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Renowned economist, Bismarck Rewane, has dismissed claims suggesting that Nigeria’s currency is cursed, instead explaining that the naira is merely undergoing a transition.
Speaking on Channels Television’s Politics Today, the Managing Director of Financial Derivatives Company Limited addressed concerns amid widespread discussions about the naira’s devaluation and the Central Bank of Nigeria’s recent clarification that there are no plans to convert domiciliary account holdings worth $30 billion into naira. Rewane acknowledged the challenges facing the Nigerian economy but emphasized that the situation with the naira does not have a one-size-fits-all solution. He said, “No, I don’t think the naira is jinxed. It is just a currency in transition. And you can see that in 2016, it was N499 per dollar. As of this afternoon (Monday), it was N1,468. It had dropped to N1,531 per dollar sometime last week and started finding its way back. “So, we have tough days ahead. But the point is that you have to look at it in the context of the currency in transition to weigh its fair value. “Some of the problems are structural, some are transit. So we have to understand it in that context. But you know that the fundamental problem with the naira is that any country that has high inflation and cost of living crisis will always have a weak currency. “To address that, you have to look at it from a broad perspective. It is not one silver bullet that can solve all problems.” Rewane added that, “For instance, in 2004, it was $1.70 that will give you one pound. Today, it is about $1.27 that gives one pound. We have three types of systems. “We have the fixed, floating and management exchange rates. In the world, 38 per cent of the currencies are called flexible exchange rates. Another 35 per cent is what you call the floating rate.”
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