Following the need to make the nation’s foreign exchange market more attractive for Foreign Direct Investments in 2018, stakeholders in the finance sector have tasked the Central Bank of Nigeria to do all within its powers to ensure rates’ harmonisation.
This, according to them, would mean closing the huge gap between the official exchange rate of N306/$ and the parallel market rate of N360/$, as it is a disincentive to genuine investors, particularly the foreign
investors.
A former Managing Director, Unity Bank of Nigeria Plc, Mallam Rislanudeen Muhammad, explained that the exchange rate gap had continued to act as an incentive to round tripping for the banks and a few privileged Nigerians, to the detriment of the economy.
“Foreign exchange market experienced relative stability over most parts of 2017 due largely to improved price of oil and enhanced capacity of the CBN to deal with legitimate demands, thereby reducing tremendously, the incidence of round tripping and arbitrage,” he
said.
Another banker, Mr. Alaba Sotayo, noted that there was still a wide gap between official and black market rates and so long as that existed, round tripping would continue to fester.
“Getting into 2018, CBN should leverage on our improved foreign exchange reserves to close the two markets. That will no doubt restore confidence to the private sector, especially foreign portfolio and direct investors, as well as Diaspora funds,” he said.
