The latest foreign exchange policy actions of the Central Bank of Nigeria, which avail the market liquidity and seek to alleviate the sufferings of forex users as well as promote efficiency in the market, have elicited reactions from economic analysts and market watchers.
The new policy, though seen by a few as a policy reversal, couldn’t be coming at a better time. This is because the country’s foreign reserves has been on the increase lately, and it is still basking in the success of an oversubscribed $1 billion Eurobond.
Following the success of the $1 billion Eurobond, the Acting President, Yemi Osinbajo, wrote to the National Assembly requesting permission to float another $500 million Eurobond.
The new policy is seen by many as fit for purpose.
In an Interview with Kapital Fm, Former Chief Economic Adviser to President Olusegun Obasanjo, Doctor Magnus Kpakol, has applauded the CBN for the new policy.
According to Doc. Kpakol this is what the market needed.
“Basically what the CBN did was to increase efficiency and to make the market efficient, that is,they are looking for a way to balance demand with supply” he said.
Doc. Kpakol who said the current economic challenges was not as a result of failure of the CBN to make positive policies in the past stated that it was because of the constrains they had.
“We had very little accretion to the amount of reserves that the Country had and that is why we had reserve running to nearly $24 billion range for a long period of time. But now we have climbed to over $30 billion in couple of days ago. So that gives CBN a little bit more leverage and i think they are getting accretion to reserves some where in $700 million a month range and that is pretty good.
“So i think with that they are doing this wholesale auctioning to banks and they want banks to come and partake. So this is a way to make the market more efficient.”
While speaking on the recent drop in dollar rate, Doc. Kpakor said it is a clear sign that the policy is working and this is what Nigerians wanted.
He however attributed the scarcity of dollars in the country to speculations by some people causing those with dollars to sit on it.
He called on citizens to continue to support the Apex bank and the present administration for a purposeful Nigeria.