A US multinational financial services firm, JP Morgan, on Wednesday projected that the naira would trade at N850/$ at the Investors’ and Exporters’ Forex window before the end of 2023.

However, the US bank said the recent efforts to restore a flexible FX regime may be sustained given the willingness to accompany it with tighter monetary conditions.

“The interbank FX rate has risen in recent days to over 900, from 750, thereby significantly closing the gap to the parallel rate which is now just above 1,000.

“We expect USD/NGN to eventually move lower towards 850 by year-end as the combination of tighter policy, as well as more attractive rates and FX levels deter incremental dollarization and perhaps attracts some foreign capital,” JP Morgan asserted.

In addition to the policy actions, JP Morgan averred that authorities may need to consider further measures such as requiring commercial banks to adhere to regulatory limits on FX net open positions.

Other measures, JP Morgan said, include exploring the introduction of a cash reserve ratio on FX deposits as well as the issuance of dollar assets onshore.

On the fiscal side, the financial services firm advised the government to require all taxes to be paid in local currency.

It added that some of the measures may have already been incorporated in the Federal Government’s forthcoming revision of guidelines relating to the operations of the forex market.

JP Morgan also urged oil exporting companies to consider selling forex proceeds on the interbank market, rather than directly to the Central Bank of Nigeria.

The company also said the willing buyer-willing-seller nature of the foreign exchange market is contributing to the extreme volatility in the FX market.

It said the willing buyer-willing-seller model impeded price discovery, so the financial regulator should reconsider the strategy.

The bank also commented on Nigeria’s plan to obtain $10bn in foreign currency inflows in the next few weeks to ease liquidity in the foreign exchange market.

It added that the ability of the government to raise such an amount may be challenging given the “US$3bn expected from Afrexim has been delayed for months, while Nigeria LNG Limited’s historical dividends to the government have fallen well short of US$2bn annually”.

Meanwhile, the President of the Association of Bureau de Change Operators of Nigeria, Aminu Gwadabe, had called on the Federal Government to consider the securitisation of domestic remittances as part of the planned new forex rules.

In an exclusive interview with The PUNCH, he commended the plan by the Federal Government to address the forex crisis by operating a single exchange market.

He said, “The plan by the Federal Government to address the forex crisis is a good one and will yield results. Of course, it is going to add value to the local currency. We are only waiting to see how it would be implemented, especially on confidence-building measures.

“However, I think instead of securitising inflows from NLNG, they should look towards securitising diaspora remittances for Bureau de Change. It has been done in Malaysia, Lebanon, China, South Africa and other countries.

“We have to scrutinise diaspora remittances. It is stable and heavy. We should leave energy proceeds; the government should focus on remittances from the diaspora. It is about $20bn annually compared to that of NLNG that is from our future revenue of 14 years.”

He urged the government to use the Bureau de Change as a vehicle to implement that.

naijaboy756:
Dollar wey Osinbajo, Tinubu and Buhari accuse say e Dey 216.

Human beings are truly wicked

naijaboy756:
dem get bad mind dey say dollar appreciate to 1k

Men without honor
Men without value
Men with zero integrity

MANNABBQGR1LLS:


True that....

Some enemies of the country,
Aka, children of frustrations, perdition and hate will be in severe pains right now.
All they want is for dollars $ to go to #2000,
So they can start justifying their frustrated and miserable lives.

Nigeria 🇳🇬 will be great Whether the evil ones like it or not

God bless Nigeria 🇳🇬.

We Rise.

MANNABBQGR1LLS:
Good news for our economy

phr0nesis:

Till it gets back to where APC met it, I won't be satisfied. Even ₦300 is still bad

Hezzyluv:


U can say that again.

What is so annoying and very pathetic is that, APC zombies are totally attributing it to global economic meltdown looking for one excuse or the other just to buttress why the country is in total mess and pitiable state.


O ma se oo
O ma se oo

AngelicBeing:
Hian, you have cojoined 5posters and l am charging you $500 / per Every poster that you have cojoined, kindly remit $2500 to JP MORGAN ACCOUNT number 456799 , swift code 777 , and the money will be used as charity for different NGO's globally

wittywriter:


To crown the wickedness they recruited online minions to defend their glaring incompetence in governance.




Wittyness

naijaboy756:
Dollar wey Osinbajo, Tinubu and Buhari accuse say e Dey 216.

Human beings are truly wicked

naijaboy756:
Dollar wey Osinbajo, Tinubu and Buhari accuse say e Dey 216.

Human beings are truly wicked

CodeTemplar:
I hope so. N500 by Q1 2024 is not bad.

grandstar:
It would be fantastic if it could touch N850.

phr0nesis:

Till it gets back to where APC met it, I won't be satisfied. Even ₦300 is still bad