Don’t bet on Naira’s devaluation soon, says CBN

By Odunewu Segun

Governor of the Central Bank of Nigeria, Godwin Emefiele, has hinted at the possibility of the current exchange rate band being defended, advising investors not to bet on a devaluation at nearest future.

Emefiele who disclosed this at the second Nigeria Investment Conference organized by the CFA charter at the Eko Hotel in Lagos, got attendees shocked to the bones as the CBN Governor went on the offensive at critics who have for years criticised his economic policies.

He said notwithstanding the fact that the forthcoming elections could exert some pressure on the exchange rate, the FX rate is expected to remain relatively stable. And also gross stability is expected in the FX market, given increased oil-related inflows and contained the import bill.

He hinged his confidence in possible output cuts in Saudi and Russia as well as Iran sanctions kicking in. This, in his opinion, would lead to an upward trajectory in crude oil prices.

He also stated that global interest rates were rising, due to the withdrawal of quantitative easing in the US, UK and EU. He then took a swipe at critics of the MPC.

“So those of you on the day of MPC, that sit down on television and say CBN, for two years, has not touched policy rate, does it mean they don’t know what to do? There are other climes where policy rates have not been adjusted for ten years.”

He said Nigeria’s GDP is expected to pick up in the remaining two quarters of 2018, buoyed by anticipated budgetary and electioneering spending in the near term.

According to the apex bank’s boss, growth is projected to quicken to 1.7 in the third quarter and 1.9% in the fourth quarter of 2018.

“For the rest of 2018 and towards the middle of 2019, inflation is expected to rise slightly too to about 11.5% and then moderate thereafter.”

The CBN Governor also revealed that the ban on foreign exchange for importing toothpicks was in order to create jobs, maintaining that the 41 items would remain banned.

The apex bank Governor also maintained that the economy was resilient and could withstand any anticipated shocks, due to robust foreign exchange reserves.

“Our economy remains strong as evidenced in the stable exchange rate and robust reserves. We are assure you that with numerous policy measures put in place, the economy is very much resilient to anticipated shocks.”