Explore calm in forex to control inflation, chamber urges CBN

The Nigerian-British Chamber of Commerce (NBCC) has urged the Central Bank of Nigeria (CBN) to explore the current calm in forex market to control the country’s rising inflation.

A statement by the chamber on Monday in Lagos said that the current calm in the forex market should be sustained, to reduce inflation and stimulate economic growth.

It said, “The long term benefits of free float foreign exchange are contingent on efficiency, transparency and proper regulations.It is also expected that foreign investors will re-enter the economy through FDI and provide domestic companies with necessary funding and expertise required to resuscitate business activities.”

The chamber added that sustenance of the policy would boost capital inflows, encourage domestic lending and enhance production for export.The News Agency of Nigeria (NAN) recalls that the CBN dumped its pegged exchange rate and introduced flexible exchange rate on May 24.

The apex bank in partnership with the FMDQ OTC Securities Exchange also brought about the first Naira-Settled OTC FX Futures Market on June 27.The aim is to minimise the disequilibrium in the Spot FX market and cause the naira rate to moderate.

Besides, the National Bureau of Statistics (NBS) put the May 2016 inflation rate at 15.6 per cent.The chamber said that these benefits, if properly harnessed, were capable of controlling the rising inflation rate in the country.

It said that a synergy of monetary and fiscal policies directed at infrastructural development and reforms would also increase tax compliance and create a favourable environment for the SMEs to thrive.

We expect the government to apply a robust debt management plan at both the federal and state levels, while following through on capital projects required to drive the economy and attract FDI.”

It stressed that the speedy resolution of the Niger Delta militancy and pipeline vandalism was required to boost oil production and foreign exchange revenues.