The naira eased 0.21 per cent against
The local currency eased after last week's gains, closing at N162.25 to a dollar yesterday after closing at N161.90 a dollar last Friday.
Dealers informed Reuters that some importers had set limit orders to buy hard currency and were in the market after recent gains.
"We expect the naira to strengthen this week because of possible dollar sales by some oil multinational companies," one dealer said.
Oil companies in
The investment and research firm noted that the current over-reliance on oil receipts (oil receipts account for 96.8 percent of the country's total exports) by the government poses a huge threat to the stability of the economy.
It argued that the persistent pressure on the naira could have been minimised if a counter cyclical fiscal policy is developed, saying the CBN cannot continue to defend the naira with foreign reserves.
"To reduce this pressure, an inward looking policy (tax incentives, infrastructure development and production subsidy) should be emphasised to reduce the dependence on imported goods.
"Asides from oil receipts, the development of the agricultural sector will in the short term reduce the foreign exchange burden of food imports and over the long term enhance foreign receipts if its comparative advantage in the sector is efficiently deployed," it added.
It stated that a review of the economies of other oil dependent countries (
"The Nigerian government should work towards a longer term commitment to benchmark oil prices, as against the current yearly debates and bargaining that surrounds budget preparation. In addition, emphasis should be geared towards the diversification of the foreign receipts base of the economy.
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