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JET A1 crisis: Operators fear industry collapse, job losses

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…One hour flight ticket hits N150,000

The persistent rise in the cost of aviation fuel, known as jet A1, is beginning to cause apprehension in the minds of stakeholders in the industry as they express fears that the sector may collapse and there may be huge job losses if the rising cost is left unchecked.

As of Friday, reports indicated that Jet A1 fuel had risen from about N300 per litre in February to about N1,000 per litre, causing a significant increase in the cost of tickets.

Aviation Round Table, which is a body of professionals in the sector, said more airlines might be forced to halt operations, in addition to the two domestic airlines not in operation at the moment. Aero Contractors had on July 18 announced the suspension of its operations, citing the impact of the challenging operating environment on its daily operations, while the Nigerian Civil Aviation Authority on July 20 suspended the operations of Dana Air.

 

In an interview with one of our correspondents, a former Managing Director of the Nigerian Airspace Management Agency and Chief Executive Officer, TopBrass Aviation Company Limited, Capt. Roland Iyayi, said government must work towards reviving the refineries for the local production of JetA1. He added that government should consider supporting airlines in aviation fuel pricing in the short term.

He pointed out that many people were no longer travelling by air due to the hike in the price of tickets. This, he said, posed great danger to the survival of airlines and the aviation industry.

Iyayi added, “The key to the success of any airline is affordability. If fares are unaffordable, what you will end up having will be empty flights. Now, when you have empty flights, it will become a double whammy. At this point, how do you manage the sustainability of the airline?

“So, ultimately what we will have will be more airline failures. And if more airlines fail, it means that capacity will reduce and when this happens you will get very high fares. That is essentially what we are looking at now and it is a very precarious situation for the industry.

“This means there is imminent danger in the entire industry and it is bound to spiral out of control if something is not done urgently. So if the government considers aviation as a critical asset, I would expect it to intervene in JetA1 pricing.”

Also, the Assistant General Secretary of the Aviation Round Table, Mr Olumide Ohunayo, noted that the sector had been severely hit by the fuel crisis due to its dependence on importation and the high foreign exchange rate.

In an interview with Sunday PUNCH, he added, “The Russia-Ukraine war has increased the average cost of fuel and all forms of gas productions, and this is exacerbated for Nigeria because of the weakening naira to the dollar. That has increased the pain on the airline and even the supplier. What we have is that one airline is grounded voluntarily and the other involuntarily.

“If things do not return to normal, other airlines may also be grounded. That is where we are going. It is funny that the government is telling us now, through the senate committee, that some of the aviation fuel is being exported to neighbouring countries and sold there.

“Though it is deregulated and the government does not subsidise it, why would they not be able to monitor the distribution that they have to move to neighbouring countries? Something is wrong. We need to tighten control on it.”

He urged the government to look at the port charges and taxes on aviation fuel and see if it could be suspended temporarily, pending when the price returns to normalcy. He added that it was risky to continue waiting for Dangote Refinery to start operations, noting that there must be a way to address the problem without delay.”

Ticket hits N150,000

Meanwhile, the cost of an economic ticket for an hour flight on domestic routes has increased by about 400 per cent in less than five months. It rose from about N30,000 in February 2022 to about N150,000 as of Saturday. This has been tied to the high cost of aviation fuel.

Although the latest cost varied among various airlines, findings showed that the few surviving domestic carriers had raised the price of air tickets to match the rise in the cost of aviation fuel.

As of 9am on Saturday, it was observed that the airfare for 12.45pm flight to Lagos from Abuja on Nigeria’s largest commercial airline, Air Peace, was put at N150,000, while that of 5.35pm went for N100,000.

For MaxAir, the 7.20am Sunday flight ticket from Kano to Lagos went for N130,000, while Lagos bound flight tickets from Abuja on Saturday were sold at N90,000.

The rates, however, differed on some other routes, as Ibom Air’s 6pm flight ticket on Saturday from Abuja to Uyo, for instance, went for N86,000.

Airline operators justified the jump in airfares, attributing it to the hike in aviation fuel, which accounted for about 60 per cent of the cost of operations of an aircraft.

This, according to them, had also caused lamentations among air travellers and led to a drop in the passenger volume lately, as they expressed fears of more airlines’ failures and a possible collapse of the industry if nothing was done urgently to salvage the situation.

