The federal government, led by President Bola Tinubu, is aiming to get a fair exchange rate between the dollar and the naira by the end of 2023, according to Taiwo Oyedele, the chairman of the presidential committee on fiscal policy and tax changes.
He states that before the year ends, the government wants to see a “fair price” for the dollar at “N650 to N750.”
In an interview with Bloomberg on Monday, Oyedele stated that the government plans to implement new foreign exchange regulations, which would include a crackdown on illicit currency transactions, in order to accomplish this.
He states that the naira is anticipated to close the gap with the unofficial rate and arrive at a fair price as a result of the new regulations and changes.
Oyedele went on to say that the government is also planning to strengthen the naira forward market, establish clear guidelines for the official market’s activities, and clear up a backlog of dollar demand estimated to be worth roughly $6.7 billion.
He believed that the new regulations would revitalize all legal foreign exchange operations while suppressing the illegal foreign exchange market, or “black market.”
“We think all of that will happen before December, and maybe in a matter of a couple of weeks we will begin to see the results, such that before the end of the calendar year, the naira should find its true value, not the one that is being done currently in the parallel market,” Oyedele said.
The existing disparity in prices between the official and black market “means you are sucking liquidity and supply from the official market to the black market because everyone wants the premium,” Oyedele continued.
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