According to him, the best approach would be for the central bank to stabilize the naira to a level where they can sustain it for some time and gradually build the reserve.
The founder of Stanbic IBTC and ANAP Foundation, Atedo Peterside, says the urgency with which the President Bola Tinubu-led administration wants the naira to appreciate against the dollar and other foreign currencies is not the best approach to return the currency to a stronger position.
Peterside, on Thursday, exonerated the current administration from the depreciation of naira, but insists that hurrying to make the currency gain strength won’t work out.
According to him, the best approach would be for the central bank to stabilize the naira to a level where they can sustain it for some time and gradually build the reserve.
“I will be fair to this government, they inherited the exchange rate problem and what they have been doing is trying to manage it. Recently I would have thought, let’s get some stability around N1,300 or N1,400, don’t be in a hurry to appreciate the exchange rate.
“Going to sell dollar to bureau de change at N1,000, N1,050, those guys will turn round two weeks later and sell it at N1,400, N1,500 and they go away laughing. What’s the point for that?
“It’s better to have some stability they can sustain, keep between N1,300 and N1,300 which looks to be the natural equilibrium band today, keep it there for a while, build up your reserve to let confidence come back.
“So stop trying to appreciate the naira in a hurry, it’s not going to work,” Peterside said.
The naira which had earlier fallen to around 1,900 to a dollar later rallied to around 1,100 which saw it recently declared as the best-performing currency in the world.
However, the naira has again retreated to around 1,500 to a dollar in the black market.
He also advised the government should start doing things right to build confidence among investors and stop reckless spending that will make them look irresponsible.
According to him, the habit of doing five things right and doing two things wrong will not help the government achieve anything tangible.
The economist said that the direction of Tinubu’s monetary policy is on the right track but what is on the wrong track is the huge fiscal indiscipline that comes from the top now and again.
Source: Channels Newspaper