Professor of Finance and Capital Market at the Nasarawa State University, Prof. Uche Uwaleke says devaluation of the nation’s currency by the Central Bank of Nigeria (CBN) will discourage round tripping and return of foreign investors.
Prof Uwaleke said in Lagos yesterday that the devaluation would have positive implications for financial markets.
He stated that it would discourage round tripping and other sharp practices associated with multiple
exchange rates in the country.
Uwaleke added that the development would encourage return of foreign investors who left the country’s financial market because of multiple exchange rates.
On the flip side, he noted that the development would have negative implications for inflation and the 2020 budget predicted on N305 per dollar.
However, Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, Prof. Sheriffdeen Tella said the rising but was unfortunate.
news of the naira devaluation was not surprising but was unfortunate.
“The pressure in the foreign exchange market we have witnessed in the last few weeks was not caused by demand for foreign currency to buy inputs for production.
“It’s from people who are trying to hold foreign currency either for speculative purpose for possible travels or to lodge same in their foreign accounts where BVN is not available to reveal their identities.
“So, devaluing the currency will encourage
further speculative attack on the naira.
“Haven emptied the sovereign wealth fund (SWF) account and Excess crude account, the CBN should not have taken this panic measure now that the recession has not taken root in the economy.
“It was a wrong move that was not based on the causal factor of the foreign currency demand pressure,” Tella said.
The CBN had, on March 20 collapsed the multiple exchange rate policy that determined the value of the naira and adopted a single exchange rate.