Iyayi analysed how a commercial aircraft consumes fuel and what operators spend on fueling their airplanes for an hour flight.

He told one of our correspondents that most carriers in Nigeria were currently struggling to survive.

He said, “It is possible for aviation fuel to cause a jump in the cost of air tickets and the reason is very simple. Fuel as a component of operation is about 40 to 60 per cent of the cost of operating an aircraft. So when you take a flight that will last an hour, for instance, a Boeing 737, the fuel it burns is about 2.5 tonnes an hour.

“If you translate that into litres, you’re talking of 104,000 litres. At the current rate of fuel being N1,000/litre, what that essentially means is that an airline must sell tickets to cover the cost of fuel, which will be approximately N4.5m for that particular flight.

“So at N4.5m, if you are selling at N100,000 you will need to sell 45 seats to even cover that cost alone. That is not talking about the maintenance reserves, crew cost, insurance and all other factors that you need to consider for your cost of operations to be covered. Therefore, if you look at it from the perspective of just fuel, what you have are airlines struggling to even cover their cost. There is no margin left.”

He said if the charges to be paid to the various agencies and regulators were added, the fate of the airlines could best be imagined.

He added, “You need to also know that five per cent of whatever revenue they make goes to the NCAA. Essentially, we are saying that even before an airline starts operations, it is already struggling. Hence, airlines cannot continue to sustain losses for all the other agencies and service providers to thrive in the industry. This has been the situation in the last decades.

“The truth is that airlines are operating in the most difficult and hostile environment in the Nigerian landscape.”

Also commenting on the situation, another major operator in the domestic air transport business berated the Central Bank of Nigeria for failing in stabilising the naira against the dollar.

“If you were buying fuel at N200/litre and all of a sudden you start buying it at N900 to N1000/litre due to the crash in your local currency, will you be happy with your Central Bank?” the operator, who spoke anonymously due to the sensitive nature of the matter, asked.

The airline operator added, “If the system gets better, then the cost of tickets would drop. But for now, that’s what you get if you must fly a safe aircraft. The CBN, the Federal Government and the Petroleum Resources Ministry must answer questions and tell us how they want to help address this concern.”

The umbrella organisation for the country’s domestic carriers, Airline Operators of Nigeria, had attributed the crisis in the sector to the high cost of JetA1 and the difficulty in accessing foreign exchange required for the business.

Another aviation expert and President, Association of Foreign Airlines and Representatives in Nigeria, Kingsley Nwokeoma, said there were fears that another domestic carrier might suspend operations soon.

He added, “Of course, we saw Aero’s coming and it happened. We also saw what happened to Dana. The question is who’s next? Apparently, when we have issues and everybody is trying to work around staying afloat, there is the tendency that safety might be compromised.

“From last year to this year, we have been having this price increase in airfares, moving from N30,000-plus to over N50,000 and now about N100,000. Now who is going to fly?

“The flying public will have to look for alternatives. So the government needs to sit down with the carriers if we are to still have a domestic aviation sector, because the average man can’t afford these tickets. That’s the truth.”

He, however, stated that the price hike in air tickets was justifiable, as the major component in the air transportation business had also skyrocketed in cost.

The AFARN president added, “Aviation fuel is the major component. So, if you don’t have fuel, you can’t fly. The fuel price is going astronomically high and that means it will reflect on the tickets. So it’s a serious situation that we have here, just like Allen Onyema (Chairman, Air Peace) said during the Nigeria Aviation Conference.”

Nwokeoma added, “He (Onyema) said it might get to a point where we would not even have carriers flying, because if you are spending all your money on buying fuel, then what of the other components like maintenance, payment of salaries, training, etc.

“So it’s the situation that we have here and it might degenerate if the government does not sit down with these carriers and find the solution on how to manage this crisis, for we are not close to a crisis. We are in crisis already.”

Nwokeoma observed that though the government had been meeting with airlines on some of those issues, such meetings had yet to yield the desired results.

However, amid these challenges, the NCAA promised to ensure that the air transportation business remained safe.

“It is our core mandate to ensure that the aviation sector is safe and that is what we’ve been doing and will continue to do,” the spokesperson for the NCAA, Sam Adurogboye, told one of our correspondents.

