Rewane: Naira is changing, but it is not doomed.

According to renowned economist Bismarck Rewane, the country’s official currency is not doomed as some have speculated, but rather is undergoing a transition.

During his guest appearance on Politics Today, a late-night show on Channels Television, Rewane, the managing director of Financial Derivatives Company Limited, made this statement.

This development follows the Central Bank of Nigeria’s denial that it intended to convert $30 billion in deposits held in domiciliary accounts into naira.Rewane stated that although difficult times are ahead for Nigerians, there is a solution available for the naira’s decline.It is not like I believe the naira is jinxed, he said.

It is merely a temporary form of money. As you can see, the value of a dollar was N499 in 2016. It was N1,468 as of this afternoon (Monday). It began to rise again sometime last week after falling to N1,531 per dollar.We thus have difficult days ahead of us.

Nevertheless, the important thing to remember is that determining its fair value requires taking into account the currency that is undergoing change.”While some of the issues are transit-related, others are structural. We must therefore interpret it within that framework.

However, as you are aware, the underlying issue with the naira is that a nation experiencing severe inflation and a crisis related to the cost of living will invariably have a weak currency.“To address that, you have to look at it from a broad perspective. It is not one silver bullet that can solve all problems.”

Rewane added that “for instance, in 2004, it was $1.70 that will give you one pound. Today, it is about $1.27 that gives one pound. We have three types of systems.“We have the fixed, floating and management exchange rates. In the world, 38 per cent of the currencies are called flexible exchange rates. Another 35 per cent is what you call the floating rate.”