– Speculators disappointed as naira strengthens against dollar
for third consecutive day
– IMF persuades President Buhari to remove foreign exchange ban
There is confusion in town over the exchange rate of the dollar
to the Nigerian currency as Bureau De Change (BDC) operators are saying that it
is now N305/dollar.
It was gathered from a reliable source in the foreign exchange
market that the Nigerian currency, up from its steady rise within 48hours, has
risen steadily against the dollar in the wake of President Muhammadu Buhari’s
insistence that he does not support the devaluation of the currency.
Speculators had been shocked by the consecutive rise on Tuesday,
February 23, as they had predicted an all-time rise from the initial N400 (an all-time
low) to about 450/500 in the coming days. There are further speculations that
the amount, up from an initial N364 from Tuesday, is now at N305, while there
are also unconfirmed reports that it may slip further before the end of the
day.
Meanwhile, the International Monetary Fund (IMF) has persuaded
President Buhari to adopt a sound petroleum industry bill (PIB) as well as
expunge restrictions around foreign exchange policy. While the PIB had been in
the works since 2007, it has been dogged by political controversies as well as
opposition to the fiscal terms by international oil companies.
The present administration has adopted a fixed forex policy that
also does not include the allowance of 41 imported items, and this has been
criticised from different quarters. According to The Cable, a statement
detailing IMF observations about the Nigerian economy after its visit in
January, its senior resident representative to Nigeria, Gene Leon, said:
“growth is projected to improve slightly to 3.2 per cent in 2016 but could
rebound to 4.9 per cent in 2017.
“In the light of the significant macroeconomic adjustment that
is needed to address the permanent terms-of-trade shock, it will be important
for Nigeria to put in place an integrated package of policies centred around:
fiscal discipline; reducing external imbalances; further improving efficiency
of the banking sector; and fostering strong implementation of structural
reforms that will enhance.
“The general government
deficit is projected to widen somewhat before improving in 2017, while the
external current account deficit is likely to remain flat at 2.3 percent of
GDP. Growth in credit to the private sector is projected to recover from the
slump in 2015, aiding the increase in activity.
“Key risks to the outlook
include lower-than-budgeted oil prices, shortfalls in non-oil revenues, a
further deterioration in finances of state and local governments, and a
resurgence in security concerns.”
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