CPPE tells Tinubu how to curb volatility of forex market

Amid the volatility in the foreign exchange market, the Centre for the Promotion of Private Enterprise has proffered solutions to President Bola Ahmed Tinubu’s administration.

The Director of CPPE, Dr Muda Yusuf, disclosed this on Sunday, noting that the government should accelerate a sustainable intervention framework to moderate the current situation.

News recalls that the foreign market had been unstable since the Central Bank of Nigeria’s operational reforms were introduced on June 14.

In reaction to the situation, Yusuf stressed that the volatility is naturally unsettling.

He said monetary intervention is needed to avert a possible erosion of investors’ confidence.

“The volatility in the foreign exchange market is naturally unsettling. But it is not unexpected given the long distortions in the foreign exchange market. Correcting the entrenched distortions would take some time.

“But in the meantime, the monetary authorities should develop a sustainable intervention framework to ensure the moderation of current volatility in the forex market. We recognize the forex supply limitations, but the system needs to be managed not to undermine investors’ confidence. Erosion of confidence triggers speculation and influences expectations, triggering diverse responses among economic players,” he stated.

Yusuf urged that CBN should reduce the money supply and take steps to curb subsequent expansion.

He added that CBN should protect the forex market from speculative assault and illicit capital outflows.