Menu Close

There’s no devaluation of Naira —Central Bank

Central Bank of Nigeria Headquarters

* Insists foreign reserves sufficient to meet all obligations

Isola Moses

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has foreclosed the possibility of devaluing the Naira.

ConsumerConnect learnt that the Bankers’ Bank states it has sufficient foreign reserves to meet all its obligations without recourse to hurting the nation’s currency.

Mr. Godwin Emefiele, Governor of CBN, who made the disclosure at the 271st MPC meeting and first one this year Friday, January 24, in Abuja, said the decision was taken by all the 11 members of the MPC in attendance.

Sources say Mr. Emefiele responded to speculations by economic experts who had opined that CBN might devalue the Naira amidst a sharp reduction in foreign reserves from about $47billion to $38billion in few months in 2019.

“We should realise that reserves are there to meet obligations. At times it’ll go up and at times, it’ll reduce.

“But with reserves of about $38billion today and crude prices hitting up to $70 a barrel, we can sustain the economy without devaluing the Naira.

According to the Governor, “adjustments won’t happen. Our reserves level will meet all our obligations.

“Anyone expecting us expecting us to adjust the Naira should know that it won’t happen,” he said.

Nevertheless, the CBN Governor warned the fiscal authorities against further heavy borrowing.

The nation’s debt status has become a cause for concern, he declared.

According to Emefiele, the narrative that Nigeria’s debt to GDP ratio was about the lowest in the world should not spur the fiscal authorities to hurt the economy with huge debts.

He advised the Federal Government to seek better ways of running the economy without boxing Nigeria into a debt trap.

The MPC, according to Emefiele, held all money policy parameters, except the Cash Reserve Ratio (CRR) that moved from 22.5% to 27.5%.

“So, Monetary Policy Rate (MPR) remains 13.5%, liquidity ratio is at 30% and the asymmetric corridor at +200 and -500 basis point around the MPR”, he said.

He therefore, itemised the economic headwinds the country is facing to include lack of fiscal buffers, rising debt, poor infrastructure, weak public and private sector investments, unemployment and insecurity among others.

The Federal Government should speedily address the insecurity challenges, especially the perennial farmers-herders clashes which have continually affected the volume of locally produced foods, he advised.

Apex Bank said it provided aggregate credit of N446billion to the manufacturing sector in 2019, while general commerce got N248.8billion and transportation and storage got N68.61 billion respectively.

Emefiele commended President Muhammadu Buhari on signing the Finance Act 2019 into Law.

He stressed the CBN hopes the full implementation will help grow the economy.

Kindly Share This Story


Kindly share this story