Feelers from last week's foreign investment road-show by Central Bank of Nigeria (CBN) indicated that Nigeria's finances and the economy as a whole may be headed to its worst external sector positions.
The foreign investors have told the apex bank that they are not yet ready to return to Nigeria even though the local currency has been massively devalued in line with their demands. The implication is that Nigeria may have burnt its candle from both ends.
About five issues stick out in the discord between Nigeria's monetary authorities and the foreign investment communities. They include: transparency in the currency market, liquidity of the market, the place of the parallel market, the external reserves and the political will for liberalisation. In spite of CBN's modest efforts, the investor communities feel there are still grey areas in the new forex regime that portray the exchange rate dynamics as if they are not real. Probably this is the core of all other issues.
We would like to see CBN demonstrate full transparency in the forex market, not because of the foreign investors' demands but because that is a basic requirement for any near-perfect, free enterprise market to function optimally. Even local investors would demand such, and we dare say that if anything is fishy in the implementation of the new forex regime, Nigerian financial system operators would decode such and take advantage of it to the detriment of the economy.
Market swing
Forex signals
Fx signals
currency signals
The foreign investors have told the apex bank that they are not yet ready to return to Nigeria even though the local currency has been massively devalued in line with their demands. The implication is that Nigeria may have burnt its candle from both ends.
About five issues stick out in the discord between Nigeria's monetary authorities and the foreign investment communities. They include: transparency in the currency market, liquidity of the market, the place of the parallel market, the external reserves and the political will for liberalisation. In spite of CBN's modest efforts, the investor communities feel there are still grey areas in the new forex regime that portray the exchange rate dynamics as if they are not real. Probably this is the core of all other issues.
We would like to see CBN demonstrate full transparency in the forex market, not because of the foreign investors' demands but because that is a basic requirement for any near-perfect, free enterprise market to function optimally. Even local investors would demand such, and we dare say that if anything is fishy in the implementation of the new forex regime, Nigerian financial system operators would decode such and take advantage of it to the detriment of the economy.
Market swing
Forex signals
Fx signals
currency signals
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