Nigerian President Buhari has given his go-ahead to the Central Bank’s proposal for a new flexible Forex policy
President Buhari’s spokesman Garba Shehu has revealed the President’s decision to introduce ‘flexibility in managing’ the naira. He, however, stressed that Buhari is opposed to devaluing the currency.
In a speech marking his first anniversary in office, the President said that he supported a stable currency, but would “keep a close look on how the recent measures affect the naira and the economy”.
Buhari’s statement comes a few days after the central bank’s announcement that it would shift to a more flexible exchange rate policy to stop the country’s economy from sliding into recession. Central Bank of Nigeria (CBN) governor Godwin Emefiele, who made the announcement at the end of the Monetary Policy Committee meeting in Abuja, said that details of the new policy will be released shortly.
Nigeria has held the naira at 197-199 per dollar since March 2015, even as other oil exporters from Russia to Colombia and Malaysia let their currencies drop amid the slump in crude prices since mid-2014.
The Central Bank said, “In Q1 2016, the economy suffered from severe shocks related to energy shortages and price hikes, scarcity of foreign exchange and depressed consumer demand, among others. Consequently economic agents could not undertake new investments or procure needed raw materials. Shortage of foreign exchange arising from low crude oil prices manifested in low replacement levels for raw materials, other inputs as well as new investments.”
The CBN governor also noted that the new policy will not involve the return of the bureau de change operators, as they will continue to source their foreign exchange from the autonomous market.
