Alhaji Sanusi Lamido Sanusi, a former governor of the Central Bank of Nigeria (CBN) has given his support to the efforts made by the CBN towards the unification of exchange rates. He stated this at a webinar titled “United States of Naira: What price for unification?” hosted by AZA, a currency trading firm.
He advised the apex bank not to go into panic but should wait for the prices of oil to climb in order to rebuild foreign exchange buffers. He also stated that the unification would curb arbitrage in the forex market as well as also making foreign exchange more transparent.
According to him, the avoidance of panic is the only way while also waiting for oil prices to climb up. “CBN has to avoid getting into a panic and basically wait for oil prices to go back up”.
“The CBN is taking too much of a burden for other sectors and other arms of government,” he added.
Further, he warned the apex bank not to deplete external reserves all in a bid to defend the naira. He alluded to the financial crisis of 2008/2009, stating that healthy reserves were what shielded the economy and also helped him implement banking reforms during that period.
Mr Temitope Popoola, the Chief Executive Office, Renaissance Capital Nigeria, who also spoke at the webinar, threw his weight behind the move by the CBN, stating that “before now, we had multiple exchange rates, but there was liquidity. But now, the concern is that we are going towards rate unification, but there is no liquidity”.