Inflation: Experts advise CBN to unify forex markets

Centre for the Promotion of Private Enterprise CEO Muda Yusuf has urged the Central Bank of Nigeria to unify the multiple foreign exchange windows to enhance its liquidity and curb inflation.

Mr Yusuf said the apex bank should have a convergence in the foreign exchange market.

“Having a convergence in the foreign exchange market is imperative to attract foreign capital and enhance adequate liquidity. Then the domestic currency will be more stable, and the foreign exchange demand triggering inflation will begin to dip,” he said.

He noted that the CBN could check the inflation rate by reducing its ways and means of economic interventions.

“We cannot expect to fight rising inflation and on the other hand expend trillions of naira in ways and means. The authorities must stop funding the fiscal deficit of the federal government through ways and means, if we are serious in checking the inflation rate,” the financial expert added.

Also, the former Chartered Institute of Bankers of Nigeria (CIBN)’s executive secretary, Okechukwu Unegbu, explained that the tiers of government should ensure to tackle food-induced inflation by adopting modern agric practices.

“Enhancing farmers with improved seedlings and machinery and ensuring that there is relative peace in their domains. Particularly in the Middle Belt of the country, which is a food hub, so as not to disrupt food supplies,” he said.

Mr Unegbu noted that the states should adopt recent innovations in preserving agric yield to reduce post-harvest losses. He also mentioned that President Muhammadu Buhari’s regime must support the growth of domestic manufacturers by addressing some of their structural challenges.

“Associated challenges in the sector such as diesel could be subsidised to enable them to operate at optimal levels. Then, the sector will begin to produce substituted imported goods, thereby boosting domestic capacity,” added the ex-CIBN executive secretary.

Nigeria’s inflation rate in July rose to a 17-year high of 19.64 per cent. This compares to 18.6 per cent recorded in the previous June. 

The latest inflation data is according to the recently released Consumer Price Index (CPI) report for July by the National Bureau of Statistics (NBS). The last time Nigeria’s inflation was above 19.64 per cent was in September 2005. 

(NAN)