Analysts in the financial said the reappointment of Governor of Central Bank of Nigeria, Mr. Godwin Emefiele, for a final term of five years by President Muhammadu Buhari, would bring stability to the nation’s financial system and it is a positive development for the economy and good politics.
At Standard Chartered Conference where the governor was addressing investors as well as in the Foreign Exchange I&E Window which saw increase inflows and a Naira gain yesterday afternoon after the announcement.
The I&E Window began trading yesterday at N362 to a dollar and ended N360.7 to a dollar at the close of business last night.
Bringing the I&E Window in parity with the parallel market.
First appointed in 2014 by President Goodluck Jonathan, Emefiele got a historic second term yesterday when Buhari forwarded his name to the Senate for confirmation.
He would be the first governor of the apex bank to be so reappointed in 20 years.
Speaking on Emefiele’s reappointment, an analyst at Ecobank Nigeria Limited, Kunle Ezun, said the reappointment will be positive for the financial system.
According to him, “For the naira, I do not expect a major shift. The possibility of devaluation is nil as I don’t think there will be devaluation in his second term if approved by the Senate.
“But what I see that the central bank will continue to do is to be intervening in the market to keep the naira around N360/$ and hopefully there would be the capacity to have a single exchange rate, instead of the multiple exchange rate regime we have presently.
“On interest rate, I don’t think there will be any major shift in the monetary policy direction. In the last Monetary Policy Committee, we saw a 50 basis cut. Do I expect a further cut? Yes, but how soon? I can’t say so soon, but we expect that there would be a gradual drop in interest rate, which would be further tied to the fiscal outlook.
“Also, we expect to see more of Anchor Borrowers’ Programme and intervention to the real sector.”
Also, the Chairman, Chartered Institute of Bankers of Nigeria (CIBN), Abuja Chapter, Prof. Uche Uwaleke, described the re-nomination of Emefiele as a good omen for the capital market.
Uwaleke, who is the head of banking and finance department, Nasarawa State University, added: “It is one development that speaks to policy consistency and will further consolidate macroeconomic stability especially with respect to exchange rate and inflation.
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“Investors, both domestic and foreign can have some degree of confidence in the direction of monetary policy, which is positive for the capital market. One thing is now certain: that the interventions by the CBN in critical sectors of the economy especially agriculture and non-agric-based SMEs will continue.
“These will rub off positively on economic recovery efforts especially now that the CBN under Emefiele has signaled an accommodative monetary policy stance. It is equally positive for financial systems stability.
“So, I expect a positive reaction going forward, I would like to see an intensification and effective monitoring of the interventions in particular the Anchor Borrower programme.
“Emefiele should also focus on ensuring increased access to credit by SMEs and generally fostering a low interest rate environment with the support of fiscal authorities.”
Meanwhile, The Association of Bureau De Change Operators of Nigeria (ABCON) said that the reappointment of Mr Godwin Emefiele as the CBN Governor for another term will sustain stability in the foreign exchange market.
ABCON’s President, Alhaji Aminu Gwadabe said this while reacting to the re-appointment of Emefiele for another five -year term by President Muhammadu Buhari, in Lagos.
“The reappointment of Mr Godwin Emefiele is a good foundation to continuous foreign exchange market stability.
“The ABCON Exco and its entire members nationwide congratulate the CBN Governor on his reappointment,” Gwadabe said.
The ABCON chief noted that Emefiele had excelled in many ways which included, uniform exchange rates in the market, elimination of exchange rate volatility and the deepening of the foreign exchange market, with the introduction of multiple FX windows.
Other achievements by Emefiele included the diversification of the foreign exchange inflows through enhanced investors’ confidence/Diaspora remittances, reduction on the import dependence of the economy through several agricultural borrowers’ schemes and a ban on 42 items that could be readily produced in Nigeria.
The president added that the CBN chief was instrumental in formalising the informal retail foreign exchange market.
While congratulating the CBN boss for his achievements, Gwadabe stressed that ABCON expects the CBN governor to be as proactive as ever through robust engagements.
“We expect a continuous stakeholder’s engagement and the empowerment of BDCs for global best practices.
We also expect a downward review of associated regulatory fees paid by BDCs and the upward review of the margin of BDC transactions.
“Ease of documentation requirements.
“The enhancement of ABCON’s self regulatory status as recommended by the Financial Action Task Force (FATF) recommendations for industrial trade unions,” he said.
Emefiele was first appointed as CBN Governor in February 2014 by former President Goodluck Jonathan.