President Tinubu vow to unify exchange rates, reduces interest rates
Nigeria’s newly elected President Bola Ahmed Tinubu, has declared his government’s decision to unify the exchange rate, and reduce high lending rates.
President Tinubu made the policy announcements during his inaugural speech, in Abuja on Monday 29th May, 2023.
With this development, there are indications that there’s going to be a new direction for Nigeria’s economic policies, as he declared to replacing the previous multiple exchange rate regime implemented during the administration of former President Buhari by the central bank.
In his speech, President Tinubu highlighted the importance of a unified exchange rate and emphasized the need to redirect funds to more impactful investment.
“The central bank must work towards a unified exchange rate…they should direct the fund from arbitrage to meaningful investment “.
He, also, called for a reduction in interest rates, describing the current rates as detrimental to both the people and businesses in Nigeria.
“Interest rates need to come down, currently too high, anti-people, anti-business, we have to work on all of those”’ he said.
The President also called for a “thorough cleansing” of monetary policy suggesting a direct rebuke of the current central bank and its policies aimed to bringing down inflation and maintaining exchange rate stability.
To this end, President Tinubu’s decision to unify the exchange rate reflects a departure from the multiple exchange rate system that was in place during the previous administration.
Experts, therefore, believed that by implementing a unified exchange rate, President Tinubu aims to streamline the foreign exchange market and reduce distortions, thereby attracting more investments and boosting economic stability.
The unification of the exchange rate is expected to enhance transparency and create a level playing field for businesses operating in Nigeria.
It will simplify transactions, eliminate complexities associated with multiple exchange rates, and provide a more accurate reflection of the true value of the Nigerian currency, the naira.
This move is likely to improve investor confidence, attract foreign direct investment, and promote economic growth in the long term.
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