A financial expert, Dr Uche Uwaleke, said the country needed to grow its foreign exchange reserves to at least $32 billion to have convergence between the official and the parallel market prices.
Uwaleke, an associate Professor, Department of Banking, Nasarawa State University told the News Agency of Nigeria (NAN) on Tuesday in Sokoto that gap in the two market was because of the disequilibrium in the two makers.
He told NAN that if foreign exchange earned by exporters continued to be less than the demand by importers, the disequilibrium would make floating of the currency difficult to achieve.
Uwaleke said that the new foreign exchange policy could still be circumvented if not well implemented and managed.
He said that Nigeria being an import dependent structure economy had made the demand for dollars higher than supply.
He noted that the restrictions on 41 items not eligible for forex should remain until the country’s productive and export base was sufficiently diversified.
On the market determining the value of the naira, he said the supply of foreign exchange was not yet enough to be left to the market forces.
The economist, however urged the monetary authorities not to allow pressure affect its decision of the forex management.
He cited Egypt as a country that had similar challenges but allowed pressure to affect its currency which was devalued more than it should have been.
Uwaleke said, “If we don’t have this 32 billion dollars we shouldn’t be thinking of floating the currency.”
“Egypt was advised not to float the currency until they got to $25billion reserve. It did because of pressure and in a hurry to get a 12 billion dollar IMF loan.
“Egypt did the currency float much earlier and has now seen the outcome. So when people say Nigeria should float, why don’t we look at what happened elsewhere.”
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