The Trade Union Congress of Nigeria (TUC) has commended the Federal Government’s new forex policy that liberalised the exchange rate of the Naira to the dollar.
TUC National President, Festus Osifo, gave the commendation Wednesday on the sidelines of the on going 111th Session of the International Labour Conference (ILC) in Geneva switzerland.
It would be recalled that the Central Bank of Nigeria (CBN) in a memo had told banks they could buy forex from any source at any rate and sell at any rate subject to a maximum of N1 bid-ask spread between the buy and sell rate.
Osifo said that the new policy would not have come at a better time than this.
He, however called for caution, saying that the market should not be let loosed for speculators.
According to Osifo, we also have to be careful because we live in a country where we have so many peculiarities.
“I have done some study and from the body-Trade Union Congress of Nigeria, we have done some releases in the past, and in all these studies we have done in the past, we have realised that no country in the world will allow its currency to just be out there hundred per cent”.
The TUC president said that though some speculators could be allowed to “jump in”, “what will happen is that if you allow it to tell us wrong the way it is today, the product market may move to 800 in the next few days.
“When that happens, the official rate will be trailing the parallel market in order for it to catch up.
“So there must be some fundamentals, some parameters must be set.We must also prevent speculators from allowing our exchange rate to run away because everything in our economy is tied to the estimate.”
According to Osifo, Nigeria imports practically everything and if the country was to be producing most of her needs locally, it may not have much to be worried about with the present development in the money market.
He added that with this new policy the value of the exchange rate would determine the price of these items in the market.