In an effort to sustain the recent appreciation of the naira against the dollar, the federal government has initiated moves to bridge the supply gap fueling the currency’s decline, reaching out to individuals hawking dollars for a parley.
According to reports, it was learnt from top government sources that the government was reaching out to individuals hoarding the dollar, establishments and those found to have looted the treasury to make them “bring their monies to the mainstream market.” It was learnt that the government was willing to do whatever was necessary to solve the problem.
A top source in the Presidency said the initiative formed the crux of two Executive Orders recently signed by President Bola Tinubu.
The orders are part of the Federal Government’s measures to ensure liquidity in the nation’s forex market, stabilise the market and sustain the appreciation of the naira, which had fallen against the dollar in recent weeks.
Although the orders are now in operation, their content and the ramifications of the interventions are unknown as they are yet to be gazetted.
Speaking on the panel session of the 29th Nigeria Economic Summit, held in Abuja last week, Finance Minister and Coordinating Minister of the economy, Wale Edun, said, “Mr President announced that he had taken measures to ease illiquidity in the forex market, which we know is very problematic at this time.
“The market is illiquid; it’s not functioning properly because there is no supply, and there are various reasons for that. The solution that the President has put on the table is that he has signed an executive order that effectively allows, under forbearance, all the cash that is in the domestic economy to legally come into the formal money supply.
“Along with that, there is another executive order that allows domestic issuance of foreign currency instruments so that they will have the incentive to provide that foreign exchange from whatever source.”
This forbearance is to be a sort of amnesty for persons and institutions hoarding the dollar.
The senior government official told our correspondent that details of the Executive Orders were intentionally kept from the public so as not to raise too much dust that would distract the administration from its goal of stabilising the naira.
The official said, “It’s intentional that we didn’t put out the details. We are talking to a large enough number of stakeholders to bring in their dollars to the mainstream market. These people hold billions worth of cash and we are trying to send them a clear message that they can inject money into the economy and still take it out swiftly when they want.
“We need those dollars back in the system. So, we are trying to see how we can regularise them.”
The source also said the government’s approach to those hoarding dollars was in the interest of Nigerians, adding that it would not mind reaching out to those perceived to be destroying the economy.