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Nairaland Forum / Nairaland / General / Business / Why we won’t devalue naira – CBN (13386 Views)
We Can’t Float Naira, Cbn Tells Imf / Recession: EU Advises Nigeria To Devalue Naira. / If We Devalue Naira Again, We Will Kill Nigerians, Says CBN Governor (2) (3) (4)
Why we won’t devalue naira – CBN by msmon(m): 9:03pm On Jul 03, 2015 |
The Central Bank of Nigeria, CBN, has disclosed that its decision not to further devalue the naira was borne out of the need to safeguard the Nigerian economy from the shocks and negative impact the depreciation will have on the economy. The apex bank in a statement signed by its Director, Corporate Communications, Mr. Ibrahim Mu’azu, maintained that the CBN does not panic and will not take desperate measures to satisfy few misguided interests in the market. According to Mu’azu, who was reacting to an article in the Economist Magazine, he said the article seemed to ignore the fact that the exchange rate is simply a price that is essentially determined by the forces of supply and demand, adding that the CBN believes that the 48 per cent decline in oil prices may not be transitory and made bold policy changes including closure of the subsidized Official Foreign Exchange (Forex) Window, which resulted in a 22 per cent depreciation in the currency, the Naira. “Because the Nigerian economy is heavily dependent on imports and the exchange rate pass- through to inflation is high, we believe that this adjustment is optimal at this time. “Contrary to the article’s argument, adjustments to a sharp decline in supply of US Dollars cannot all be borne by an indeterminate depreciation, without considering the full impact on the Nigerian economy. “The demand side also has to be considered, not just in response to the pressure on the Naira but as an opportunity to change the economy’s structure, resuscitate local manufacturing, and expand job creation for our citizens. “Take rice imports, for example: why should we keep allocating scarce forex to rice importers when vast amounts of paddy rice of comparable quality produced by poor hardworking local farmers across the rice belts of Nigeria are wasted, and farmers are falling deeper into poverty while we export their jobs and income to rice producing countries? “Few decades ago, Nigeria was one of the world’s largest producers of palm oil but today we import nearly 600,000 Metric Tonnes while Indonesia and Malaysia combine to export over 90 percent of global demand”, he stated. Muazu, however, noted that under the present circumstances, the CBN will do the little it can, through the introduction of huge subsidies, to protect the jobs and incomes of local farmers, using some of the same principles western economies used to justify the protection of their farmers. He further stated that Nigeria cannot attain its full potentials by importing anything and everything, adding that for a long while now, the quest for importation has significantly weakened the operating capacities of industries in the country. Muazu added that like other oil-exporting countries, Nigeria is grappling with its share of the aftermath of the oil price decline, noting that despite the challenges, Nigeria’s economic fundamentals remain strong. According to him, inflation is still within the CBN’s single-digit band, the exchange rate has stabilized around N197 per US Dollar for the last five months, GDP expanded by four per cent in the first quarter of 2015, and 469,070 new jobs were created in the same quarter. He said, “But now is a good opportunity to begin a reversal. Although the article hastily derides this idea as lacking in economic foundations, it is the same principles upon which many other countries do not allow importation of certain products. “More also, if the article believes the CBN should adjust to reflect the current parallel market rate, why was this suggestion not made in the week following the inauguration of President Buhari when the same rate fell sharply to under N190 per Dollar? “Furthermore, it appears condescending to suggest that the list of items seemed ‘to have been drawn up by someone wandering around a house and a building site’. On the contrary, items were only included after thorough and exhaustive discussions at the highest policymaking body of the Bank, with the strategic national interest of Nigeria”. “With ingenuity and productiveness, we believe that Nigerians will seize this opportunity and use it for the greater good of the country. As we transition into a new administration in Nigeria, we must continue to ensure policy stability at all times”, he concluded. http://dailypost.ng/2015/07/04/why-we-wont-devalue-naira-cbn/ 3 Likes 2 Shares
