Economist tasks banks on sale of forex

By Aanu Olaleye with News Agency

An economist, Prof. Sheriffdeen Tella, on Tuesday urged commercial banks to legitimately sell Foreign Exchange (Forex) to customers to enable the exchange rate of the naira to the dollar appreciate.

Tella, a Professor of Economics at the Olabisi Onabanjo University Ago-Iwoye, Ogun State, gave the advice in an interview with the News Agency of Nigeria (NAN) in Lagos.

He spoke on the heels of stoppage of supply of forex to Bureau De Change (BDC) operators by the Central Bank of Nigeria.

According to him, what we are seeing happening now, is depreciation which is expected.

The  most recent exchange rate of the Naira to the dollar at FCMB as of Aug. 3, is 455, as against the lowest value of 440 at GTBank on Aug.2.

“At the initial stage that we are, the exchange rate will depreciate because there will be hoarding of forex by BDCs and panic demand by industries and other importers.

“After some weeks, the dust will settle, CBN will come up with further directives on the modus operandi, improving foreign currency inflow and with the banks playing their roles properly, the exchange rate will appreciate,” he said.

On CBN’s plan to kick-start a digital currency, e-naira by October, the professor said it was good that the apex bank planned to come up with a pilot stage to precede the full adoption.

He advised that there should be full understanding of the project by CBN staff, for proper monitoring of the effects on monetary policy.

“Even managers of developed economies with well developed financial system are still cautious,” Tella said.