It is important to address deficiencies observed on the auction, which include delayed settlements arising from more currency being sold than is available. There needs to be confidence in the auction or a formal foreign currency market before driving towards a mono currency. We have already witnessed the unintended consequences of a premature push towards a mono currency in the past two years.
It is important that we move to a single exchange rate at which the entire economy operates, as the presence of multiple exchange rates in the economy encourages arbitrage between the different markets/platforms.
Further engagements are necessary to make this a reality, whether through greater efficiency on the auction or through the interbank/bureau markets or some other appropriate mechanism.
A policy position has to be taken for the efficiency of the auction market where all foreign currency accruing to government through export surrender requirements, local forex earnings surrender requirements, taxes, duties and any other fees received in foreign currency should be put in one pot as a correct supply position for price discovery/determination at the auction.
This would improve the efficiency of the market in price determination.-Own/NewZWire
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