Except Nigeria diversifies her economic and increase exportation, the free fall of Naira against major currencies of the world will continue.
This was the submission of former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu while speaking on the way out of current FX crisis in the country.
To Moghalu, a former presidential candidate of the Young Progressive Party in the 2019 election, the value of the naira can fall from the current N570/$1 to N400/$1 within a short period of time at the parallel market if there is a massive rush of dollars into the Nigerian market through export earnings.
“The reason we have the prices we have is that the official rate is perceived by the market not to be the real rate; that’s the fundamental reason why you have a huge gap of N410 at the official rate – Investors and Exporters’ Window – and then N570 in the black market. That is unbelievable.
“Normally, you will have a gap between the official rate and the parallel market but in our time, we made sure that that gap was not a lot – it wasn’t more than N10, N15, max N20.
“What is happening now shows that there is a very fundamental crisis in the Nigerian economy. And unfortunately, the economy does not respond to political commands, the economy does not respond to political statements, the economy does not respond to military orders; the market responds to its own dynamics – demand and supply.
“If you have a massive rush of dollars into the Nigerian market today, the price of the dollar would crash and the naira can come to N400 in the black market, you may be shocked.
“So, it is about going to fix what would bring in the quantity of dollars that would rebalance the equation,” he told Punch in an interview