CPPE requests CBN to take measures to stabilize exchange rates

CPPE requests CBN to take measures to stabilize exchange rates

The Center for the Promotion of Private Enterprise (CPPE) has called on the Central Bank of Nigeria to take identified measures to reduce pressure on the foreign exchange market.

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, gave this advice in an interview with the News Agency of Nigeria (NAN) in Lagos on Friday.

Mr. Yusuf spoke on ways to improve liquidity and stabilize the foreign exchange market.

“Under the new leadership, the CBN has taken several steps to clear the backlog, which also affected some banks. We know that up to 70% of the backlog has been cleared.

“So this was a big step forward for me to regain confidence in the foreign exchange market.

“We have also heard about other steps the CBN is taking in collaboration with fiscal authorities to mobilize more liquidity.

“For example, we were informed of the decision to securitize the dividends from Nigeria’s liquefied natural gas, through which some banks would provide us with additional funding in terms of foreign exchange.

“Then there was a decision on the forward sale of crude oil by NNPC. Also, the government was planning something to raise dollars in collaboration with AFREXIM Bank.

“Efforts are also being made to improve the export of crude oil, because if you can improve the production, you will definitely improve the inflow of foreign exchange. So these are measures taken that should have an effect.” he stated.

The head of CPPE expressed concern about delays in achieving concrete results.

He said, “How quickly these things start to turn into concrete results is another story.At the very least, clearing some of the backlog will have some impact on the naira, and it will also have an impact on the market.” I found out that

“How sustainable they will be is again very difficult to predict and it will depend on how much success governments can achieve.”

“So the important thing is that if we can move forward or succeed in some of the initiatives that we have outlined, we will start to see more sustainable stability in the market.

“It depends on how much profit we can make, but the fact is that efforts are being made and the president is also traveling around the world encouraging investors to come.

“If it is successful, there will of course be some inflow into the economy, but it could be in the medium to long term.”

Speaking on inflation, Yusuf pointed out that food inflation is influenced by foreign exchange and is controlled.

He added that there is a strong relationship between exchange rates and inflation.

According to him, if the exchange rate can be stabilized, inflation can be reduced.

“As the economy is highly dependent on imports, it is very sensitive to developments in the foreign exchange market, so any depreciation in the currency will always lead to higher inflation.

Source: guardian.ng

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