As the year draws to a close, the Federal Government appears certain to fall short of its previously stated goal of achieving an exchange rate of N750 to a dollar.
The exchange rate initially increased significantly following President Tinubu’s decision to unify the exchange rates and cancel fuel subsidy payments.
Amid the considerable pressure exerted on the naira in the foreign exchange market by its policies, the Federal Government promised in October that the naira would exchange with the dollar between N650 and N750 by December 31.
Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, said in an interview with Bloomberg that the Federal Government was implementing a new set of foreign exchange rules which were designed to assist the naira in reaching a “fair price” of N650 to N750 per dollar.
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Mr. Oyedele’s predictions were expected to bring about positive changes, including reduced inflation, enhanced purchasing power, and improved economic metrics by the end of the year.
“We think all of that will happen before December, and maybe in a matter of a couple of weeks, we will begin to see the results, such that before the end of the calendar year, the naira should find its true value, not the one that is being done currently in the parallel market,” he said.
However, since Mr Oyedele’s statement, the naira has depreciated further against the dollar. According to the FMDQ report, the naira closed against the dollar at N872.59 per naira on December 27 in the stock exchange market.
This development indicates a deviation from the government’s projected exchange rate, raising questions about the effectiveness of the new foreign exchange rules and their impact on the economy.
