Nigerian Presidency: Vice President Yemi Osinbajo Against "Willy-Nilly Devaluation of the Naira"
The Nigerian presidency has denied reports that the country’s Vice President (VP), Yemi Osinbajo, was calling for the devaluation of the local currency when he recently questioned the naira’s official exchange rate. The Huge Arbitrage
In fact, according to a report that quotes Laolu Akande, the VP’s assistant, Osinbajo is against “a willy-nilly devaluation of the naira.” Akande suggests that the media may have taken Osinbajo’s comments out of context. He explained: For context, the Vice President’s point was that currently, the Naira exchange rate benefits only those who can obtain the dollar at N410, some of whom simply turn round and sell to the parallel market at N570.
As regularly reported by Bitcoin.com News, Nigeria’s official exchange rate has remained unchanged since the Central Bank of Nigeria (CBN) last devalued the naira in May 2021. On the other hand, the exchange rate on the black market has grown steadily, hence the existing arbitrage.
Market-Reflective Exchange Rate Needed
According to Akande, it is this growing gap between the two rates that prompted VP Osinbajo to call for an adjustment.
“It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40 per cent profit,” he said.
According to the report, Akande thinks “only a more market reflective exchange rate would ameliorate this.” He suggests that when such a rate is finally adopted, an increase in the supply of dollars is expected to follow, and “the rates will drop and the value of the naira will improve.”
What are your thoughts about this story? Tell us what you think in the comments section below. Putin: Still Early but Crypto Can Be Used for Oil Trade Settlements, Store of Value ECONOMICS | 1 hour ago Zimbabwean Dollar Could Collapse, Business Lobby Warns ECONOMICS | 1 day ago Tags in this story naira black market, naira devaluation, naira exchange rate, naira parallel market, Yemi Osinbajo
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. Read disclaimerShow comments