Having a stabilised Naira currency and well-regulated inflation rates in Nigeria is a goal that has proven to possess traits that require the herculean approach to accomplish.
Yet, to achieve these great objectives over time, there have been series of suggestions from industry experts recommending ways out of the nation’s present predicaments regarding matters affecting the economy.
Similarly, in a non-relenting effort recently made by financial expert Okechukwu Unegbu, formerly the president of the Chartered Institute of Bankers of Nigeria, CIBN, he reiterates some of the needed steps be considered by the Central Bank of Nigeria, CBN, and in extension, the Federal Government.
Before his suggestions, Unegbu lamented over the hike in commodities across various states of the nation. He said the inflation rate is still high, and the interest rate keeps fluctuating, adding that the foreign exchange market is currently the worst and affecting Nigeria’s economy negatively.
According to him, a dollar is almost a par with five hundred Naira in Nigeria, stressing that the only little compensation is citizens can still afford a decent meal of rice, beans and even beef for that price.
The Irony of the whole situation, he further explained, is that, in the United States of America, a dollar cannot purchase something of immense value when juxtaposed with what is obtainable in Nigeria with the equivalent of the Naira currency.
However, there’s a meeting scheduled for two days, 26 and 27 of July 2021. Expressing his contempt for tea-cup gatherings such as the CBN Monetary Policy Committee, MPC, meeting, Unegbu spoke against the background of the event.
He pointed out that the depreciation of the Naira had become incomprehensible considering specific indices that were supposed to strengthen and stabilise the currency.
Stabilising Naira, Inflation Rates: Financial Expert Suggests 7 Options
- On stabilising the Naira and Inflation Rates in Nigeria, the Financial Expert, Mr Unegbu, urged the CBN Monetary Policy Committee, MPC, to focus on policy decisions that would check rising inflation and stabilise the Naira.
- Unegbu urged CBN’s MPC to carry out a proper assessment and determine the right moves to strengthen and stabilise Naira note.
- He advised the MPC to do a comparative analysis to know the effect of their parameters on the economy, having retained the exact measurements about six times now.
- Considering the recent surge in the price of crude oil, internationally speaking, including the steady entry of the large remittances from the diaspora into the nation’s economy, Nigeria is expected to have a stable and competitive currency ratio in the foreign exchange market.
- The past President of the Chartered Institute of Bankers of Nigeria, CIBN, also urged the committee to consider the rising case of unemployment and develop concrete policies to address the sector’s challenges.
- Okechukwu Unegbu further suggested that the committee endeavour and consider applying the present positive increase in the cost of crude oil, foreign payments on boosting the country’s Gross Domestic Product, GDP and the economy on a larger scale.
- Also, he recommended that the CBN’s Committee must ensure they consider partly addressing the level of unemployment in the nation. He said the agency is mandated to manage the economy and guide the present administration on similar matters.
Highlighting some of the areas that need improvements to better the Nigerian Economy, Unegbu pointed out that the MPC decided to retain the current Monetary Policy Rate, MPR, which is placed at 11.5 per cent, including other related benchmarks.
After that, he noted that the committee decided to keep the asymmetric corridor at +100/-700 basis points around the MPR; Cash Reserve Ratio, CRR at 27.5 per cent and Liquidity Ratio at 30 per cent.
Lastly, part of the main point here is that the continuous devaluation of the Naira note would not equate it to the dollar. This concept has proven to negatively impact the country’s inflation rate and regularly destabilise Naira against other foreign currencies, leaving it valueless.