Bismarck Rewane, a famous economist and the head of Financial Derivatives Company Limited, has criticized the government’s action of cracking down on Bureau de Change (BDC) operators to stabilize the naira.
He expressed his views on Thursday on Channels Television’s Business Morning show, a part of our station’s morning programme, Sunrise Daily.
The naira has been losing value rapidly since the Federal Government unified the forex rate in June 2023, going from N700/$1 to over N1500/$1 currently.
The government has been trying hard to control the forex exchange rate, including deploying the Economic and Financial Crimes Commission and other law enforcement agents to target BDC operators.
Rewane said,
“This doesn’t happen in other countries, raiding market and all. You are only making it more difficult because there is what we call illicit premium in a currency. You leave them do what they want, a speculator can make money and a speculator definitely will lose money,” Rewane said.
“Allow things settle down and the true value of the currency will emerge. All these is what I call misguided enthusiasm of law enforcement agents is chasing shadows and is going to be counterproductive.”
He said that the government could intervene by injecting more dollars into the market to bring it under control.
He said that if the central bank announced today that it would intervene with $500m, all the BDC operators would disappear because no one would buy from them.
“What is the offence that they have committed in the first place? I heard something like naira racketeering, mutilation of notes and all that, is that the problem? And I heard the BDC man saying that we will ensure that the rate will come down, were they the ones that ensured the rate went up in the first place?
“Market work when the supply is in excess of demand, the value of that currency appreciates, when the demand is in excess of supply the currency depreciates,” Rewane noted.
