CBN: Moving against “rentierism”, By Sam Ekpuk

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CBN: Moving against “rentierism”, By Sam Ekpuk
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In coming to grasp with policy optionsfor taming the challenge of multiple exchange rates, CBN must plug Parallel Market Fx demand.

CBN must, therefore, address three policy planks to further support Fx rate convergence and achieve a realistic value of the naira. The first is that CBN must transform from being a supplier to being a trader in the market. It should actively take positions in NAFEX aimed at signaling market direction. It needs to establish Fx trade lines with international financial institutions, allowing her greater access to liquidity and trade volumes.

The ban was preceded by a CBN policy issued mid-May capping cash deposits into domiciliary accounts at $5,000 per bank customer monthly. The policy also contained restrictions regarding outward foreign currency transfers funded by cash lodgments and inter-account foreign currency transfers.

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