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Re: Why we won’t devalue naira – CBN by Goovo(m): 9:04pm On Jul 03, 2015 |
Ok |
Re: Why we won’t devalue naira – CBN by Nobody: 9:04pm On Jul 03, 2015 |
VERY LOGICAL... I HOPE IT GETS BETTER 6 Likes |
Re: Why we won’t devalue naira – CBN by vizboy(m): 9:05am On Jul 04, 2015 |
Re: Why we won’t devalue naira – CBN by Nobody: 9:33am On Jul 04, 2015 |
msmon:Checked... next Please... |
Re: Why we won’t devalue naira – CBN by stevecantrell: 10:02am On Jul 04, 2015 |
CBN is making a U-turn..bankers can eat their heart out. 1 Like |
Re: Why we won’t devalue naira – CBN by ubaobi: 10:06am On Jul 04, 2015 |
Who is d minister of finance?.. I won't forget how one DULLARD**HO promised to make #1 equal to $1 and to stabilize oil price. we are patiently waiting 3 Likes |
Re: Why we won’t devalue naira – CBN by KENZYYONG(m): 10:06am On Jul 04, 2015 |
wen will ever be the first to comment |
Re: Why we won’t devalue naira – CBN by Nobody: 10:06am On Jul 04, 2015 |
Re: Why we won’t devalue naira – CBN by Christianwalase: 10:06am On Jul 04, 2015 |
Ok na |
Re: Why we won’t devalue naira – CBN by RichDad1(m): 10:07am On Jul 04, 2015 |
The CBN governor is as Clueless as the Person that appoints him. Your days are numbered. 5 Likes 1 Share |
Re: Why we won’t devalue naira – CBN by Segadem(m): 10:07am On Jul 04, 2015 |
this man again? |
Re: Why we won’t devalue naira – CBN by Segadem(m): 10:07am On Jul 04, 2015 |
RichDad1: |
Re: Why we won’t devalue naira – CBN by Segadem(m): 10:08am On Jul 04, 2015 |
KENZYYONG: |
Re: Why we won’t devalue naira – CBN by blym4real: 10:10am On Jul 04, 2015 |
Hmm. Are the cbn staffs patronizing the locally made rice? Especially the cbn governor. 5 Likes |
Re: Why we won’t devalue naira – CBN by bornmekus: 10:11am On Jul 04, 2015 |
Ok,We are waiting for the outcome. |
Re: Why we won’t devalue naira – CBN by UnknownT: 10:11am On Jul 04, 2015 |
We need to hear from Nairaland's Chief Economist Prof. Ms Ngeneukwenu. Please come and throw more light on the issue 9 Likes |
Re: Why we won’t devalue naira – CBN by SexyFox(f): 10:13am On Jul 04, 2015 |
I love Jesus. 2 Likes |
Re: Why we won’t devalue naira – CBN by Masculity(m): 10:17am On Jul 04, 2015 |
On a sheet of paper Nigeria is highly develop country but when it comes to reality...ask ordinary person along the street. |
Re: Why we won’t devalue naira – CBN by Dannyset(m): 10:17am On Jul 04, 2015 |
If it would enable them steal and loot money they would do it. |
Re: Why we won’t devalue naira – CBN by rickRamozay(m): 10:18am On Jul 04, 2015 |
issorait fp tinzzzzz |
Re: Why we won’t devalue naira – CBN by rickRamozay(m): 10:19am On Jul 04, 2015 |
issorait fp tinzzzzz |
Re: Why we won’t devalue naira – CBN by Buchukwu: 10:20am On Jul 04, 2015 |
You can't devalue what's already devalued. Bunch of mad people. |
Re: Why we won’t devalue naira – CBN by YourCoffin: 10:20am On Jul 04, 2015 |
These people should learn how to communicate in layman's terms. Even as educated as I seem to be, I'm grappling with this article. A kind hearted economists should please break it down for us. Thanks. |
Re: Why we won’t devalue naira – CBN by juman(m): 10:33am On Jul 04, 2015 |
CBN effort to enliven local productions and reduce importation is commendable. Hope it is not just normal nigeria talk talk thing. But on currency devaluation, CBN can be living in false paradise like during abacha time when official rate was 22 naira to one dollar while it was almost 80 naira per dollar at the outside market. That enhance a lot of corruption where those that had access to get the dollars at government rate of 22 naira per dollar were selling those dollars outside at 80 naira per dollar. Hope the CBN quest for 'eonomic stability', the external reserve would not wiped out. 1 Like |
Re: Why we won’t devalue naira – CBN by ProfessorPP(m): 10:37am On Jul 04, 2015 |
ONE DAY NIGERIA, WILL BE THE WOLD U.S.A. |
Re: Why we won’t devalue naira – CBN by benjaminiyke(m): 10:48am On Jul 04, 2015 |
YourCoffin:hahahaha. I totally agree with you,I also found it difficult to grasp the message in this article,we have some really educated personnel in this country with great potential....if only we can stamp out corruption from this country we can become one of the leading countries in the world. We have so much potential here. |
Re: Why we won’t devalue naira – CBN by msmon(m): 10:50am On Jul 04, 2015 |
themosthigh: Submit to Shaytan so that he pilot your affair and lead you to you final about (?) |
Re: Why we won’t devalue naira – CBN by ESUNAM(m): 10:54am On Jul 04, 2015 |
God is not fail Nigeria, is Nigeria that fails God 2 Likes |
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