The Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele. at the spring meetings of the 2022 International Monetary Fund (IMF) alongsi
and the Honourable Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed
April 22, (THEWILL) – The Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, has reiterated the bank’s commitment to effective management of foreign exchange (forex) demand, to ensure appropriate allocation to priority areas that would support the growth of the economy.
Emefiele, who said this on Thursday, at the sidelines of the spring meetings of the 2022 International Monetary Fund (IMF), currently holding in Washington DC, United States, maintained that the CBN would continue to evolve policies that support effective utilisation of foreign exchange.
While acknowledging the roles of the IMF and World Bank in advising economies around the world, Nigeria inclusive, ruled out free floating as an option for managing the nation’s forex, arguing that developing economies had the liberty of adopting “homegrown solutions” to their economic problems.
“The IMF and World Bank provide advice that we work with. But even at some of our private meetings, we realise that there are challenges, leading us to adopt homegrown solutions to address them. We cannot adopt what is being proposed; we cannot adopt a free float of our currency”, Emefiele said.
He added that the CBN was more concerned about reducing the high demand for foreign exchange and admitted that based on advice from international bodies, the naira rate had been adjusted from N155 to N410.
Emefiele listed the many ways the CBN had worked in reducing demand for dollars, which included the stoppage of forex for the importation of rice and maize, and support for the development of the Dangote refinery, which is expected to reduce demand for foreign exchange for imported petroleum products when it comes on stream.
“With the reduction of forex for rice or maize, demand will drop. As it drops, we can adjust the exchange rate. We will continue to engage the IMF and World Bank”, he explained.
Emefiele said based on the steps taken, the apex bank could not be accused of not adjusting the currency to accommodate economic realities.
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