians can benefit from this important event, in view of the current economic situation,” the bankers’ group boss stated.
The new forex policy was announced on June 14, 2023.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
