During his screening before the National Assembly on Tuesday, Wale Edun, President Bola Tinubu’s adviser on monetary policies and a ministerial nominee, attributed the Naira’s challenges in the foreign exchange market to corruption, speculators, and past foreign exchange management practices.

Edun refuted the legitimacy of the N860/$1 exchange rate, stating that it does not align with the underlying fundamentals of the Nigerian economy. He further pointed to inefficiencies and corruption as contributing factors to the Naira’s inability to withstand the pressure from the Dollar, which has been exacerbated by the accumulation of unpaid dollar bills.

As the screening process continues, Edun’s remarks shed light on the complexities of Nigeria’s foreign exchange challenges and the need for comprehensive measures to address the underlying issues affecting the Naira’s value against the Dollar.

“The N860/$ that we are seeing is not backed up by the fundamentals of the Nigerian economy,” Edun said, adding that, “The rate, when you move aside speculation and the fact that there is as a result of foreign exchange managing practice of the past, the inefficiencies and the corruption involved has meant that there is an overhang of unpaid dollar bills and that is what is putting pressure on the exchange rate.”

He explained to the Senate that when remittances, oil revenues, and non-oil exports increase, the exchange rate, which has skyrocketed from N664.04/$1 to N789.08/$1 as of Tuesday, will become stable in the official market.

Recall that the naira to dollar exchange rate was N471.67/$1 on June 13, before the Nigerian currency was devalued to N664.04/$1 on June 14.

But after the naira devaluation, the local banknote depreciated further, with the highest price of the dollar placed above N800 in the past few weeks.

According to Edun, with all things being equal and provided inflation is kept under control, the naira will regain its value in the foreign exchange market.

“The issue of foreign exchange is clearly uppermost in the minds of the monetary authorities. What I can say is this. For a country that receives revenue from oil revenues, from remittances, from other non-oil exports, and from the financing of over $100 billion a year, there is no reason that there should not be a stable exchange rate,” he said.

The special adviser also said the monetary authorities and the monetary team of Tinubu are looking to resolve the fluctuation in the exchange market “by raising revenue, by looking at other sources of investment funding, by attracting investment funds, equity funds not debt, from around the world interested in investing in the Nigerian economy.

“But I would just like to warn that all the models are showing that the fundamental value of the naira should be somewhere around 700. So, a note of caution to the speculators, as liquidity flows in and the rate comes rapidly down, there is a chance that they could lose their shares, it is just a warning,” Edun noted.

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