Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said its intervention on the value of the Naira is to bring about a convergence of all the rates.
There have been many critics of CBN’s ability to sustain its intervention, but Emefiele insists they have the capacity to stop the Naira from falling out of control
Speaking to reporters after the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, he warned speculators that “they are taking a risk and they will lose in this bid to want to place the wrong bet on the direction we are going.
“The direction is that there is determination to see the convergence of those rates and with what we have seen so far we are very optimistic that those rates will converge and all the elements in the foreign exchange market will no doubt be implemented.”
Emefiele noted that “in terms of sustainability, reserves at this time are still trending upwards, almost close to $31 billion as I speak with you, and the fact that we have done this consistently for four to five weeks should convince everybody who doubts the strength of CBN to sustain this policy.
“It is a programme that is on course. We are happy that it is looking good beyond our expectations and those who still remain on the sidelines, doubting the CBN’s ability to sustain this policy, they are on the wrong side of the bet.”
On why the CBN initiated the intervention, Emefiele explained that the apex bank made a presentation on the Nigerian economy and FX to the National Economic Council (NEC), which thereafter advised that “we look into all the issues discussed.
“Before then, we had started to see the rising trend in the FX, particularly in the parallel market and we had taken a decision that there was a need to reverse the trend that is the reason we specifically started the FX intervention and I am happy it is indeed very gratifying that those interventions have proved positive, we’ve seen rates converging; we are strongly optimistic that the rates will converge.”
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