THE current monetary policy of the Central Bank of Nigeria (CBN) may sound the death knell of the nation's productive sector if the authorities fail to stem a further slide in the value of naira in the foreign exchange market, members of the Organised Private Sector (OPS), have warned.The naira further cascaded in the foreign exchange market against major currencies yesterday, as the CBN tightened liquidity, in a paradoxical move to save the national currency.Yesterday, the naira exchanged at an all-time low of N165 to the dollar, with current low stock of the green backs fuelling speculation that the nation's currency could be further devalued to N170 to the dollar, by the weekend.At the weekend, the naira was exchanging at N155 to the dollar, at the parallel market.The President of Lagos Chamber of Commerce and Industry, Chief Femi Deru, described the continued depreciation of naira as worrisome and could hinder government's transformation agenda.Deru pointed out that plans by the Federal Government to remove fuel subsidy from January had led to panic buying of dollars by some industrialists. He pointed out that many industrialists wanted to import raw materials and machines to beathigher prices of raw materials that could follow the removal of fuel subsidy. This development, he added, would have negative impact on the cost of production.The President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, (NACCIMA), Dr. Herbert Ajayi, said that with the on-going speculation, the value of the naira might further depreciate to N200 to the dollar.Ajayi stressed that the development would lead to increase in the cost of importing machines and raw materials.He also argued that it could worsen the state of the industrial sector and many companies might relocate to neigbhouring countries.A former Chairman of National Association of Small Scale Industrialists (NASSI), Duro Kuteyi, said that further slide of naira would impact negatively on the whole economy.'How can it be said that the naira would be allowed to nose-dive to this level with no solution in sight'' he asked.Kuteyi said that the development would affectsmall businesses as those who secured loans from banks to procure equipment would have to request for additional facility.'There will be increase in the number of loan defaulters if they failed to secure such facility because of the persistent slide in naira,' he said.Signs of imminent devaluation of the naira emerged on Monday when the currency traded at N164.30 to the dollar, outside the apex bank's bond of N150 plus or minus three per cent.The development followed initial move by CBN 'to save the naira,' but which OPS members described as counter-productive and inimical to the manufacturing sector.
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