Oyetunji Abioye with agency report
The Central Bank of Nigeria may
introduce a dual exchange-rate system and weaken the naira when it
unveils a new policy this week, it has been learnt.
Sources, who attended a meeting between
the CBN Governor, Mr. Godwin Emefiele, and top bankers, said the
regulator would probably make an announcement in a circular to banks, Bloomberg reported.
Analysts including those at Renaissance
Capital Limited have said they expect the CBN to allow the naira to
weaken around a trading band in the interbank market, while allocating
dollars at a fixed rate to industries the government deems strategic.
According to the source, the CBN is
still working out details of the system and may reinstate a minimum
holding period for foreign investors buying naira bonds.
Emefiele has faced calls for more than a
year to devalue the currency, as other oil exporters from Russia to
Kazakhstan and Angola have done, amid a rout in crude prices since
mid-2014 to around $50 a barrel.
Investment into Nigeria has shrivelled
as foreigners are put off by capital controls needed to defend the peg,
while local businesses have struggled to import raw materials and
equipment.
The Acting Director, Corporate
Communications, CBN, Mr. Isaac Okoroafor, did not answer calls to his
mobile telephone or reply to a text message requesting comment.
The CBN has held the naira at 197-199
per dollar since March 2015, with Emefiele and President
Muhammadu
Buhari insisting that a weaker currency will leave consumers facing
higher prices.
That has already happened, with
inflation accelerating to an almost six-year high of 13.7 per cent in
April.
The statistics bureau is due to announce figures for May on
Tuesday (today).
The nation’s external reserves have fallen to a more than 10-year low of $26.4bn as the CBN seeks to defend the currency.
An economist and Chief Executive
Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said a dual
exchange-rate policy could be prone to abuse, saying the country had
practised such in the past without much success.
He believes that a largely market-determined single exchange rate system is the best for the country.
“Dual exchange-rate system is a way
forward but it is not the end. We had practised it before but we had to
abandon it. I believe sooner or later we will abandon it if we eventual
adopt it,” he said.
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