Sovereign Finance Commends Exchange Rates Unification, Urges Quick Govt Interventions

Sovereign Finance Company Limited, a leading financial services provider, has commended the implementation of the exchange rate unification policy in the country, noting that it has the capacity to transform the economy.

Olusola Dada, Managing Director of Sovereign Finance Limited, who disclosed this during a webinar titled “Unification of Exchange Rate: Impact on Nigerian Small & Medium Enterprises” held on Tuesday, emphasized that the exchange rate unification is a favourable policy with the potential to transform the nation’s economic landscape.

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.”

He called on governments at all levels to expedite intervention programs to help absorb the shockwaves generated by the policy. He also urged business owners to take proactive measures to increase productivity and capacity enhancement in preparation for increased demand once the temporary hike is stabilized and the full effects of the unification policy begin to take its course.

Dr. Olatunji Esan, Chief Commercial Officer at Sovereign Finance, 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.