The Managing Director of Sovereign Finance Limited, Olusola Dada, has said the unification of exchange rate will in many ways support growth of the economy and small and medium enterprises (SMEs).
He spoke during a webinar titled “Unification of Exchange Rate: Impact on Nigerian Small & Medium Enterprises” held in Lagos and organized by Sovereign Finance Company Limited.
He emphasised that the exchange rate unification is a favourable policy with the potential to transform the nation’s economic landscape.
He commended the implementation of the exchange rate unification policy in the country, noting that it has the capacity to transform the economy.
He however submitted that the success of the policy is largely dependent on the government’s ability to promptly address leakages in the system, resolve security challenges, boost crude oil production capacity, and promote export-oriented businesses while deploying necessary monetary tools to combat inflation..
According to Olusola, “The unification of exchange rates will benefit businesses directly as it will increase transparency and predictability in the market, improve planning and risk management, simplify transactions, enhance competitiveness, and increase foreign direct investments.”
Chief Commercial Officer at Sovereign Finance, Olatunji Esan, explained in his presentation that the successful floating of the currency regime marks a significant shift, with market forces now determining the exchange rate in Nigeria.
He argued that the inflationary impact of the exchange rate unification will be minimal, as most businesses already sourced their foreign currency from the open market before the policy came into effect.
He further remarked that the unification of exchange rates will eliminate market distortions, particularly arbitrage, establish a level playing field for all participants in the forex market, and instill confidence in investors.
Sovereign Finance Limited, a leading financial services provider, is committed to delivering innovative financial and investment solutions to customers across different sectors of the Nigerian economy. Their primary goal is to create opportunities for clients to accumulate capital and build sustainable wealth.
