CENTRAL BANKING AND MACROECONOMIC UNDERDEVELOPMENT.PART 13

13.CENTRAL BANKING. and is also driven by demand of consumers ability to even borrow naira.This has to do more with the peoples'access to bank funding,rather than being related to earning ability per capita.Exchange rate adjustment measure or indicators that control demand is what is invariably adjusted.The essence of monetary policy to raise rate higher is to discourage demand same with fiscal controls. The controls are haphazardly applied to encourage the differentials in the two markets.It is unfortunate that despite other countries that apply these controls,they barely have this differentials.A highly unproductive situation people getting richer for doing nothing created a loophole for some people to benefit from,moving money from official market to parallel market profiting from selfish margin and consequently plummeting the value of local currency. Inasmuch as it is expedient to try and boost the manufacturing sector,we should make do with what we have presently. When we float the naira and stop controling forex market,the deregulated foreign exchange will be a great boost to real sector.We can't avoid this option and to do so can be likened to postponing the evil days.Every time we control a common item say rice or cement or so to say importers should get import licence to import, and you heighten the smuggling problems on the other side or you sell cement at fixed price.This is unprofitable as we are only magnifying the problems associated with control