Dr. Jabil Sayibu
Financial Analyst and Policy Analyst
Solomon Ekanem’s article presents a narrow, short-term view of currency dynamics that lacks proper macroeconomic and policy context. While it is true that every currency experiences fluctuations, labeling a minor correction as a “setback” oversimplifies the complex nature of exchange rate performance and undermines the broader progress achieved.
1. Selective Timeframe Bias The article appears to cherry-pick a brief period of depreciation to discredit months of steady appreciation. Currency performance must be analyzed over a meaningful timeframe, factoring in structural reforms, trade balances, and foreign reserves. A short-term dip, often driven by cyclical or seasonal factors like import cycles or speculative pressures, is not a “setback” but part of a healthy adjustment mechanism in a flexible exchange rate regime.
2. Ignores Structural Improvements The article makes no mention of the policy gains that led to the currency’s prior appreciation — including tighter monetary policy, reduced central bank financing of government, improved current account balance, or strategic interventions in the forex market. These fundamentals remain intact, making any current volatility more reflective of external headwinds than internal weaknesses.
3. Overlooks Global Context Ekanem fails to situate the performance within a global monetary environment marked by high interest rates in developed markets, commodity price swings, and geopolitical shocks. These global factors affect all emerging market currencies. The fact that this currency remains among the top performers year-to-date — even with recent pressures — is a sign of resilience, not regression.
4. Misinterprets Market Sentiment What the article calls a “setback” may, in fact, be a market correction or speculative overshooting that presents opportunities for stabilization. Investor sentiment remains broadly positive, as reflected in bond yields, capital flows, and inflation expectations.
Conclusion Rather than fueling panic with alarmist language, the focus should be on reinforcing policy continuity and transparency. It is more prudent to view the currency’s slight depreciation as a pause in an otherwise impressive recovery — not a collapse. The real test lies not in avoiding all setbacks, but in how institutions respond to them. So far, those responses have been largely credible and effective.
