By Akinsuroju Olubunmi
Stability needed for Naira
The founder of Stanbic IBTC, Atedo Peterside, has emphasized that only sustained stability can help the naira strengthen against the dollar and other foreign currencies. Speaking on Channels Television’s Politics Today on Thursday, Peterside criticized the Federal Government’s hurried approach to bolster the naira, arguing it’s not the best strategy for appreciating the country’s legal tender.
Peterside explained that rushing to improve the exchange rate without ensuring proper stability will not be effective. “I will be fair to this government; they inherited the exchange rate problem and are trying to manage it. Recently, I would have thought, let’s get some stability around N1,300 or N1,400, and not rush to appreciate the exchange rate.”
He elaborated, “Selling dollars to bureau de change at N1,000 or N1,050, only for them to resell at N1,400 or N1,500 later, is pointless. It’s better to maintain a sustainable stability around N1,300, build up reserves, and restore confidence.”
Peterside’s comments come as The PUNCH reported on April 29, 2024, that the naira showed signs of strengthening against the US dollar, appreciating by N125 to N1,275/$1, marking a 9.8 percent increase from the previous week’s rate of N1,400 per dollar. Dollar supply in the official foreign exchange market reached $7.3 billion in March and April.
On Monday, the naira rebounded to N1,390 per dollar in the official market and steadied at N1,340/$ in the parallel market. However, a new Bloomberg report indicated that the naira has recently become the world’s worst-performing currency over the last month, increasing pressure on the Central Bank of Nigeria to raise interest rates.
The naira has depreciated to N1,466.31 against the dollar, its weakest level since March 20, attributed to a local scarcity of the US currency, with only $84 million available on Thursday, half of the previous day’s supply.
naira, stability,
Stability needed for Naira