New Telegraph

Rewane: Exchange rate unification inevitable

The Chief Executive Officer (CEO), Financial Derivatives Company (FDC), Mr. Bismarck Rewane, has said that exchange rate unification is “inevitable” for Nigeria.
Speaking on Channels TV business programme monitored in Lagos yesterday, the FDC boss said that given the vulnerability of the economy to the impact of the Coronavirus (Covid-19) pandemic and the slump in oil prices, a unification of the exchange rate was the only wise option available to the country’s authorities.
According to him, “we have no other option but to unify the exchange rate. Lenders are going to insist on it; our commercial partners are going to insist on it; it is good for us. Exchange rate unification is inevitable.”
Rewane’s remarks came amid mounting speculation that the Central Bank of Nigeria (CBN) was getting set to unify the exchange rate.
The speculation follows the release of documents this week, in which the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed that the country would seek to unify its multiple exchange rate regime to generate more local currency from its dollar inflows and manage the rate in a sustainable manner.
Also, citing data from Refinitiv Eikon, Reuters had reported in the last two days that the naira opened weaker at N385 per dollar, but later recovered to N361/$1 on the official market after two trades.
In recent years, the International Monetary Fund (IMF) had advised Nigeria to embrace exchange rate unification.
In fact, in a letter of intent to request $3.4billion emergency financing package from the IMF in April, Nigeria vowed to seek a more flexible and unified naira to respond to the external shock brought by the coronavirus pandemic, leaving foreign-exchange interventions for only when there are large fluctuations.
The letter, which was signed by Ahmed and the CBN Governor, Mr. Godwin Emefiele, said more currency flexibility would help protect dwindling international reserves.

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