A senior official at the Federal Ministry of Aviation stated that the aviation minister had made it clear that there was no immediate solution to the crisis in the sector though efforts were being made to address the challenges.

Passengers groan

Meanwhile, air passengers have been lamenting over the disruption to flight schedules in the last few days on account of the crisis in the sector. Visits by our correspondents to the domestic wing of the Murtala Muhammed International Airport Lagos and that of the Nnamdi Azikiwe International Airport in Abuja, observed huge crowds in the terminals, with many lamenting the postponement or outright cancellation of their flights.

Job loss looms

There are fears that the suspension of operations by Aero and Dana and the growing uncertainty in the sector may put about 8,000 jobs on the line. Some aviation analysts told Sunday PUNCH that it would be almost impossible for an airline that was no longer working to continue to pay salaries and retain its staff strength. Indications have therefore emerged that the troubled domestic airline industry may succumb to job losses.

This came amid an ongoing investigation of the financial health of some local carriers believed to be in crisis by the NCAA.

Findings show that unless the crisis abates, over 8,000 domestic airline jobs may be on the line.

According to industry analysts, a significant number of jobs may be lost in the event that one, two or three carriers go under.

Findings show that Aero currently has 730 employees, while Dana has over 820. Air Peace has over 3,500 workers while Arik Air has over 1,100 employees. The number of workers engaged by Max Air, Overland Airways, Azman Airlines and Ibom Air and Green Africa Airways has been put at over 3,000.

A former Managing Director, Associated Airlines, Alex Nwuba, said, “The crisis currently affecting the domestic airline industry may lead to the industry’s collapse if the government fails to tackle the issues.

“Also, some airline jobs may be lost if some of the carriers fail to survive this crisis. This is a major problem in our hands. The foreign exchange scarcity, JetA1 exorbitant prices, high taxes, among others are issues that may make the industry collapse or the sector succumb to major job losses.”

Nwuba, who is the President, Aircraft Owners and Pilots Association of Nigeria, explained that the skyrocketing price of aviation fuel had negatively impacted on the costs of other components in the airline business.

He said, “Clearly, the costs in this business have completely gone out of control. Therefore what is an airline going to do? It has two choices: first, the airline is going to increase its revenues by increasing its charges to cover those costs or to ask themselves, can we continue in business because we are simply heading down the hill, which is what Aero has done.

“The second case is, while still contemplating that decision and already in a slide, the government says to a particular airline that ‘we do not think you can continue given these factors, so we will suspend your operation,’ as in the case of Dana Air.

“So, if the airlines go out of business or reduce their operations, they would have to also start to manage their costs and one of the ways in which they manage cost is to say we will lay off staff because that is one component of cost.

“This also has an adverse effect on the economy. If productivity is down, it is not just the airline that suffers, the GDP and all of the elements that make for economic growth are diminished. One person’s job loss is not that individual’s job loss. It is a loss to the family and the environment. Basically, the effect is not on the airlines but on the entire economy in view of the fact that we already have unemployment in very high numbers.”

Operators stated that currently in the domestic aviation space, the functional airlines were now few, including Air Peace, Ibom Air, Azman, Green Africa Airlines, Arik Air, Max Air, among others.

Emirates slashes flights to Nigeria over withheld $85m

Meanwhile, Emirates Airlines has said it will reduce its flights to Nigeria from August 15, due to its failure to repatriate the $85m it generated from the sale of ticket sales in the country.

The airline said it would be forced to reduce weekly flights from Dubai to Lagos from 11 to seven. It said it was constrained to take the action.

These were contained in its July 22 letter to the Minister of Aviation, Hadi Sirika, and signed by Sheik Majid Al Mualla, the DSVP International Affairs.

The letter explained that as of July 2022, Emirates had $85m of funds awaiting repatriation due to non-availability of dollars in Nigeria and that the figure had been rising by more than $10m every month, as the ongoing operational costs of the airline’s 11 weekly flights to Lagos and five to Abuja continue to accumulate.

“We simply cannot continue to operate at the current level in the face of mounting losses, especially in the challenging post COVID-19 climate. Emirates did try to stem the losses by proposing to pay for fuel in Nigeria in naira, which would have at least reduced one element of our on-going costs, however this request was denied by the supplier. This means that not only are Emirates’ revenues accumulating, we also have to send hard currency into Nigeria to sustain our own operations. Meanwhile, our revenues are out of reach and not even earning credit interest,” the letter added.

