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Make closure of forex windows temporary –Okonta

Okonta said yesterday in Abuja that while the strategy might rid the market of the disruption of two exchange rates with its attendant possible speculative…

Okonta said yesterday in Abuja that while the strategy might rid the market of the disruption of two exchange rates with its attendant possible speculative attacks on the Naira and arbitrage, government should pursue permanent platforms such as enhancing revenues from non-oil exports.
The present strategy, he said, would exert undue pressure on the already weak Naira as all demands would now be channelled to the parallel and interbank markets.
Okonta expressed regret that following the wide margin between the official rates and the parallel and interbank rates, it becomes more lucrative for eligible buyers to engage in arbitrage instead of importing the goods for which they had supposedly bought their foreign exchange from the official window in the Central Bank of Nigeria.
“There is no doubt that the closure of the official forex windows will curb undesirable practices such as round-tripping, speculative demand and rent seeking. However, despite these amorphous benefits, the CBN should continue to monitor closely, happenings in the interbank markets failing which the weakness of the Naira will become very severe and out of control”, he said.

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