Bitcoin News Hubb
Advertisement
  • Home
  • News
  • Bitcoin Market
  • Cryptocurrency
  • Contact us
No Result
View All Result
  • Home
  • News
  • Bitcoin Market
  • Cryptocurrency
  • Contact us
No Result
View All Result
Bitcoin News Hubb
No Result
View All Result
Home Bitcoin Market

Nigerian Central Bank Told to Consider Floating the Naira, Recent Interest Rate Hike Slammed – Bitcoin News

admin by admin
August 2, 2022
in Bitcoin Market


The Central Bank of Nigeria should be discontinuing the fixed exchange rate system and let the naira freely float against the major currencies, Alhaji Aminu Gwadabe, the leader of a Nigerian association of bureau de change operators has said. The leader also slammed the recent adjustment of the central bank’s interest rate to 13%, which he said could have a negative impact on Nigeria’s underperforming economy.

Central Bank Told to Intervene to Save the Naira

The leader of a Nigerian association of bureau de change operators, Alhaji Aminu Gwadabe, has urged the country’s monetary authorities to consider allowing the local currency to freely float against the U.S. dollar. According to Gwadabe, doing this will help to prevent further depreciation of the naira.

In an interview with the News Agency of Nigeria, Gwadabe is also quoted advising the Central Bank of Nigeria (CBN) to consider intervening in foreign exchange markets. He reportedly said:

CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin. Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira.

Gwadabe also reportedly said the CBN could still make a profit through a buyback of the dollars on the open market.

The comments by Gwadabe, whose organization’s members were previously accused of fueling the naira’s freefall on parallel forex markets, followed recent reports of the naira’s plunge and the CBN’s subsequent call on Nigerians to stop using the greenback for speculative purposes. With the latest plunge, the naira’s parallel market exchange rate of slightly over N700 for every dollar versus the official exchange rate of N424 implies the currency may be overvalued by nearly 70%.

Cashing Out Remittances in Dollars Exerts Pressure on Naira

Meanwhile, the News Agency of Nigeria report also quotes Gwadabe questioning the CBN’s decision to adjust the monetary policy rate (MPR) to 13% per annum. According to Gwadabe, the adjustment is likely to have a negative impact on Nigeria’s underperforming economy.

“Increasing the MPR contracts the supply side, it is the wrong prescription. Let’s not copy the Americans who target inflation with FED rates to curb money supply; their factors of production have been fully mobilized, ours is at less than 20 per cent and requires stimulation of the supply side,” Gwadabe is quoted explaining.

Instead of hiking the rate, Gwadabe recommended cutting the rate to 5% which he said “looks more appropriate.”

Concerning the CBN’s decision to allow recipients of remittances to cash out in dollars, Gwadabe claimed this “fuels currency substitution.” Besides exerting more pressure on the exchange rate and inflation, this central bank policy “does not have a statutory backing unlike domiciliary accounts, therefore, it is illegal.”

Gwadabe also claimed that the solution to Nigeria’s currency woes “has to be psychological too” because the current “panic buying is driven more by psychology and less by economic fundamentals.”

Register your email here to get a weekly update on African news sent to your inbox:

What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.














Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

More Popular News

In Case You Missed It





Source link

Previous Post

Binance US set to delist AMP token after SEC terms it a security

Next Post

Meet the Crypto and NFT Projects Making a Social Impact

Next Post

Meet the Crypto and NFT Projects Making a Social Impact

Recommended

What will cryptocurrency market look like in 2027? Here are 5 predictions

August 6, 2022

FediMint Adds New Bitcoin Custody Solutions – Bitcoin Magazine

July 27, 2022

Don't miss it

Bitcoin Market

Cleanspark Acquires Plug-in-Ready Bitcoin Mining Facility With up to 86 MW of Capacity – Mining Bitcoin News

August 9, 2022
Bitcoin Market

Billionaire Mike Novogratz Says Bitcoin At $30,000 Is Unlikely

August 9, 2022
News

MetaverseGo raises $4.2 million in funding round

August 9, 2022
News

Features & Benefits of ICO Script – You Should Know!!!

August 9, 2022
Cryptocurrency

Total value locked in DeFi dropped by 66%, but multiple metrics reflect steady growth

August 9, 2022
Cryptocurrency

What The Impending “Triple Halvening” Means For The Future Of Ethereum

August 9, 2022

Bitcoin-White

© 2022 Bitcoin News Hubb All rights reserved.

Use of these names, logos, and brands does not imply endorsement unless specified. By using this site, you agree to the Privacy Policy.

Navigate Site

  • Home
  • News
  • Bitcoin Market
  • Cryptocurrency
  • Contact us

Newsletter Sign Up

No Result
View All Result
  • Home
  • News
  • Bitcoin Market
  • Cryptocurrency
  • Contact us

© 2022 Bitcoin News Hubb All rights reserved.