'We have our views' - Tinubu’s govt sets ‘fair’ naira to dollar exchange rate target by December 2023

The federal government hopes to stabilise the value of naira in the foreign exchange market with several reforms.

Bloomberg reports that Tinubu's government has set a target exchange rate for the dollar against the naira, which is believed to be fair, to be achieved before the end of 2023.

The report quoted Taiwo Oyedele, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who said the government sees the fair price for the dollar at N650 to N750.

The Central Bank of Nigeria(CBN) also believes the fair value of the naira should be around N700 a dollar.

The former acting CBN governor, Folashodun Adebisi Shonubi, at the last Monetary Policy Meeting held in July 2023, said: "We have our views as to what that level is and as the market continues to oscillate around that level, if there’s a need for us to intervene either by buying or selling." T

The value of the naira has plummeted to new lows in foreign exchange markets. In the official market, the naira, as of Friday, October 27, 2023, sold for as high as N900 before closing at N789.94 to the dollar.

In the black market, Nigerians bought one dollar for as high as N1,300. To counter this free fall of the naira, Oyedele said several new foreign exchange rules, including a crackdown on illegal currency trading and introducing taxes for black market transactions, would help naira stabilise before the end of 2023.

He listed other government plans to give the naira its true value will include clearing a backlog of dollar demand estimated at $6.7 billion, bolstering the naira forward market, and setting transparent rules for the operations of the official market.

With just two months left, only time will tell if Tinubu's government can achieve this.