Central bank governor, Lamido Sanusi is finally acknowledging what I have argued for a while. That the artificial propping of the Naira via the constant depletion of our foreign reserves in the weekly sale of $600-$700 million dollars is neither tenable nor sustainable. All it does is enrich crooked bank and bureau de change operators who secure discounted dollars from the govt. for import facility, but only turn around and sell same at the black market for a hefty margin. While this strategy has artificially stabilized the Naira at between N150-160, it has done so at an obsenely huge cost and soon as oil prices record a sustained slide, the strategy collapses as is now evident. Reducing our balance of payment and balance of trade deficits and curbing our appetite for unnecessary and spurious imports, while better managing our reserves will do more to stabilize the value of the Naira in the long term.
Posted on: Tue, 23 Jul 2013 15:28:02 +0000
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