During an appearance on Channels Television’s Politics Today, Atedo Peterside, the founder of Stanbic IBTC, emphasized the crucial role of sustained stability in driving the naira’s hope against foreign currencies. He cautioned against the Federal Government’s hasty attempts to strengthen the naira, stressing that stability is essential for enduring outcomes. Peterside underscored this viewpoint, stating that attempting to artificially boost the currency’s value without ensuring stability would be counterproductive.
While acknowledging the government’s efforts to address the exchange rate challenges inherited from previous administrations, Peterside warned against rushing to inflate the naira’s value. Instead, he advocated for maintaining a stable exchange rate within a reasonable range, such as between N1,300 and N1,400. This, he argued, would instill confidence and enhance reserves, criticizing the practice of selling dollars to bureau de change operators at lower rates only for them to resell at inflated prices.
Recent reports highlight the fluctuating performance of the naira against the US dollar. On April 29, 2024, the naira showed signs of strengthening, appreciating by N125 to reach N1,275/$1. Despite this positive development, the naira’s value suffered a setback, emerging as the worst-performing currency globally in the past month, according to a new Bloomberg report.
The fluctuating performance of the naira has heightened pressure on the Central Bank of Nigeria to take decisive action. With the currency depreciating to 1,466.31 against the dollar, the CBN faces challenges in maintaining stability amid a local scarcity of the US currency. Daily supply figures indicate a significant decrease, with only $84 million available on a recent Thursday, reflecting ongoing volatility in the foreign exchange market.
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