In view of the lingering foreign exchange scarcity in the country, the Central Bank of Nigeria has urged Nigerians not to panic, saying there is enough forex for business owners, travellers and parents with students abroad to meet their obligations.
CBN Governor, Godwin Emefiele, stated this on Tuesday at the 278th Monetary Policy Committee press briefing in Abuja.
He also said at least $80m were disbursed to banks on a weekly basis to enable Nigerians meet their forex responsibilities.
He, therefore, charged Nigerians to report any bank withholding forex to a special call centre of the apex bank.
Emefiele said, “Part of the measures that we have adopted is that on a weekly basis, the CBN disburses not less than $80m to the banks either for Personal Travel Allowances or payment of school fees.
“We have created a complaint desk where you can call us or call some of our people who will respond. It is like call centres, where people can call that they went to a particular bank and they didn’t get money to pay school fees or they didn’t get money to travel.”
Emefiele also said Nigeria had not changed from its foreign exchange management policies.
He said, “Nigeria has not changed from its foreign exchange management policies. Nigeria still remains on a managed float.
What does a managed float regime mean? That the Central Bank, which has a core mandate for foreign exchange management in the country, will run the market, see to how the market operates depending on its readings.
“It might interest us to know that since January, the CBN has not intervened in the I&E window. The market has always operated within a band of around N409 and at some point it attained N412, N413 and it began to move and that is the way it is supposed to go.
Emefiele also said the statement credited to the minister of finance that the country had moved into a flexible exchange rate was not true.
CBN retains lending rate
The governor also disclosed that the MPC retained the Monetary Policy Rate at 11.5 per cent.
It also retained the Cash Reserve Ratio and Liquidity Ratio at 27.5 per cent and 30 per cent respectively.
The governor, while presenting the committee’s report, said loosening would create excess liquidity, which would intensify demand pressure on the foreign exchange market.
He said, “In summary, the MPC voted to retain the MPR at 11.5 per cent; retain the asymmetric corridor of +100/-700 basis points around the MPR; retain the CRR at 27.5 per cent; and retain the liquidity Ratio at 30 per cent.”
He said the MPC felt that loosening would create excess liquidity, which would intensify demand pressure on the foreign exchange market, thereby leading to further depreciation in the currency.
On agricultural interventions, Emefiele said, “The rising insecurity in some food producing areas, is limiting the expected outcomes in terms of supply to the market, thus contributing to the rise in food prices.
He added, “The MPC reiterated its concerns on the activities of persons and groups causing security challenges in the food producing areas of the country, as this has contributed to the major uptick in food prices across the country.
Commenting on the MPC’s outcome, the Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf, requested that the MPC should give more attention in its deliberations to the foreign exchange policy because of its profound implications for economic performance and the confidence of investors.
He said, “The forex policies are as important as liquidity management concerns. Foreign exchange framework is key to the price stability mandate of the CBN.
“The chamber notes with concern the divergent positions of both the fiscal and monetary authorities on the country’s foreign exchange policy framework.
“It is important for the fiscal authorities, CBN and Economic Advisory Council to be on the same page as far as the country’s foreign exchange policy framework is concerned.”
A Professor of capital market at Nasarawa State University, Prof. Uche Uwalaka, said the MPC decision to hold rates was largely predictable.