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‘The exchange rate is artificially low’ — Osinbajo asks CBN to bow to market forces

‘The exchange rate is artificially low’ — Osinbajo asks CBN to bow to market forces
October 11
13:00 2021

Vice-President Yemi Osinbajo has called on the Central Bank of Nigeria to allow the naira reflect the realities of the market. 

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The national currency is changing for N411/$ at the official side of the market but N565/$ at the parallel market, which many believe is reflect of the true value.

Speaking at the midterm retreat of President Muhammadu Buhari’s second term, the vice-president said the exchange rate is artificially low, and this is deterring investors from bringing foreign exchange into the country.

“As for the exchange rate, I think we need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply,” Osinbajo said.

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“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.

“Anyway, all those are issues that when the CBN governor has time to address, he will be able to address in full.”

CBN COMPETING WITH MINISTRIES?

Osinbajo suggested that the central bank is competing with the fiscal side of the economy, which includes the ministries, departments, and agencies of government.

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“There must be synergy between the fiscal and the monetary authority. We must be able to deal with the synergy, we must handle the synergy between the monetary authority, the CBN, and the fiscal side.

“Sometimes, it appears that there is competition, especially on the fiscal side. If you look at some of the interventions, you will find that those interventions are interventions that should be managed by ministries.

“The ministry of industry, trade and investment should handle MSMEs interventions, and we should know what the CBN is doing. In other words, if the CBN is intervening in the MSME sector, it should be with the full cooperation and consent of the ministry of industry.

“Sometimes you will get people who are benefiting more than once because we simply have no line of sight on what is going on, on one side.”

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Speaking on surviving the economic challenge of 2020, Osinbajo said Buhari deserves the credit for providing steady leadership through the crisis.

“Let me say on the whole that we have been able to weather the storm of a very very serious economic challenge.”

“I think that is largely on the steady and stable leadership we received from the president. I think if Mr. President had panicked in that period, we would have had a lot of difficulties, perhaps we would be in a much worse situation.

“He deserves the commendation for providing that steady hand when that was required.”

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Osinbajo said we are at a point in our economic history where anything is possible if the country is willing to work together towards the same objective.

4 Comments

  1. Mehehe
    Mehehe October 11, 20:11

    CBN is under exercising its powers on forex. Instead of the usual cbn determination of forex rate, they allow the parallel market (the mallam) to determine the forex rate. It all bothers on the
    huge fraud in the system. CBN should rise up to the challenges.

    Reply to this comment
  2. Meetdneed
    Meetdneed October 12, 00:08

    The disparity is caused by political class dictating to the CBN and amassing dollar .Now that the thought is from the VP l pray the CBN will be assertive . Right thinking from VP. CBN should face its primary role. Give funds to ministries and monitor

    Reply to this comment
  3. Ibrahim Aliyu
    Ibrahim Aliyu October 12, 06:54

    In my believe is not to discourage Injections to Fixed the Critical Factors.
    Secondly, the CBN Management are not Realistic Economies, let us look into our Agricultural Sectors, less than 10% CBN Interventiins Funds beneficiaries are the ones that can be able to put meaningful things in place, over 90% of them are arrangements and desperadors. No Proper Supervisions, no checks and balances, etc.
    How can Ministers be Supervisors in Roads Projects, Energy/Power Sector, Housing Projects, Transportation Industries? This are Critical Economic Areas, that are supposed to be 100% Released to the Private Sectors, Governmebt should just Regulate them and Support those Sincered Ones on getting Funds to Finances those Projects. This is the only way we can Accomodates Millions of our Nigerian, this are the only ways our Roads and Transport Industies can deliver and provide Millions of New Jobs and Revenues, etc….

    Reply to this comment
  4. Folake
    Folake October 12, 08:57

    Now this is interesting! The VP using the press to attack the ever-faithful sidekick of Buhari (i.e., Emefiele).
    The VP should take his role as chairman of the National Economic Council and bring sanity to the reckless direction the economy is taking. He should stop fuel subsidy and liberalise the exchange rate for starters.

    Reply to this comment

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