See the Speculated Value of Naira as Expected By CBN after Its Flexible Policy

The apex bank in Nigeria has set sights on an expected outcome of the official value of the naira after the full operationalization of the flexible fiscal policy.

Godwin Emefiele
The Central Bank of Nigeria, CBN is optimistic that the value of the naira in exchange for the United States of America dollar will settle at N250 which is an increment from its pegged official rate, N199.
The information was revealed by the CBN governor, Godwin Emefiele in a letter to the custodian of Nigeria, President Muhammadu Buhari who is currently on a 10-day vacation in the United Kingdom.
The market-driven foreign currency trading which has been termed as a flotation will become operational next week Monday when the market opens. Foreign investors and economists have called for months for a devaluation as chronic foreign currency shortages choked economic growth and deterred investment.

The naira is expected to fall sharply when interbank trading begins on Monday, but the central bank said it did not have a target for the currency and the price would be “purely” market-driven. The naira was trading on the black market at around 370 to the dollar on Thursday.

Giving the first indication of a target, Governor Godwin Emefiele said in a June 3 letter to Buhari – seen by Reuters – that the central bank hopes the naira will eventually trade at around 250 per dollar, a level the president has “approved”.

“I must assure Your Excellency that we are indeed reasonably optimistic that at some point the rate will settle around 250 naira,” Emefiele says in the letter.

The letter, which briefs Buhari on the foreign exchange plan announced on Wednesday, says it could take three to four weeks to clear a $4 billion backlog of foreign exchange demand.

Buhari was initially defiant in his stand against the devaluation of the naira which he regarded as its ‘death’ due to the untold econmic hardship it has subjected Nigerian too in the past through hyper-inflation.

You may also like...

Add a Comment

Your email address will not be published. Required fields are marked *