Adedapo Adesanya
By Adedapo Adesanya
Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has shot back at critics who argued that the Africa’s largest economy operates a fixed exchange rate system.
Addressing business reporters on Tuesday after the two-day Monetary Policy Committee (MPC) meeting in Abuja, the apex bank chief said, “There is no where you are going to find the hand of CBN intervening in the determination of the exchange rate.”
“It is not the right statement for anyone to say that there is peg on the Naira,” the former Group Managing Director of Zenith Bank Plc said during the interaction with the media.
The CBN chief, speaking on the bank’s intervention at the foreign exchange market, said that the bank would maintain its policy of sustaining the different exchange regimes in the system, which he said has seen flexible performances.
“Investors and exporters windows trade at market. As you know that the price at that market is not fixed, the price varies from N359 sometimes trade upward as high as N364.
“And as more inflow comes into the market, the price trade downwards. To say there is peg in Naira is misleading,” he further stated.
Mr Emefiele, however, said the only way the bank intervened in the market was either to buy dollars if the rate was low at level where the bank felt it wanted to buy.
He added that the apex bank often sells in line with its managed float regime, which it currently run, noting that this does not amount to a peg as critics have claimed.
The CBN Governor also said the decline in the nation’s foreign reserves from $40 billion to $39.3 billion does not call for alarm. According to him, this is not enough to create panic.
“During the period when we had economic crisis in 2015, 2016 and early 2017 where reserves dropped to $23 billion, the country managed it and it survived.
“We do know that there is focus on the fact that crude oil price is not as resilient as it was in 2018.
“We believe that crude oil price today at $63 per barrel, notwithstanding the drop in reserves below 40 dollars should not cause any panic,” he said.
