Ex-CBN Deputy Governor Lemo Speaks on Tinubu's Exchange Rates Unification as Gap Widens to N192

• A former CBN deputy governor has requested that the idea of unifying exchange rates be discarded
• The apex bank, led by acting CBN Governor Folashodun Shonubi, under Tinubu's leadership, has implemented various policies to close the gap with the black market
• Despite the policies, there is still a considerable gap between the official and unofficial forex market rates

The Central Bank of Nigeria (CBN) has been asked to abandon its plan to merge the parallel and official exchange rates.

The call comes from a former Deputy Governor of CBN, Dr Tunde Lemo, who believes the focus should be on addressing inflation and other structural factors.

Lemo made the call while speaking at the Lagos Business School, the Punch reports.

Jettison merging the two rates - Lemo

The ex-CBN deputy governor explained that the naira is not an internationally convertible currency and a gap of not more than N50 should not worry the apex bank.

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He, however, commended the effort of the Tinubu administration to merge the rates.

His words:

“Unfortunately, dollar scarcity, oil theft, reserve level, previous actions of the CBN (too many rules), outstanding trade commodities, capital control, overdue swaps, etc., have dried up liquidity.

"I advise policymakers to jettison merging the two rates (naira is not an internationally convertible currency). A gap of not more than N50 should not worry about the CBN.”

Issues with government’s monetary policies

He also added that there might be some issues with some of the government’s monetary policies, noting that the gap had presented substantial arbitrage opportunities.

Lemo stated:

"Desiring low-interest rates is a commendable aspiration, but it becomes challenging to achieve within a context of high and escalating inflation.

"Interest rates remain elevated due to both monetary and structural factors, and achieving lower interest rates it is import to first stop rising inflation and addressing these structural issues."

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Naira to dollar exchange rates

The ex-CBN governor's call is coming at a time when the exchange rate gap between the black and official markets widened on Friday, September 8, 2023.

Data from FMDQ securities revealed that the naira closed in the official market at N736.62/$1.

While in the Peer to Peer market, the domestic currency traded at N933/$1 and in the black market at N929/$1.

This indicates an exchange rate gap of N192.38 compared to the N50 proposed by Tunde Lemo.

Pastor Adeboye predicts naira's glorious days will return

Meanwhile, in another report, the General Overseer of the Redeemed Christian Church of God, Pastor Enoch Adeboye, predicted that the naira would bounce back against the dollar.

Adeboye gave this prediction during his church’s monthly Thanksgiving service with the theme; ‘Uncommon Miracles’ on Sunday, September 3, 2023.

He told his congregation not to worry, assuring them that the naira's glorious days would return.

Source: Legit.ng