The Central Bank of Nigeria (CBN) has warned against speculative
trading on the naira in view of the gap between the official and
parallel markets.
The apex bank also vowed to defend the country’s external reserves and exchange rate vigorously in view of the persistent falling oil prices.
Rising from the Monetary Policy Committee (MPC) meeting yesterday, the CBN also announced that it would be retaining its monetary policy at 13 per cent and the MPC also elected to retain the cash reserve ratio (CRR) on private sector deposits at 20 per cent, CRR on public sector deposits at 75 per cent and liquidity ratio at 30 per cent.
The CBN governor, Godwin Emefiele, who briefed the media at the end of the two-day meeting in Abuja, yesterday, gave assurance that the apex bank will continue to make foreign currency available for people who need it for legitimate purposes.
“We will not tolerate speculative attack on the currency. What is paramount on our mind is that our external reserve and exchange rate policy must be defended. We will ensure that as economic activities continue to take place, anybody who needs foreign currency to transact business in the country will have access to it as long as it is for legitimate purposes.
“The committee observed that its decisions of November 2014 needed some time for the effects to crystallise in the economy and therefore voted to retain the current position,” Emefiele stated.
He further stated that the committee noted the growth performance of the economy as well as the year-end inflation outcome with satisfaction.
“It (the MPC) was, however, concerned about a number of risks, including security challenges in parts of the country which has continued to disrupt farming-related activities, and the sustained decline in oil gross domestic product. With regards to inflation, the committee noted the recurring challenge of excess liquidity in the banking system and the possible complications arising from capital flow reversals as well as the demand pressure in the foreign exchange market,” Emefiele said.
He also indicated that, on the external front, falling oil prices and slowing global output recovery remained significant risks.
“The gradual normalisation of the monetary policy by the US Fed could exacerbate the current retrenchment of portfolios flows and increase pressure on currencies in emerging and developing countries, including Nigeria,” he said.
On the widening gap between the official exchange rate and that of the parallel market, the governor said, “We are aware of the gap. We are doing our best to bridge the gap by intervening in the market because we know that allowing it can create opportunity for certain people.
The apex bank also vowed to defend the country’s external reserves and exchange rate vigorously in view of the persistent falling oil prices.
Rising from the Monetary Policy Committee (MPC) meeting yesterday, the CBN also announced that it would be retaining its monetary policy at 13 per cent and the MPC also elected to retain the cash reserve ratio (CRR) on private sector deposits at 20 per cent, CRR on public sector deposits at 75 per cent and liquidity ratio at 30 per cent.
The CBN governor, Godwin Emefiele, who briefed the media at the end of the two-day meeting in Abuja, yesterday, gave assurance that the apex bank will continue to make foreign currency available for people who need it for legitimate purposes.
“We will not tolerate speculative attack on the currency. What is paramount on our mind is that our external reserve and exchange rate policy must be defended. We will ensure that as economic activities continue to take place, anybody who needs foreign currency to transact business in the country will have access to it as long as it is for legitimate purposes.
“The committee observed that its decisions of November 2014 needed some time for the effects to crystallise in the economy and therefore voted to retain the current position,” Emefiele stated.
He further stated that the committee noted the growth performance of the economy as well as the year-end inflation outcome with satisfaction.
“It (the MPC) was, however, concerned about a number of risks, including security challenges in parts of the country which has continued to disrupt farming-related activities, and the sustained decline in oil gross domestic product. With regards to inflation, the committee noted the recurring challenge of excess liquidity in the banking system and the possible complications arising from capital flow reversals as well as the demand pressure in the foreign exchange market,” Emefiele said.
He also indicated that, on the external front, falling oil prices and slowing global output recovery remained significant risks.
“The gradual normalisation of the monetary policy by the US Fed could exacerbate the current retrenchment of portfolios flows and increase pressure on currencies in emerging and developing countries, including Nigeria,” he said.
On the widening gap between the official exchange rate and that of the parallel market, the governor said, “We are aware of the gap. We are doing our best to bridge the gap by intervening in the market because we know that allowing it can create opportunity for certain people.
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