Naira firms up as PMB hints at FX policy change

The naira strengthened against the dollar to 268 at the parallel market on Tuesday, as President Muhammdu Buhari hinted at a change in foreign exchange restriction policy.

The currency gained N2, moving from 270 on Monday, despite the Central Bank of Nigeria (CBN) closure of the interbank trading window till January 4, 2016.

The president unveiled his policy direction and budgetary plans for 2016, saying he is aware of the problems Nigerians go through in getting forex.

Buhari, who revealed that the CBN was working to address the problems, said “the status quo cannot continue”.

“I am aware of the problems many Nigerians currently have in accessing foreign exchange for their various purposes – from our traders and business operators who rely on imported inputs; to manufacturers needing to import sophisticated equipment and spare parts; to our airlines operators who need foreign exchange to meet their international regulatory obligations; to the financial services sector and capital markets, who are key actors in the global arena,” the president said during his budget presentation at the national assembly.

“These are clearly due to the current inadequacies in the supply of foreign exchange to Nigerians who need it. I am however assured by the governor of Central Bank that the bank is currently fine-tuning its foreign exchange management to introduce some flexibility and encourage additional inflow of foreign currency to help ease the pressure.

“We are carefully assessing our exchange rate regime keeping in mind our willingness to attract foreign investors but at the same time, managing and controlling inflation to level that will not harm the average Nigerian. Nigeria is open for business. But the interest of all Nigerians must be protected.

“To the farmers, traders and entrepreneurs, we also hear you. The status quo cannot continue. The rent seeking will stop. The artificial current demand will end. Our monetary, fiscal and social development policies are aligned.”

The modalities to be employed to ease forex pressure however remain unclear, with Buhari’s initial insistence that the naira would not be further devalued.