Former Deputy Governor of the Central Bank of Nigeria and a former Presidential candidate, Kingsley Moghalu explains how best to drive up the value of Naira as against the dollar in the parallel market from the current N570/$1 to N400/$1. He said this can only happen if there is a massive rush of dollars into the local Nigerian market through export earnings.
The PhD holder in financial economics and still harbouring the ambition of becoming the President of Nigeria someday Kingsley Moghalu proffer this solution while on PUNCH Live Interview on Thursday.
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He said, “The reason we have the prices we have is that the official rate is perceived by the market not to be the real rate; that’s the fundamental reason why you have a huge gap of N410 at the official rate – Investors and Exporters’ Window – and then N570 in the black market. That is unbelievable.
“Normally, you will have a gap between the official rate and the parallel market but in our time, we made sure that that gap was not a lot – it wasn’t more than N10, N15, max N20.
“What is happening now shows that there is a very fundamental crisis in the Nigerian economy. And unfortunately, the economy does not respond to political commands, the economy does not respond to political statements, the economy does not respond to military orders; the market responds to its own dynamics – demand and supply.
“If you have a massive rush of dollars into the Nigerian market today, the price of the dollar would crash and the naira can come to N400 in the black market, you may be shocked.
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“So, it is about going to fix what would bring in the quantity of dollars that would rebalance the equation.”
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