By Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) has been advised to put an end to the current multiple exchange rates’ regime, warning it could frustrate the growth of the country’s economy.
This was the view of former CBN Governor, Mr Charles Soludo, at an event organised by the Institute of Chartered Accountants of Nigeria (ICAN) on Monday in Lagos.
At the moment, Nigeria reportedly has about five exchange rates.
While addressing reporters after the meeting, where he was Chairman of the Economic Discourse, Mr Soludo emphasised that the foreign exchange market must be returned to the competitive exchange rate regime.
However, he commended the apex bank for its intervention in the market, saying “I can see quite some changes in the last few weeks.”
Speaking further, he said, “I think some steps are beginning to be taken, but it is still quite a long way to go to get to a stable and predictable level that eliminates the premium among the multiplicity of exchange rates.”
He challenged the Federal Government and the CBN to ensure the gap between the official and parallel market exchange rates of the Naira was reduced to a maximum of three to five percent.
“Nigeria must get out of multiple exchange rates and we must eliminate the premium, get it back on track at a competitive exchange rate regime.
“The uncertainty that is created by that is so enormous; and with the oil price rising and with the increase in oil earnings, this is the time to take bold steps and do the needful,” he told newsmen at the event.
According to him, “On bold steps, the template is not too far. We have done it before and it is just going back to it. If it (the template) is not broken, why mend it? Get back and eliminate the multiple exchange rate regime, eliminate the premium, or at least significantly reduce it to not more than between three to maximum of five per cent premium between the parallel and official exchange rates.”
He said further that, “On what it takes to do it, that is basically known. Get the public finance okay; I can tell you that with the momentum of what is going on in the rest of the world, by the end of this year, we should actually be having stocks of reserves in the range of about $50 billion or $60 billion.”