Interbank, parallel rates’ convergence not automatic, say experts – Guardian

dollar to naira

The long sought convergence of the inter-bank and parallel market rates will not be realised in the immediate going by the assessments of financial experts.

Besides, they said the continued lock out of the 41 items from the official foreign exchange window will sustain for parallel market operations and the wide gap estimated at about N70.

The Chief Executive Officer of Graeme Blaque Advisory, Zeal Akaraiwe, stated that the expectations of black market rate convergence with the official rate now are “early calls”.

The head of the financial advisory company with specialty in derivatives risks, however, pointed out that what we should be talking about is the divergence that is acceptable.

“The combination of the lack of optimal dollar liquidity in the interbank market along with the pressure on the unofficial market by the 41 banned items will not allow for a rate convergence at all.

“We may need to reconsider the approach to the banning of the 41 items, amongst other things, in order see some of the desired positive in the unofficial market,” he said.

He also advised regulatory authorities to produce a well thought-through policy changes regarding Bureau De Change operations, as a way forward to discovering true price of the currency, followed by cohesive fiscal policy support.