Devaluation of the naira will not feature on the agenda of the monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) holding on May 23-24, TheCable can report.
This will come as a surprise to many analysts who were expecting adjustment in the official exchange rate following the decision of the federal government to increase petrol price from N86.50 to N145 per litre in “partial deregulation”.
Official devaluation was thought to be next on the card to create some stability in the forex market and narrow the gap between the CBN and secondary rates.
There are also proposals that the CBN should open a second window — called the autonomous foreign exchange market (AFEM) — to encourage independent forex inflows at a rate closer to market realities.
While the CBN officially fixes the dollar at N197, the interbank sells at N285 and the black market goes for N346.
The federal government had asked oil marketers to resume fuel importation to ease the burden on NNPC and end persistent queues at the filling stations.
As part of the agreement, the marketers were asked to source forex from the secondary market and price imported products accordingly.
This had sent the parallel market into a frenzy, with the naira selling for as high as N360 as currency speculators took position ahead of an expected official devaluation.
“It is not going to happen. There will be no devaluation,” a senior CBN official told TheCable.
“However, with inflation on the rise, expect an increase in the MPR (monetary policy rate).”
The MPR is the rate at which CBN lends to the banks, which then determines the rate the banks lend to their customers.
It was increased from 11% to 12% in March, and there are indications it may go as high as 14% this week, effectively making loans more expensive for businesses as part of efforts to check excessive liquidity in the system.
On the proposed AFEM, the CBN official told TheCable that it was a “good option” but said there are yet no safeguards in place in case the expected forex inflow does not materialise.
“The thinking behind AFEX is that if this window opens, there will be inflow of forex through Diaspora remittances, foreign portfolio investment and export proceeds. The rate will not be determined by the CBN but by the forces operating within AFEX,” he explained.
“However, there are no guarantees that these funds will come in, or if inflows will be significant enough. The foreign investor will be asking himself: if I bring my money into Nigeria through AFEX, if I want to get out, will I be able to get my money back at AFEX?
“They will still look up to the CBN to offer guarantees, so we cannot just jump into the autonomous arrangement for now. There must be safeguards in place.”
https://www.thecable.ng/exclusive-cbn-will-not-devalue-naira-considers-proposals-new-forex-window

hmmm. CBN being creative. AFEM. This is more or else partial devaluation.

Why the self deceit? If they were bold enough to hike PMS, they should please spare us the pretentious retaining of 199 while carrying out back door devaluation through autonomous foreign exchange market (AFEM). We are somehow used to the lies and ajusting to the hard times, bring it on, fear not, personally I can assure you, not only will I survive, I will excel...

PS: I heard Lie Mohammed said the government is broke and will be hoping on taxes. Please also increase the taxes, VAT can be 20%, no qualms!!!

Attahiru Jega, God will judge you

Theses guys are just running the country like Experiments... Infact trial and error

Sai Buhari

Its now seen beyond doubt that we have a set of Government leaders using this economy as a rehearsal ground for economic brouhaha with no clear cut defined economic policies, rather practicing the economics of trial and error!
#toobad

Up FCB

V

Liars

Good news for agarawu23

This administration is a product from a failed experiment.

So after fixing price of PMS, marketers will also fix based on much they expended importing the product? Which way Naija? And by the way, why has NLC not made an official statement yet about calling off the strike? Cos NTA had announced on thursday that is was called of when it wasn't or has anyone seen an official statement anywhere?

We're finished

Clueless Leaders

This their MPR they keep increasing like one magic portion. Things have been worse off since the last increment.... The inflation we have in the country is not due to excess demand liquidity but reduced supply and capital dormancy, trying to mop liquidity is very counterproductive

They have invented a new parallel forex market system to delude themselves amd gullible zombies that they are working. As far as foreign investors and international trade is concerned, the N199 is fiction. Only people up north will get it at that rate. The rest of us will deal with N360

This government and babalawo no difference

It is the hypocrisy that I find irksome, keep the currency at 299 while banks keep profiting from corruption, in case you have not noticed Mr CBN the markets have already adjusted. Shior

Yes!

If buhari can bring dollar down, I will forgive him

I can comfortably say we are doomed in the hands of these APC folks

hmmmmm

Still waiting and watching u guyz for all ur suffering policies.

[size=25pt]

CBN Will NOT Devalue Naira

That is FUTURE HOAXED TENSE[/size]

The economy is really excruciating many!

Buhari and his whole economic team are bastards.

Ok

I dont understand, please what is partial deregulation?

FredN:
Clueless CBN

Provide the clue

Nigerians no get chill at all..
Nothing good comes easy fellow Nigerians,
E go beta....

Adonkia:
I dont understand, please what is partial deregulation?

Its a new term scammers and 419ers use.

Adonkia:
I dont understand, please what is partial deregulation?

They have selected some 4 major oil dealers conoil, oando & forte to be getting PMS from international oil companies shell, total and mobil at an agreed fx rate while the rest of them are on their own

I feel so bad about this government. It's a shame we have Osinbajo, Fashola, supposed intellects while economic policies are next to nothing? If this is Emefiele's and Amosun idea, then they should be sacked with immediate effect. I strongly believe that it's the illiterate president that's pushing against devaluation.

My question:who's currently enjoying N199/$ exchange rate? Naira has already sank it's natural level at about 350-360/$. Everything we buy in the market is bought at this rate, right from petrol to rice and to pencil. Not devaluing naira is fraudulent.

Whoever that's getting dollar at N199 is getting free money from government at the expense of the people. In fact it's both fraudulent and corrupt to keep naira at a rate below what ordinary citizens are getting it.

Shame on all you incompetent government team.

This is what happens when you don't have an independent central bank. Under no conditions should the President be dictating monetary policies to the CBN chief.

This approach of holding the line on an official exchange rate that is unrealistic would eventually lead us down the Venezuelan part.

Postponing devaluation is only going to make things worse. Adeosun and her team should know this, - if they ever attended any classes back in those days.

Holding on to an unrealistic exchange rate is like selling 20 dollars for 1 dollar. It is totally stupid, it simply won't work.

Emefiele and Adeosun should have listened to the likes of Soludo and Sanusi long ago and they should have done what is RIGHT as opposed to what is convenient.

Above all, we should not loose hope, things will get better, someday soon. There is always light at the end of the tunnel.

#happyMonday
#blessedWeekAhead