IN an exclusive interview with ENCOMIUM Weekly on Friday, March 6, 2015, an economic analyst, Miss Gloria Akudo Nwagbara took us through the reforms of the troubled forex sector by former CBN Governors, Professor Charles Soludo and Mallam Sanusi Sanusi, whom she hailed as economic wizards.
“With the introduction of the wholesale Dutch Auction System (wDAS) on February 20, 2006 by former CBN Governor, Professor Chukwuma Soludo, the liberalized Foreign Exchange Market witnessed unprecedented stability most of which included the unification of exchange rates between the Official and Inter-bank Markets and resolution of the multiple currency problems. It also helped in facilitating greater market determination of exchange rates for the naira vis-a-vis other currencies.
Apart from leading to Parallel Market appreciation – for the first time in 20 years, according to a CBN report then, it also ensured convergence of official and inter-bank rates, thus unifying the two. It again ensured the sale of Foreign Exchange to Bureaux-de-Change operators in an effort to increase access of foreign exchange to small end-users, thereby bridging the supply gap and developing the local Bureaux-de-Change (BDCs).
“In 2013, former CBN Governor Sanusi Lamido suspended the wDAS and reintroduced the rDAS which held on Mondays and Wednesdays. He went on to accuse some banks of importing dollars and selling them to Bureau De Change operators. Sanusi also claimed that Nigeria had toppled Russia as the largest importer of Dollars. He noted that the country is the biggest user of foreign exchange which it uses to import everything it produces and export what it doesn’t produce.”