‘CBN’s intervention in forex market ‘ll protect the naira’

A chartered accountant and the Principal Partner /CEO of Victor Owonifari & Co., Mr. Victor Owonifari, has described the intervention of the Central Bank of Nigeria (CBN) in the interbank forex as a step that will go a long way in putting the naira in a vantage position when compared with other currencies of the world.

Owonifari, who said this during an interactive session with newsmen in Lagos, noted that the market should be allowed to operate freely and find its equilibrium, but as the regulatory body, the CBN should intervene once in a while to curb excesses and supply shortfalls, thereby protecting the naira.

He further stressed that as the apex bank had repeatedly informed Nigerians that it allowed for flexibility to come into play and was prepared to intervene only when necessary to prevent volatility in the forex market; the new system was expected to operate as a single market structure through the interbank and autonomous methods.

The financial expert, however, added that the recent devaluation of the naira to the US dollar had led to an increase in the cost of imported goods, thereby making Nigerians to pay more for imported goods without a corresponding increase in quality and quantity.

Owonifari also noted that the increase in the pump price of petroleum products and prices of household commodities in the early part of the year was partly responsible for the sudden rise in inflation rate to 16.5 per cent.

He urged the government to checkmate the trend of inflation in the country by not only ensuring the reduction of the people’s dependence on imported goods, but by also creating an enabling environment that will be attractive to investors and small scale business owners in order to have positive effects on the naira, provide job opportunities for Nigerians, reduce capital flight and bring down inflation to an acceptable limit.

The chartered accountant lamented the state of the nation’s economy, stressing the urgent need for the diversification of the economy with government’s support for SMEs and investments in agriculture.