The mega carrier said the funds were urgently needed to meet its operational costs and maintain the commercial viability of its services to Nigeria.

PUNCH

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Appeal Court Exonerate Zenith Bank, Upturns High Court Judgement Slam Fine on Real Integrated & Hospitality Limited

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After several months of legal tussle between Zenith Bank Plc v Real Integrated & Hospitality Limited and State Universal Basic Education Board (SUBEB) Gombe State, a three-man panel in the Court of Appeal sitting in Lagos led by Justice Muhammed Sirajo in Appeal No:CA/LAG/CV/262/2022 – have unanimously upturned the Lagos State High Court judgment of Justice O. O. Abike-Fadipe over claims that; on March 8, 2022, there was a breach of contract because on October 7, 2011, Zenith Bank refused Real Integrated to withdraw from its Account No. 1012465427. In her judgment, she directed Zenith bank to pay an interest of 15 per cent per annum on the N872,780,522.84 from May 17, 2011, when the advanced payment guarantees expired till judgment and thereafter at the rate of 10 per cent per annum until final liquidation

 

Through Zenith Bank’s team of counsel led by Prof. Fabian Ajogwu, SAN and Mr Sylva Ogwemoh, SAN, the bank challenged Justice O. O. Abike-Fadipe’s decision of awarding N2,500,000 as the cost of the action in favour of Real Integrated. The legal team via valid argument backed by proofs argued and sought an order setting aside the lower court decision on the ground that it acted in full compliance with its contractual obligations in line with the Advanced Payment Guarantee (APG) contract and that the trial court was wrong. The Court of Appeal, in a unanimous decision on November 23, agreed with the bank’s submission and resolved all the issues raised in its favour. It was gathered that; the 1st Respondent, through its Counsel, E.O Jakpa, argued that the bank breached the contract while SUBEB Gombe State did not contest the Appeal.

Apart from the appellate court setting aside the judgment of Justice Abike-Fadipe, the judge also awarded a cost of N200,000 against Real Integrated & Hospitality Limited and in favour of Zenith Bank. The appeal court further stated that the lower court judgment was upturned on the ground that the trial court was wrong to have presumed that the bank withheld the full account statement of Real Integrated in the light of Exhibit C6 (the comprehensive Statement of Account of Real Integrated), which was tendered by the bank for a limited purpose, adding that there was no need for the lower court to have invoked Section 167 (d) of the Evidence Act, 2011 against the bank.

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Dollar crisis: EFCC plans massive raid on forex dealers

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The Economic and Financial Crimes Commission on Tuesday carried out simultaneous operations against Bureau de Change operators in Abuja and Kano, as the Naira slumped to N857 to a dollar at the parallel market.

The PUNCH gathered that the raids in the two cities, which netted a good number of illegal BDC operators and individuals suspected to be customers, would also be extended to Lagos, Onitsha, Ibadan, Port Harcourt and other major cities across the country.

Our correspondents learnt that the incident disrupted the day’s business as many of the BDC operators in Abuja went underground.

This is happening as the EFCC arrested the Kogi State House of Assembly candidate of the New Nigeria Peoples Party, Ismaila Atumeyi and two others with N326m and $140,500 cash.

 

The black market forex dealers were carrying on their business activity as usual when the EFCC operatives backed by armed policemen stormed their makeshift stalls located opposite the Sheraton Hotel in Zone 4, Wuse, Abuja and took many of them into custody.

An eyewitness noted that the arrested suspects were dragged into waiting vehicles as the incident stalled traffic in the area.

In the wake of the Central Bank of Nigeria’s announcement that the redesigned naira notes will replace higher notes to fight counterfeiting, inflation and insecurity with effect from December 15, the national currency has continued to be under pressure against the dollar.

The development was blamed on BDC operators and individuals desperate to convert their ill-gotten money into hard currency.

The EFCC Chairman, Abdulrasheed Bawa had endorsed the planned redesign of the naira and cautioned BDC operators against currency hoarders who would attempt to seize the opportunity to offload the currencies they had illegally stashed away.

Giving an insight into the raids in Abuja and Kano, a senior official explained that the EFCC has been monitoring the activities of forex dealers in the two cities, adding that the operations were intelligence-led.

