Financial experts have applauded the Central Bank of Nigeria (CBN) for the clearance of foreign exchange forwards owned multinational institutions in the country.
It could be recalled that the Central Bank of Nigeria (CBN), on Wednesday, took a significant move to eliminate outstanding foreign exchange liabilities by disbursing approximately $2 billion across pivotal sectors.
The key sectors include manufacturing, aviation, and petroleum, a statement said Wednesday.
This intervention which encompasses the complete clearance of liabilities for 14 banks and the initiation of settlements with foreign airlines span across manufacturing and petroleum.
However, in a chat with our Correspondent, the head, Financial Institutions Ratings at Agusto& Co, Ayokunle Olubunmi, said despite numerous economic challenges inherited from past administration, the CBN has been able to stabilise and resolve the knotty issues leading to devaluation of Naira.
According to Ayokunle, the current administration has shown commitment in putting a stop to the slide of the naira, saying the result of the CBN effort in managing the naira would soon be felt by everyone.
“There are a lot of challenges inherited from the past administration and they have resolved it to an appreciable extent but, to me they have tried, however, when you are managing an economy, there’s a lot of give and take and there are no policies you implement that don’t have downside. For instance, some schools of thought said to stop the slide of naira, there should be increase interest rate and if they do that the demand for dollar will reduce but, it will affect the economy.”
“To me, they have tried and I believe we won’t feel the impact of their efforts until they clear the FX forward and we will actually see the impact of what they have done.”
Olubunmi who chided the past CBN administration over the mishandling of the nation’s monetary policies says, the current administration is clearing the mess created for the benefit of the economy.
“They have shown huge commitment to stop the slide of naira because it is an aberration and unheard of that a sovereign country is defaulting in its obligations and unfortunately when there is low supply, there are limitations on how far the country can meet its obligations. That is one of the flaws of Emefiele’s management styles on how he issued FX when there wasn’t enough ability to meet the obligations.
” They have tried despite the significant decline in supply. They have met so much of the FX forward and the full impact of their efforts will be seen in the next couple of months.Also, at the same time, let’s wait till we see the impact let’s wait till they finish clearing the FX forward and like what I gathered they are bringing policies forwards that will help the market.”
