Some sectors may witness drop in prices over Naira appreciation – Ken Ife
A Development Economist, Prof. Ken Ife, says some sectors may soon likely witness a drop in prices as the Naira appreciates against the Dollar.
Ife, who said this in an interview Sunday in Abuja added that the sectors likely to witness a decrease in prices included the sectors strongly dependent on transport, diesel, and imported items.
“Imported food has to be transported across the country, so they are heavily dependent on the high cost of transportation.
“But that will come down because diesel is what is used to run the buses and trucks that transport these foods across the country.
“So they will come down because the average price of diesel has come down to N1,000 from N1,800 and it may come down further. So that seems to be putting down prices of the dependent products.
“Then some other things like travel and transport are likely to come down a bit too.”
The public policy analysts said energy-dependent operations were also going to be influenced as the Naira appreciates against the dollar.
“Forex affects energy costs as well so the manufacturers that use diesel to run their generators, their prices will come down a bit.
“At the same time, you know forex is also bringing down the prices of imported goods which are highly inflationary.”
He said the federal government was doing its best to shake down currency speculators and foreign exchange manipulation in the market, citing the 36 million dollar action against Binance, a global company that operates one of the largest cryptocurrency exchanges.
Ife said the banks were also being harassed to sell any money outside their Net Open Position (NOP) of 20 per cent.
“These measures are having immediate effect at the forex end. Not just because there is an increased inflow of forex now both in diaspora remittances and from foreign portfolio investments coming in to accrue very high-interest rates, also because the government is actually shaking down speculators in the market. These are all adding up to force the dollar to come down,” he said.
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