Emefiele backs Osinbajo, says CBN not floating the naira

January 24, 2017 8:02 pm

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), on Tuesday revealed that the CBN would not float the naira.

Instead, he said the bank would continue with a managed float regime.

“The reserves today, I am happy to say is $28.9 billion,” Emefiele said.

“It is exciting to see this happen, but is there a need to float the naira? It is important for us to know that we do not run a float regime; we run a managed float.

“What that means is that from time to time, we would continue to intervene in the market to ensure that the exchange rate doed not go beyond our own expectations and those interventions will be to manage the risks, as we deem necessary.

“The fact that we began to see some accruation to reserves does not mean that we have to be reckless; we would continue the policy of ensuring that foreign exchange is available to those who are importing raw materials, who are importing plants and equipment, who are supporting the agricultural sector.”

Vice-President Yemi Osinbajo, who spoke in Davos, Switzerland, last week, had said the country could not simply float the naira.

“We simply can’t allow the currency to float; we have to look at all of the market conditions and all of that,” Osinbajo had said.

And Emefiele, who spoke at the conclusion of the monetary policy meeting in Abuja, said the country’s forex policy is sound, and asked manufacturers and business owners not to panic.

“[What] we have [been] operating since June 20 is flexible, and like I said, that document remains a sound document. But, of course,one way or the other, there may be few issues, a few fine-tuning that has to be made in terms of the implementation strategies, and we would look at it from time to time.

“I would like to say there is nothing wrong with that document, and there is nothing wrong with what the central bank is doing at this time to stabilise the exchange rate and see to it that the currency stabilises at a rate that we consider to be in line with any model that anybody wants to use to determine the price or value of our currency.

“We would continue to assure those who are doing their businesses that as you require foreign exchange, we would continue to support you, and there is no need to panic.”