Mixed reactions trail new CBN forex policy

The Central Bank of Nigeria (CBN) on Wednesday, June 15, 2016 formally unveiled the much-awaited flexible foreign exchange policy.

The CBN Governor, Godwin Emefiele, said it would launch a forex interbank trading window that will be purely market-driven beginning from Monday, June 20, 2016.

According to him, there will only be one exchange rate and the Apex bank will intervene in the market “as the need arises.”

This move has attracted reactions from Nigerians in the Federal Capital Territory, Abuja.

Omotola Jide, an Economist described the move as the best thing that would happen to the economy. He believes the decision would ultimately stimulate the domestic economy.

"What the government has done is that it has succeeded in opening the Naira to real trading, creating more investors confidence, better volatility and liquidity. This will surely place Nigeria's economy ahead of that of most African economies.

"Contrary to what most people think, when you let the market determine the value of the naira, it would make Nigerian products cheaper and competing imports more expensive. On the long run, the move will stimulate the domestic economy," he said.

Similarly, Ayo Teriba, an Economist Associate said the action will make the domestic economy more competitive. He however urged the federal government to lift the ban on the 41 items on the prohibition list.

"The move to a market determined exchange rate is a welcomed development. However, If you say its a market-driven economy, why do you exclude particular items?

"It is an exchange not a situation where people part with naira value. We hope that sooner than later, the CBN will do away with the prohibition list and let the market freely work," he said.

READ: Naira: Currency rises against the Dollar

Meanwhile, Rahama Dahiru, the CEO of Rahama Dahiru Bureau de Change expressed concerns that the move may throw him and his colleagues out of business.

"They just want to promote black market where the Naira will be devalued beyond everybody's imagination. It will not help the market. Will the CBN select just ten from the thousands of us or what? Or is it a move to throw the rest of us out of the market? My advice to the government is to allow competition in the market so the economy can grow," he said.

Government sources however declined comments on the issue. When contacted, a Director at the CBN said: "My dear, I can not tell you anything now. You will get more details on Friday and Monday."