Speaking yesterday in Abuja, the Central Bank of Nigeria Deputy Governor designate, Dr. Joseph Nnanna, said Naira is not devalued, rather that CBN merely announced a new exchange rate in compliance with market forces.
He stated this when he appeared before the Senate Committee on Banking, Finance and other Financial Institutions. “The central bank did not devalue the naira so to speak; it only followed the three principal markets in Nigeria – the official, the retail and the parallel.”
Dr. Joseph further explained that the CBN will not pursue the policy permanently because it will elapse with the current positive transformation in the agricultural sector, which would make it possible for products to be exported to bring more foreign exchange to the country.
“We better do it now than later when we will have import control, which would bring about essential commodity crisis. Nigerians should be patient. Unfortunately, Nigerians are always in a hurry. Let us give the central bank time to pursue a policy that will be a blessing to all of us. I commend the CBN for being proactive with the policy.”
"My take is that since we have development banks like the Bank of Industry (BoI), Nexim Bank, Bank of Agriculture, and so on, we can recapitalise all of them and mandate them to lend at a fixed interest rate to entrepreneurs and other investors willing to invest in the Nigerian economy.
“We cannot force the management of a private commercial bank to lend at a fixed rate because they will take into consideration the risk premium, especially when most people borrow without the intention of repayment.
In support to the CBN action yesterday , the International Monetary Fund (IMF) Mission Chief for Nigeria, Mr. Gene Leon said in a statement , “We are supportive of and welcome these actions, which we view as complementary and moving in the right direction. Of course, the global situation remains fluid and the key issue is being ready to manage downside risks and for the authorities to be prepared, based on assessments of credible scenarios, to consider additional measures, as necessary.”
“In a combination of actions, most recently the communiqué after the Central Bank of Nigeria’s Monetary Policy Committee meeting of November 24-25, the authorities have announced a set of policies aimed at mitigating the impact of the recent significant fall in global oil prices on the economy. These include: adjusting the exchange rate, resubmitting the Medium Term Expenditure Framework to the National Assembly with proposed tax and expenditure measures to achieve the deficit target consistent with a lower budget oil price and tightening monetary policy as necessary.” Mr. Gene added.
Source: SunNews
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