Planned raids

He also disclosed further that the raids would be extended to Lagos, Port Harcourt, Maiduguri, Ibadan and other cities across the country to stop BDC operators from ‘destroying the naira.’

“Today’s (Tuesday) operations were successful as they were intelligence-led. We have placed various bureau de change points under watch since the CBN announced the redesign of the naira.

“So, we know that those with illegal wealth would want to take advantage of the development to off-load their stash and convert it to dollars. It is not a one-off operation; it would be extended to Lagos, Port Harcourt, Maiduguri, Ibadan, Onitsha and other cities,’’ the official disclosed.

“The EFCC spokesman, Wilson Uwujaren confirmed the raid on the forex dealers in Abuja and Kano but said he has no information on the planned operation in other cities.

“I can confirm that our operatives raided the Wuse Zone 4 area of Abuja today and arrested some BDC operators. However, I can’t confirm the number of suspects arrested yet,’’ he stated.

But speaking with The PUNCH after the raid, a forex dealer in Abuja blamed the EFCC for the crash of the local currency.

“We are all in hiding. We sell at N857/$ now. I told you it was N850/$ in the afternoon but that rate is no more possible at this time. The dollar is very scarce because the EFCC entered the market today. Maybe things will change tomorrow (today),” a forex dealer, Abubakar Attahiru, told one of our correspondents on the telephone at 6.12 pm on Tuesday.

Another BDC operator offered to buy a dollar bill at N855 as long as the seller had large sums of greenbacks.

“The more dollars you sell, the more money you make. If we buy at N850/$ from someone who has $100, we will buy at N852 from someone who has $10,000,” he disclosed.

But the Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwaadabe, said he was fully in support of the raid.

“As an association, we are in support of the raid. We cannot be seeing a lot of irregularities and still support them. It is unlicensed people that have taken over the market. The licensed are not even allowed to operate in the market,” he complained.

He explained that his association was aware of the impact of the proposed naira redesign, which had forced many Nigerians to move towards converting their naira to dollars, noting, however, that it was not a justification for the level of uncertainties in the market.

Economists have said the only major solution to the naira devaluation and the dollarisation of the Nigerian economy is productivity .

According to them, the current situation would hurt all aspects of the economy.

For a Professor of Economics at the Nnamdi Azikiwe University, Awka, Anambra State, Uche Nwogwugwu, the major problem was the CBN’s naira redesign announcement.

“What you have seen in the parallel market is a spasm of fear in the people. Why do you need to change your currency at this time when you have inflationary pressure, falling reserves and an economic downturn?

“If all of a sudden you are compelling people to change their currencies, they will be afraid and you will certainly have this kind of situation,” he said.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, explained that the current devaluation of the naira at over N800 to a dollar would take its toll on the budget deficit of the country.

“In this regard, it will affect the deficit. If we have depreciation in the currency, there will be a variation. So, we are likely to see contract variations by contractors. In some contractual agreements, there’s always a variation clause, such that if cost changes or some fundamental variables change, the cost of the contracts will change.

“So, the cost of government projects will increase. Operational costs will increase, just as it affects everybody because the depreciation of the currency has an effect on inflation.

“The main effects will be inflationary and if there is no adjustment to accommodate that increase, projects will not be completed because the value of the naira has been further eroded.”

Meanwhile, a senior lecturer and economist at Pan Atlantic University, Vincent Olusegun, emphasised that the Federal Government was turning deaf ears to the reality of the naira devaluation.

He said, “In Nigeria, the exchange rate is not a floated one, it is one we have fixed ourselves and not market-determined. So, the government is living in denial that as the naira depreciates every day, they can maintain the exchange rate.

“Also, the exchange rate regime in the country is not market-driven because the government can fix N400 plus to a dollar which is what we are doing. In reality, the ability of the government to meet up with the budget is becoming unrealistic because the purchasing capacity has been reduced heavily.’’

PUNCH

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Buhari backs Emefiele over naira re-design

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Amid controversies over the position of the Finance Minister, Mrs Zainab Ahmed, on the decision of the Central Bank of Nigeria, CBN, to embark on the redesigning of Naira notes, President Muhammadu Buhari said yesterday that the CBN has his support on the project.

Ahmed, at the weekend, declared that the CBN did not carry her Ministry along in the new Naira note plan, warning that the new notes could have dire consequences on the value of the Naira.

