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Osinbajo Never Called For Naira Devaluation – Presidency

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Osinbajo Never Called For Naira Devaluation - Presidency

The office of the Vice President has denied reports that Yemi Osinbajo asked the Central Bank of Nigeria (CBN) to devalue the naira.

Naija News reports that Osinbajo, at the Midterm Ministerial Review on Monday, advised the apex bank to allow the naira to reflect the realities of the market.

The vice president asked the CBN to increase the artificially low exchange rate, which in turn motivates investors to bring in foreign exchange into the country.

But in a statement on Tuesday by the spokesperson to the vice president, Laolu Akande, his principal did not call for naira devaluation rather he advocated for a forex policy that offers customers cheaper dollars.

Akande said that Osinbajo also called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand.

He stated that the vice-president’s statement was wrongly interpreted as a call for devaluation, adding that Osinabjo has always argued against naira devaluation.

Akande noted that the only way the naira will appreciate against the dollar is by allowing mechanisms like the Importers and Exporters (I&E) forex window to work.

The statement reads: “Our attention has been drawn to statements and reports in the media mischaracterizing as a call for devaluation, the view of Vice President Yemi Osinbajo, SAN that the Naira exchange rate was being kept artificially low.

“Prof. Osinbajo is not calling for the devaluation of the Naira. He has at all times argued against a willy-nilly devaluation of the Naira.

“For context, the Vice-President’s point was that currently, the Naira exchange rate benefits only those who are able to obtain the dollar at N410, some of who simply turn round and sell to the parallel market at N570.

“It is stopping this huge arbitrage of over N160 per dollar that the Vice-President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40% profit!

“This was why the Vice-President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.

“It is a well-known fact that foreign investors and exporters have been complaining that they could not bring foreign exchange in at N410 and then have to purchase foreign exchange in the parallel market at N570 to meet their various needs on account of unavailability of foreign exchange.

“Only a more market reflective exchange rate would ameliorate this. With an increase in the supply of dollars, the rates will drop and the value of the naira will improve.

“If we allow this market mechanism to work as intended, we will find that the naira will appreciate against the dollar as we restore confidence in the system.”

Ige Olugbenga is a fine-grained journalist. He loves the smell of a good lead and has a penchant for finding out something nobody else knows. Gbenga is an alumnus of the prestigious Adekunle Ajasin University, Ondo State and The Polytechnic, Ibadan.