Naira can appreciate below ₦1,200/$ with CBN right policies – Rewane
The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, has expressed optimism that the appreciation of the naira against the United States dollar is sustainable.
During the week, the naira went on a stellar run, gaining over ₦500 on the dollar. This development marked a significant leap for the nation’s currency, which went on a spiral downfall following reforms by the Central Bank of Nigeria (CBN).
While various factors have been attributed to the positive run, many citizens remain unconvinced about sustainability and have expressed their worries accordingly.
But Rewane has looked on the bright side and identified measures to help the naira gain more strength.
Speaking on Channels Television‘s Politics Today programme during the week, the foremost economist said with the right policies and implementation by the CBN, the naira will continue to grow in leaps and bounds.
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He said, “The truth is that it’s sustainable as long as you do a number of things and I was going to go come to that. The first is that interest rates have been increased therefore the propensity to save has increased and the propensity to consume has actually reduced. People are consuming less and actually saving more if they are saving.
“The government itself is consuming less and actually saving. You heard that there’s a ban on travel. For the optics of it, at the same time there’s a lot of waste in government, there’s a lot of leakages in government, there’s a lot of mismanagement of things but these are early days.”
Rewane said even though projections have shown that the naira could get to ₦1,200, his company’s analysis showed that it could even do better.
“The fact that you have moved from N1,915 to ₦1,475 and Goldman Sachs’ Standard Chart is saying that it will get to ₦1,200. Our own analysis shows that it could even do better as long as you do those things: one, you refinance your existing debt, you take care of the ways and means and you do not need these kinds of distractions like what’s happening in Delta State; those kind of conflicts and misunderstandings and insurgency which will disrupt the oil pipelines and reduce our oil cash flow is what we don’t need at all,” the renowned economist said.