L
LequteMan
Guest
Nigeria -- The Central Bank of Nigeria, CBN, has released a statement stating it's decision about a devaluation of the Naira.
Several experts had called on the CBN to devalue the Naira in order to adjust to economic needs.
Read: Naira'll Soon Crash to N250/$ - Experts Call for Devaluation
However, in a statement signed by its Director, Corporate Communications, Mr. Ibrahim Mu’azu, maintained that the CBN does not panic and will not take desperate measures to satisfy few misguided interests in the market.
Mu’azu, who was reacting to an article in the Economist Magazine, he said the article seemed to ignore the fact that the exchange rate is simply a price that is essentially determined by the forces of supply and demand, adding that the CBN believes that the 48 per cent decline in oil prices may not be transitory and made bold policy changes including closure of the subsidized Official Foreign Exchange (Forex) Window, which resulted in a 22 per cent depreciation in the currency, the Naira.
“Contrary to the article’s argument, adjustments to a sharp decline in supply of US Dollars cannot all be borne by an indeterminate depreciation, without considering the full impact on the Nigerian economy.
“The demand side also has to be considered, not just in response to the pressure on the Naira but as an opportunity to change the economy’s structure, resuscitate local manufacturing, and expand job creation for our citizens.
He lamented the tendency of Nigeria to import most of the goods it uses, stressing that the action will only weaken the economy.
“But now is a good opportunity to begin a reversal. Although the article hastily derides this idea as lacking in economic foundations, it is the same principles upon which many other countries do not allow importation of certain products.
“More also, if the article believes the CBN should adjust to reflect the current parallel market rate, why was this suggestion not made in the week following the inauguration of President Buhari when the same rate fell sharply to under N190 per Dollar?
“Furthermore, it appears condescending to suggest that the list of items seemed ‘to have been drawn up by someone wandering around a house and a building site’. On the contrary, items were only included after thorough and exhaustive discussions at the highest policymaking body of the Bank, with the strategic national interest of Nigeria”.
“With ingenuity and productiveness, we believe that Nigerians will seize this opportunity and use it for the greater good of the country. As we transition into a new administration in Nigeria, we must continue to ensure policy stability at all times”, he concluded.
Several experts had called on the CBN to devalue the Naira in order to adjust to economic needs.
Read: Naira'll Soon Crash to N250/$ - Experts Call for Devaluation
However, in a statement signed by its Director, Corporate Communications, Mr. Ibrahim Mu’azu, maintained that the CBN does not panic and will not take desperate measures to satisfy few misguided interests in the market.
Mu’azu, who was reacting to an article in the Economist Magazine, he said the article seemed to ignore the fact that the exchange rate is simply a price that is essentially determined by the forces of supply and demand, adding that the CBN believes that the 48 per cent decline in oil prices may not be transitory and made bold policy changes including closure of the subsidized Official Foreign Exchange (Forex) Window, which resulted in a 22 per cent depreciation in the currency, the Naira.
“Contrary to the article’s argument, adjustments to a sharp decline in supply of US Dollars cannot all be borne by an indeterminate depreciation, without considering the full impact on the Nigerian economy.
“The demand side also has to be considered, not just in response to the pressure on the Naira but as an opportunity to change the economy’s structure, resuscitate local manufacturing, and expand job creation for our citizens.
He lamented the tendency of Nigeria to import most of the goods it uses, stressing that the action will only weaken the economy.
“But now is a good opportunity to begin a reversal. Although the article hastily derides this idea as lacking in economic foundations, it is the same principles upon which many other countries do not allow importation of certain products.
“More also, if the article believes the CBN should adjust to reflect the current parallel market rate, why was this suggestion not made in the week following the inauguration of President Buhari when the same rate fell sharply to under N190 per Dollar?
“Furthermore, it appears condescending to suggest that the list of items seemed ‘to have been drawn up by someone wandering around a house and a building site’. On the contrary, items were only included after thorough and exhaustive discussions at the highest policymaking body of the Bank, with the strategic national interest of Nigeria”.
“With ingenuity and productiveness, we believe that Nigerians will seize this opportunity and use it for the greater good of the country. As we transition into a new administration in Nigeria, we must continue to ensure policy stability at all times”, he concluded.
