Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN) on Tuesday said only few people in Nigeria are complaining about lack of access to foreign exchange.
Cardoso, who spoke during his keynote interview at the ongoing Financial Times Africa Summit in London, United Kingdom (UK) added that Nigeria has moved away from the past when the difference between the official and parallel market rates was 60 percent.
“I think the real issue here is that there has been a very wide gap between the official and the parallel market. As at the time I came in, that difference was about 60 percent. Of course, when you have such a wide gap, there is a tendency for the players to want to arbitrage, they buy from one and sell to another. That really was a problem”.
“I think that we’ve used our various tools, including significantly, revamping the foreign exchange system and taking out all the relative distortions to ensure that we can come down to a stage where the difference between the two is minimal to non-existence. To be honest, that is where we want to be”.
“However, many people may not understand this as well. It may well be ‘well, the value of the naira has gone down so much relative to what they were used to before’. My answer to that is to remind people that at the time of 60 percent difference between the official and parallel market rate, not anybody could get the official rate. It was given to a handful and majority had to go to the parallel market but many times, they couldn’t even get it as opposed to now where the market is a lot more deeper, it is working in various forms to get optimum price discovery and it is available”.
Also answering questions on difficulties by foreign companies to move their monies out and local manufacturers unable to get forex, Cardoso said “I think that the complaints of not having access to foreign exchange, frankly are very minimal today. I am sure it happens but I rarely hear of it”.
“ I think the greater complaints is with respect to why are certain things being done this way? Of course the issue of volatility is very critical and that comes up a lot more than we have access to supply. We’ve done a lot of work towards smoothening out and ensuring that volatility is minimised”
“If you look between June and this month, you find that the volatility was relatively minimum. So, I think we are getting closer and closer to the point where volatility will be minimised and we can ensure that the market gets deeper and people can have easier access to their funds”.