But Buhari in a statement by his Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, said he is convinced the nation will gain a lot by doing so.

Speaking in a Hausa radio interview with Halilu Ahmed Getso and Kamaluddeen Sani Shawai, Buhari said reasons given by the CBN convinced him that the economy stands to benefit from a reduction in inflation, currency counterfeiting and the excess cash in circulation.

 

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‘It’ll reduce high inflation’ — Moghalu backs CBN’s proposed naira redesigning
He said he did not consider the period of three months for the change to the new notes as being short.

According to him, “people with illicit money buried under the soil will have a challenge with this, but, workers, businesses with legitimate incomes will face no difficulties at all.”

Experts call for harmony

Meanwhile, economists and financial experts have harped on the need for harmony between the fiscal and monetary policy authorities while maintaining the independence of the CBN.

David Adonri, Vice-Chairman, Highcap Securities, said that, while it is important for both the CBN and the Finance Ministry to synergise on policy-making in order to achieve a better outcome, the independence of the CBN as obtained in other economies does not require the permission of even the president to undertake a project such as the redesigning of the Naira.

In his words: “The economy is managed by the government through macro-economic policies (fiscal and monetary policies); while the Federal Ministry of Finance (FMoF) is the fiscal authority, CBN is the monetary authority. They are expected to work harmoniously in policy formulation and implementation. Any discord between these authorities is detrimental to economic management.

“Before any policy is formulated by any of them, there ought to be in-depth consultation between them and thorough analyses to know the sensitivity on either side of the economy.

“Although each authority has its areas of exclusivity, which it may exercise without recourse, carrying each other along will facilitate superior policy outcomes.

“In this particular instance, the reasons for changing of currency by CBN are justifiable but there is no reason for not carrying the FMoF along for them to be prepared for the change. Where the monetary authority is independent, which we clamour for, the Central Bank does not even require permission from the President to undertake any monetary action.

“Independence of a central bank is essential so that monetary policy will not be influenced by political expediency.”

Further insight from CBN

The CBN, reacting to the position of the Finance Minister at the weekend, said it was surprised by the minister’s outburst and that due process was followed in arriving at the Naira redesign project, including obtaining the approval of President Muhammadu Buhari.

Also, the apex bank doused concerns about the cost of printing the new notes, saying they will come at no outrageous cost, printed in the country and within the budget of the apex bank.

According to a statement from the CBN’s spokesman, Mr Osita Nwanisobi, the apex bank stressed that the CBN remains a very thorough institution that follows due process in its policy actions.

According to Nwanisobi, the management of the CBN, in line with provisions of Section 2(b), Section 18(a), and Section 19(a)(b) of the CBN Act 2007, had duly sought and obtained the approval of the President, Major General Muhammadu Buhari (retd.) in writing to redesign, produce, release and circulate new series of N200, N500, and N1,000 banknotes.

However, urging Nigerians to support the currency redesign project, he said it is in the overall interest of Nigerians, and that some persons were hoarding significant sums of banknotes outside the vaults of commercial banks. This trend, he said, should not be encouraged by anyone who means well for the country.

Why Naira redesign is necessary — Moghalu

Commenting on the issue, a former Deputy Governor of the CBN, Kingsley Moghalu, said that the decision of the CBN to redesign the naira notes is a ‘necessary step’ for the good of the economy.

Moghalu averred his support for the decision in a series of tweets on his Twitter account on Friday.

He explained that the CBN is trying to gain control over the money supply in the economy.

“I fully support the Central Bank’s redesign of the Naira,” he said. “If 80% of banknotes in circulation are outside the banks, that’s troubling. The CBN obviously wants to force all those notes back into the banking system. Those with the notes must surrender to get new ones or else it becomes illegal tender after January 31 2023.

“This is also a way to withdraw currency from circulation, an unorthodox way of tightening the money supply since the country is battling high inflation.

“The flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.

“I doubt it will solve inflation because there also are other major reasons for inflation such as the forex crisis, which this new move could exacerbate, as well as impact of the security crisis on food price inflation. But overall it is a necessary step.

“I just think the time window for its implementation is rather short. This will put a lot of operational pressure on commercial banks and the financial system in general. A 90-day window would have been better, but one can understand the need to avoid interfering with the elections.”

VANGUARD

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