May 16, 2024

Why trying to make naira appreciate in a hurry won’t work – Atedo Peterside

Why trying to make naira appreciate in a hurry won’t work – Atedo Peterside

By Miftaudeen Raji

The founder of Stanbic IBTC and ANAP Foundation, Atedo Peterside said trying to make the naira appreciate against the dollar in a hurry will not work.

Peterside stated this in an interview on Channels Television’s Politics Today on Thursday.

The founder noted that the urgency with which the President Bola Tinubu-led administration wants the naira to appreciate against other foreign currencies is not the best approach.

He, however, exonerated the current administration from the depreciation of naira.

According to him, the best approach would be for the central bank to stabilise the naira to a level where they can sustain it for some time and gradually build the reserve.

He said, “I will be fair to this government, they inherited the exchange rate problem and what they have been doing is trying to manage it. Recently I would have thought, let’s get some stability around N1,300 or N1,400, don’t be in a hurry to appreciate the exchange rate.

“Going to sell dollar to bureau de change at N1,000, N1,050, those guys will turn round two weeks later and sell it at N1,400, N1,500 and they go away laughing. What’s the point for that?

“It’s better to have some stability they can sustain, keep between N1,300 and N1,400 which looks to be the natural equilibrium band today, keep it there for a while, build up your reserve to let confidence come back.

“So stop trying to appreciate the naira in a hurry, it’s not going to work,” he said.

Peterside urged the government to start doing things right to build confidence among investors and stop reckless spending.

He said the habit of doing five things right and doing two things wrong will not help the government achieve anything tangible.

The economist added that the Tinubu’s monetary policy is on the right direction, but the government should tackle huge fiscal indiscipline.

Recall that the naira  had earlier fallen to around 1,900 to a dollar. But, it later rallied to around 1,100 and was recently declared as the best-performing currency in the world.

However, the naira has again retreated to around 1,500 to a dollar in the black market.