The Acting Managing Director, Coronation Merchant Bank Limited, Banjo Adegbohungbe has said naira is unlikely to be devalued in the course of this year given the strong state of the foreign exchange reserves.
He spoke at the Coronation Breakfast Session held in Lagos.
The bank chief said that with foreign reserves at $37.23 billion mark, and new policies by the Central Bank of Nigeria (CBN) to attract foreign direct investment.
Speaking on several interventions and policies instituted by the CBN to attract local and foreign investors to the economy.
He said there are several factories springing up across the country adding that if the oil refinery comes on stream as planned and if all those factories come up may be five year’s time, the economic landscape will be totally transformed.
“The amount of jobs and the multiplier effect that we will have on the economy will be quite significant. The point some of them might even earn foreign exchange for the country. Don’t forget that some of these challenges are long term and will need solutions that have long term perspective,” Adegbohungbe said.
However, there are about N4.5 trillion Open Market Operation bills to be redeemed in the first quarter of 2020, head, research Coronation Asset Management, Guy Czartoryski, said in his presentation at a breakfast session on ‘Re-risking the Nigerian Financial,’ held in Lagos.
He said the management of foreign exchange reserves is linked to the CBN’s setting of market interest rates. Currently, Nigeria has a dual interest rate system, with the CBN’s OMO bills available only to banks’ proprietary books and to foreign portfolio investment.
“If the CBN cannot sell sufficient OMO bills to foreigners in early 2020 then this could, in our view, present challenges to its foreign exchange reserves management and distrust the current N362.50/$ exchange rate,” he said.
Continuing, he said: “If you look at all that the CBN has been doing, it is about managing the exchange rate. As at today, the foreign investors can come in and exit at will and that is an incentive for them to invest in the economy.”
Also speaking, head, trading, Coronation Merchant Bank Limited, Iyobosa, Sorae, said to reach the goal of attaining foreign direct investment, there are certain things that should be put in place, which she said the CBN is already doing but remains the fiscal side.