The Analysts at Financial Derivatives Company Limited have responded to claims by Godwin Emefiele, the Governor of Central Bank of Nigeria that floating exchange rate is a road to perdition.
The Analysts stated in a Vanguard report that the current multiple exchange rate regime creates an opportunity for arbitrage and can trigger hyperinflation, as experienced by Venezuela. Adding that a unified exchange rate regime would jump-start Nigeria’s economy.
In the defense of the unified exchange rate, the company stated that countries operating multiple exchange rates have been declining since the 90s, stating that a unified exchange rate impacts the economy positively.
The suggestion follows a clash of ideas between CBN’s governor, Emefiele and the presidential candidate of the Peoples Democratic Party, Atiku Abubakar on the floating of the naira.
Atiku’s economic plan as President
Nairametrics had reported that Atiku Abubakar said he’ll float the naira to boost investment in Nigeria, while also stating clearly that if voted President, he intends to relieve Emefiele once his first term ends in June.
According to the PDP presidential flag bearer, Emefiele isn’t doing a good job managing the apex bank, hence the need to remove him once his first term in office comes to an end this year.
“i don’t think he’s pursued the right policies. we have to have the right people in there.” -atiku abubakar
Emefiele’s response to Atiku’s Economic plan
During the bi-monthly Monetary Policy Committee (MPC) meeting in Abuja, Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele criticised the economic plan by Atiku Abubakar, stating that the floating of naira will spell doom for Nigeria’s economy.
Emefiele stated that though the central bank as an independent institution is apolitical, but base on the conclusion of the Monetary Policy Committee members who reviewed the Presidential aspirant’s plan, the floating of naira or allowing importation of restricted goods is a wrong premise.
