CBN New Foreign Exchange Policy Scares Off Foreign Investors
Due to the country’s new policy on Foreign exchange, foreign investors are hesitant on investing and bringing bak capital into the country.
Speaking with newsmen, industry experts including the Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane said the confidence of prospective investors are not very steady.
On February 20th, the Central Bank of Nigeria said it would provide funding to banks so they can meet the need of Nigerians for both personal and business travels, school fees and medical need.
However the weekly sales of foreign exchange to from CBN to banks has helped the spread between the official and parallel exchange rates but pressure still remain on the naira.
Due to this supply, the naira appreciated from N520 per dollar to N475 at the parallel market and on Friday it went down to N450.
Charles Robertson, the Global Chief Economist, Renaissance Capital described the increase in liquidity in the foreign exchange market as helpful.
He said, “Foreign investors want to know they can make profit on their investments when they invest in the country but they are deterred by the multiple currency rate”
He said the reason why the investors are not very confidence is because in mid 2016, some foreign investors put money into Nigeria when the currency was floated but they later found out they were stuck again.