Following the closure of the official foreign exchange window by the Central Bank of Nigeria (CBN) yesterday, analysts have lauded the move which they say would not only curtail the excesses in the foreign exchange market but would also reduce pressure on the naira.
Analysts at FBN Capital said it was a necessary one towards ensuring that the naira stabilises and reflects demand and supply dynamics, and should assist in improving market depth and efficiency.
The managing director of Sabil BDC, Aminu Gwadabe, affirmed that CBN’s policy to close the exchange windows was a move in the right direction, as this would help stabilise the rate in the market in as much as the apex bank would continue to intervene in the interbank foreign exchange market.
He noted that the immediate implementation of the policy would restore fiscal discipline, which would dissuade banks from sharp practices of speculating and round-tripping as major players in the market.
Likewise, analysts at Financial Derivatives Company Limited believed that with the closure, the cost of imported raw materials would increase as profit margins of companies would be compressed.
Head of African Research at Standard Chartered, Razia Khan on her own part stated that the CBN’s decision was a positive news, and should help create more transparency in the Nigerian market.
However, she noted that with oil prices currently at levels where forex reserves would be difficult to replenish, the CBN’s appetite for continued support of the interbank forex rate would be closely monitored.
To the managing director and chief executive of Financial Derivatives Limited, Bismarck Rewane, the development was commendable, as the measure would now make naira to be convertible and acceptable across the borders of the country.
Leadership News – Culled from http://leadership.ng/business/412834/experts-laud-closure-of-official-forex-window-by-cbn