Rewane tells CBN to allow the naira depreciate to 340/350

Bismarck Rewane, chief executive officer (CEO) of Financial Derivatives, says the Central Bank of Nigeria (CBN)  can intervene in the foreign exchange market, but must resist price fixing.

He said the bank should also allow the naira depreciate to “maybe 340, maybe 350” to reflect a real effective exchange rate.

Speaking to Channels Television on Monday, Rewane said the CBN must avoid fixing price, stating categorically that price fixing will not work.

“The central bank can intervene with whatever the resources they have, but cannot begin to fix prices, price control never works,” Rewane said.

Speaking on IMF warning to Nigeria, after the conclusion of the Article IV consultation process, Rewane said “It is important that the central bank now allows the 305 to depreciate more to where the market is, maybe 340, maybe 350 and then allow everybody…what we call a real effective exchange rate”.

Rewane advised the federal government to keep up engagement with the Niger Delta to keep production levels at near two million barrels per day.

“We must engage the Niger Delta to ensure that prices remain constant at almost two million barrels per day. Two, we have to engage OPEC to ensure that the price stability is maintained,” he said.

“But more importantly is that we cannot be a stop, go economy. We need to take all the steps that are required in terms of appointing boards, making the policies, making sure the budget is passed, making sure the spending…mobilising the contractors, especially power and transport, so that infrastructure spending, which unlock resources will stimulate the economy.

“Most importantly, keep the oil production up, and price, you have no control over pricing.”