Developments in the foreign exchange market are putting
the Central Bank of Nigeria under intense pressure to
further devalue the naira. Our currency has been
experiencing free fall since November 25, 2014 when the
CBN Monetary Policy Committee devalued it by eight per
cent from 155 to 168 to the dollar.
Following Saturday’s announcement of the postponement
of the general elections by six weeks, the Naira on Monday
again plunged from 188 to 200 against the dollar.
The Bankers’ Committee gave the hint of further
devaluation on Thursday just as the nation’s External
Reserves dropped by $1bn in 12 days.
The committee which comprises the Central Bank of
Nigeria governor, the deputy governors, chief executive
officers of Deposit Money Banks and other stakeholders,
said the managers of the economy, including the CBN, were
currently seeking a new level to devalue the already
battered Naira.
Members of the committee met for over three hours in
Lagos to review developments in the banking sector and
the economy, among other issues.
The meeting, which was chaired by the CBN Governor,
Godwin Emefiele, later appointed the Managing Director,
Guaranty Trust Bank Plc, Segun Agbaje; Managing
Director, FCMB, Ladi Balogun; Managing Director, CitiBank
Nigeria, Omar Hafeez; and Director, Banking Supervision,
CBN, Tokunbo Martins, to brief the press on some of its
deliberations.
Agbaje said the currency was going through a period of
"price discovery" to determine a new level:
"Where we are now is that oil prices are down. As a
country, we are trying to find what level the currency
devalues to. There is no central bank in the world that
allows a free flow of its currency. What you do is try to find
a price discovery and find a rate at which you can live with.
I think we are going through that process in Nigeria. That
is why at the last MPC meeting, the CBN devalued and also
moved the midpoint of the naira. What you are seeing in
the interbank market is again some price discovery.”
The naira hit a record low of 206.60 against the dollar on
Thursday at the interbank market, and dealers halted
electronic trading for the second consecutive day. CLICK HERE TO READ FULL AND TOUCHING NIGERIAN CELEBRITIES BIOGRAPHY AND SCANDALS
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