CBN reintroduces Retail Dutch Auction System to ease FX demand pressures

Nigeria is facing significant economic challenges as the Central Bank of Nigeria reintroduces the Retail Dutch Auction System in an effort to address the rising unmet foreign exchange demand. Johnson Chukwu, CEO of Cowry Asset Management, expressed skepticism about the effectiveness of this move, stating that the market should be allowed to operate freely without subsidies. He emphasized the need for increasing liquidity in the market to stabilize the exchange rate. Chukwu also highlighted the impact of the government's policy decisions on the economy, particularly the increase in tax revenue and customs collections due to the devaluation of the Naira. While acknowledging improvements in debt service to revenue ratio, he noted the potential negative impact of massive government borrowing. The interview further touched on President Bola Tinubu's recent national address, where he focused on maintaining law and order while addressing the citizens' living standards and safety. However, concerns remain about the government's ability to effectively communicate the impact of its policies on the people's daily lives. Despite the President's optimism about attracting investors and foreign direct investment, challenges persist in translating these statements into tangible benefits for the population.