The Governor of the Central Bank of Nigeria, CBN, Malam
Sanusi Lamido Sanusi, has affirmed that he would not
devalue the nation’s currency – the Naira, saying he would
rather use the nation’s foreign reserves, which currently
stands at $45.27 billion to stabilize the Naira.
Briefing newsmen at the end of the Monetary Policy
Committee (MPC) meeting in Abuja, yesterday, Sanusi said
that the argument of those pushing for the devaluation of
the Naira did not hold water economically especially in an
import-dependent country like Nigeria.
The CBN Governor insisted that the CBN would stick to its
position unless forced to do otherwise.
His words, “as far as the Naira is concerned, the CBN has
always said that we are committed to its stability. I know
there are some people who don’t share that view. But I
have not personally heard any economically valid argument
as to the benefits of devaluating the Naira up to this point
in time.
“It will not improve our export nor reduce our imports into
the country. It will not improve our fortunes as long as our
structural reforms have not been implemented.
“My view and the view of the CBN is that if we will have to
use some of our reserves to support the currency, we will.
No central bank governor will say that he will not support
the currency but we want to be very clear in our minds
and to the public that there is no country in the world that
will allow its currency to be determined by the market.
“Certainly, the currency is neither over-valued nor under-
valued. We are not looking for a stronger currency nor a
weaker one. We just want an anchor of expectations:
people want to pay school fees; people want to import raw
materials; investors want to be able to predict the returns
they would have on their investments; and we think
ultimately that it is more important than having a reserve at
$50 billion or $40 billion.
“We will use the reserves and the interest rates and I believe
we have gone through the most difficult period. Hopefully
the next months will not be as difficult as the last one or
two. We expect that the Naira will be maintained within our
target band but the message is that we are committed to
the stability of the exchange rate and we will not, unless we
are forced, to allow the Naira to weaken. I think I should
make that very clear.”
The CBN boss noted the decline in external reserves to the
current $45.27 billion but was quick to add that it was
better than the $41.19 billion recorded during the same
period last year September ending.
According to him, “the Committee (MPC) noted that this
level of accretion is too low given the relatively high price
of crude oil and further underscores the need for much-
needed reform of the oil sector”, and said measures would
be taken to address the unbridled demand for dollar in the
foreign exchange market.
Malam Sanusi explained a correlation between the high
demand for dollars and money laundering, saying new
policy measures would soon be announced by the apex
bank.
He, however, refused to disclose what the measures would
be despite attempts by newsmen to get him to reveal the
details.
He lamented that, “Nigeria has become the largest importer
of the U S Dollar in the whole world and said that only a
firm policy against the dollarization of the Nigerian
economy could save the situation.”
MPC Decisions
The CBN Governor announced that the Monetary Policy
Rate, MPR, was retained at 12.0 per cent with a symmetric
corridor of 200 basis point around the MPR by the MPC.
His words, “the Committee noted that the actions taken at
the last MPC have served the purpose of helping the naira
avoid the fate of other developing country’s currencies by
keeping it relatively stable. It also noted the continued
moderation in inflation and the benign outlook for the next
six months.
“The Committee decided by a vote of 11 members to hold
the MPR at 12.0 per cent. One member voted to reduce
the MPR by 50 basis points. 11 members voted to retain the
symmetric corridor of 200 basis points around the MPR
while one member voted for an asymmetric corridor of
200 basis points above the MPR and 400 basis points below
the MPR. All members voted to retain the 50.0 per cent
Cash Reserve Requirement (CRR) on public sector funds, and
12.0 per cent CRR on private sector deposits.”
This is dummy text. It is not meant to be read. Accordingly, it is difficult to figure out when to end it. But then, this is dummy text. It is not meant to be read. Period.
ConversionConversion EmoticonEmoticon