CBN: Lagarde knows Buhari can’t decide for us

Moses Tule, director of monetary policy department of the central bank of Nigeria (CBN), says Christine Lagarde, managing director of the IMF, knows too well to say or think that President Muhammadu Buhari decides for the CBN.

Speaking with TheCable on Friday, Tule said governments all over the world do not like to dabble into monetary policy decisions made by central banks.

When asked if Buhari could influence the decision of the CBN on foreign exchange policies as said by Lagarde, considering the autonomy of the apex bank, Tule said: “Madam Lagarde knows better than what you have just said and she would never say that she hopes the president changes the monetary policy and I can bet you that she did not say so.

“What she would have said is that the country should consider revisiting its monetary policy and look at the possibility of a flexible exchange rate. That Madam Lagarde can tell you and she said this also when she visited Nigeria in January.

“That is different from asking the president to change the monetary policy; she knows that the central bank of Nigeria has autonomy in its operations and in the conduct of its monetary policy.

“Let me also add that in today’s world, governments are careful in intervening in the way the central banks conduct monetary policy because monetary policy is a public good and if you don’t do it properly, it’s clear to everybody that you are not getting it right. So it is not like a legislature that the government comes and legislate.”

During the World Bank/IMF meeting earlier in April, Lagarde had expressed hopes that President Buhari will be more flexible with Nigeria’s forex policy.

Tule made it clear that isolating the foreign exchange policy from a holistic suite of policies would not solve Nigeria’s problem.

“The only difference between what we are doing and what the IMF wants us to do is that we have looked at holistically what the issues are and as a country we have said we would want to take exchange rate management in a holistic suite of policies; we don’t want to isolate it as the single policy that will solve the country’s problem.

“The background is clear that we have done quite a lot since independence and with all that we have done, we have consistently neglected the other policies that were supposed to have accompanied the exchange rate policy.

“This time around, we are saying we are going to do it differently. We are not going to neglect the other policies that must accompany the exchange rate policy and that is why some people are saying that go ahead and neglect those policies… it doesn’t matter; go ahead and do that of exchange rate, we would get to Eldorado and the central bank is saying we would not get to Eldorado. We have gone this cycle several times and we must take exchange rate policy as one policy from a menu of policies.”