Nigeria’s presidential candidate, Peter Obi, said the local currency’s exchange rate against the dollar should not be fixed, but determined “by the forces of supply and demand”.Nigeria Fintech Pointing to the success of the company, Flutterwave, the candidate said his government, if elected, would create an environment for other startups to thrive and thrive as well.
Two-tiered exchange rate regime attacked
Nigeria’s next presidential candidate, Peter Obi, said the current official exchange rate for the local currency is pegged Slightly below N450 per dollar and should be dictated by market forces. Obi, one of his three leading candidates to replace outgoing President Muhammad Buhari, also attacked his two-tiered exchange rate regime now in use.
The Labor candidate’s remarks came just a month after the naira plunged to its worst ever exchange rate against the US dollar.As report According to Bitcoin.com news in late July, the naira had hit an all-time low of N710 per dollar. In response to the rapid depreciation of the naira at the time, the Central Bank of Nigeria (CBN) devalued Naira in May 2021 accused speculators.
Shortly after CBN’s allegations, Nigeria’s anti-corruption agency, the Economic and Financial Crimes Commission (EFCC) got off Currency dealers and currency exchange operators in and around the Wuse Zone 4 area of Abuja. His EFCC raid on currency speculators initially appeared to spur Naira’s recovery. However, more than a month later, Naira’s exchange rate has returned to over his $1700 Naira.
Concept of “contraction monetary policy”
on twitter thread Outlining the country’s plans if he were elected president, Obi proposed a solution that he said could end Naira’s predicament.
The truth is that market forces have not determined the Naira exchange rate for a long time. The two-tier foreign exchange regime is a fluke. I have to finish. Let’s say the exchange rate is determined by the forces of supply and demand. It’s that simple.
In addition to abandoning the fixed exchange rate system, the Labor candidate, when elected, said his government would not use price and wage controls to combat inflation. Instead, it will “pursue a contractionary monetary policy.”
Meanwhile, in the same thread, Obi also promoted Flutterwave, a Nigerian fintech startup. To ensure more startups succeed as well, Obi said the government will “create an environment where startups can thrive.” This is done by implementing a legal framework that protects both “foreign investors and their indigenous partners”.
Sign up for your email here and a weekly update on Africa news will be sent to your inbox.
What are your thoughts on this story? Let us know what you think in the comments section below.
image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. Bitcoin.com It is not intended to provide investment, tax, legal or accounting advice. NEITHER THE COMPANY NOR THE AUTHOR WILL BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY DAMAGE OR LOSS ARISING OR ALLEGED TO OCCUR ARISING OUT OF OR RELATING TO YOUR USE OF OR RELIANCE ON ANY CONTENT, PRODUCTS OR SERVICES DESCRIBED IN THIS ARTICLE. We are not responsible.