FG to implement new FX rules for ‘fair price’ by end of 2023 — Taiwo Oyedele


Taiwo Oyedele, chairman of the presidential committee on
fiscal policy and tax reforms, says the federal government plans to introduce
new foreign exchange rules, including a crackdown on illicit currency trading.


In an interview with Bloomberg on Monday, he said the
government hopes the reform will result in the naira closing its gap with the
unofficial rate and reaching a “fair price” before the end of 2023.


He said the government plans to clear a backlog of dollar
demand estimated at about $6.7 billion, bolster the naira forward market, and
set transparent rules for the operations of the official market.


Oyedele, a former fiscal policy partner and Africa tax
leader at PriceWaterhouseCoopers (PwC), said FG also aims to expand the
official market to include all legitimate transactions while stifling the
illicit “black market” for foreign currency.


“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 calender year, naira should find its true value, not the
one that is being done currently in the parallel market,” Oyedele said.


He added that the government sees a “fair price” for the
dollar at “N650 to N750”.


Oyedele said the divergence between the official and
parallel market rates “means you are sucking liquidity and supply from the
official market to the parallel market, because everyone wants the premium”.


On October 23, 2023, Wale Edun, minister of finance and
coordinating minister of the economy, said Nigeria expects $10 billion in
foreign currency inflows in the next few weeks to ease liquidity in the foreign
exchange market.


On Monday, the naira appreciated further at the parallel
section of the market to N1,150 a dollar.


Meanwhile, the local currency appreciated by 5.68 percent at
the official market to close at N789.94 to the dollar on Friday — from
N837.49/$ on Thursday.


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