The Central Bank of Nigeria is set to introduce a flexible foreign exchange rate policy that will allow the bank retain a small portion of foreign exchange for critical transactions.
Addressing journalists on Tuesday at the end of the Monetary Policy Committee meeting in Abuja, the Central Bank Governor, Mr Godwin Emefiele, said that the details of the new policy would be released in coming days.
He said that the policy would guarantee improved access to foreign exchange for business to boost the economy.
Mr Emefiele reassured Nigerians that the apex bank remained committed to the attaining price stability in Nigeria.
The committee has, however, left interest rate unchanged at 12 per cent.
Withdrawal Of Foreign Exchange Allocation
The Central Bank Of Nigeria (CBN) had in June 2015 withdrew Foreign Exchange Allocation for importers of some goods into Nigeria.
The CBN Governor said importers of such goods which fall into 41 categories were expected to source for their foreign exchange privately.
In March, President Muhammadu Buhari rejected calls by the International Monetary Fund (IMF) to lift the foreign exchange ban and allow a more flexible rate for the Naira.
In an interview on a Pan-Arab Television, President Buhari said hard currency curbs were necessary, as Nigeria could no longer afford to import as much as it did in the past due to the falling oil revenues.
The IMF had in February called on Nigeria to lift the restrictions imposed by the Central Bank and let the Naira reflect “market forces” more closely, as the restrictions had significantly affected the private sector.
While the official exchange rate of the Naira to a dollar remained at 197 Naira, the parallel market floats between 285 to 347 Naira to a dollar.
Foreign Exchange Manipulation
Some economists have called for the devaluation of the Naira to reflect the realities of the foreign exchange market but the government has rejected that call, with President Buhari saying he is still not convinced that the vast majority of ordinary Nigerians will derive any tangible benefit from a devaluation of the Naira.
The government had also in March claimed that ‘certain elements’ within some of the nation’s national institutions were using their accomplices to manipulate the foreign exchange market.
Reading a riot act to financial regulators the Attorney General of the Federation and Minister of Justice, Mr Abubakar Malami, said the individuals rather than exert their regulatory powers have chosen to manipulate the market to the detriment of the national economy.