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Naira not as weak, unstable as speculated at parallel market, Emefiele insists

The Governor of the Central Bank of Nigeria (CBN), Dr. Godwin Emefiele has revealed that contrary to the permutations of currency speculators at the parallel market, the Nigerian naira is never as weak as they place it, rather the only logical explanation to the high rates in that market therefore is that a lot of illegal and criminal activities are being carried out there.

In his remarks while receiving Vanguard Newspaper Personality of the Year Award held in Lagos, he said “Even a simple Purchasing Power Parity analysis will concur that the Naira is not as weak as the rate in the parallel market is suggesting. Even if one were to allow for risk pricing and other uncertainties, it does appear that there is no basis in our economic fundamentals to support the prevailing exchange rate at the parallel market’.

“Given this scenario, the CBN cannot sit idly bye and allow such faceless and criminally minded people to destroy the currency under the guise of a free float as is being canvassed by some so called experts.”

On the forex ban imposed on some 41 items, Emefiele said “Let me also take this opportunity to speak on the Bank’s policy on the so-called 41 items. As I have hinted in previous paragraphs, this policy was basically borne out of necessity to conserve foreign exchange. I know that no policy is cast in stone and hence, we may have no need for it someday in this country. But, policymakers across this country need to pay attention to global trends and ensure that they reflect upon our strategy and thinking.

Defending the idea more, CBN governor insisted that “this policy has been used to achieve significant sufficiency in cement, a product whose importation could have been costing us over US$3.2 billion in FX Reserves annually”.

“In effect, therefore, this policy needs to be supported not just in response to the pressure on the Naira but as an opportunity to change the economy’s structure, resuscitate local manufacturing, and expand job creation for our citizens,” CBN Governor noted.

It would be recalled that the backward integration policy of the federal government during the former President Goodluck Jonathan administration paved way for the massive indigenous investments in cement which resulted in the meeting of local demand and exportation even though the price is still out of reach of many Nigerians.