….Kalu Backs floating of naira

Kalu also said that the floating of the naira to the forces of demand and supply would be in the interest of the country. The Central Bank of Nigeria (CBN) unified the exchange rate into the Investors and Exporters (I&E) window on June 14, allowing market forces to determine the exchange rate. “Fears about floatation […]

Kalu also said that the floating of the naira to the forces of demand and supply would be in the interest of the country.

The Central Bank of Nigeria (CBN) unified the exchange rate into the Investors and Exporters (I&E) window on June 14, allowing market forces to determine the exchange rate.

“Fears about floatation leading to total degradation of the naira are not there. It is inefficiency in production, allocation, saving, investment, and allowing the two sides of exchange to function that is the problem, not the act of floating it,” Kalu said.

He noted that leaving the forces of demand and supply to determine the value of the local currency was the right decision.

While saying that the naira would not necessarily remain at the same exchange rate with the dollar forever, he added that without the demand for dollar, the rate would reduce.

He explained that, “For them, once you devalue, you will never revalue. It is always going the other way around. How can anybody say so? In good harvest, the prices will drop. If the suppliers of foreign exchange have just put it at that price, who is going to be buying it? Whoever is buying it is doing so because he can make a profit. If there is nobody buying it, what is going to sustain it there?”

On the petrol subsidy withdrawal, Kalu said there was no way the federal government could have exhaustively addressed the issues before stopping it.