With increase in Nigeria’s foreign reserves and stability in the naira exchange rate, Nigeria’s recession will be over by third quarter of 2017.
The Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, made the assertion on Tuesday in Abuja.
Emefiele pointed to some other indicators as evidence of positive development for the revival of the downward trend to include improvements in the parallel market which had exchange rate at N525 per dollar currently going for between N370 and N380.
Emefiele spoke with journalists after a closed door meeting with Senate President, Bukola Saraki, and the leadership of the Senate, on some issues in the forex market interventions and other policies.
He listed other indicators to include reduction in the rate of high inflation as reported by the National Bureau of Statistics, NBS, and the country’s foreign reserve that had risen from over $27 billion at the beginning of the recession in June last year to over $31 billion now.
He maintained : “The CBN has been involved in some form of intensive interventions in the foreign exchange market and this has fortunately resulted in improvements in the purchasing power of the naira as the high trend inflation is heading downwards.
“Appearing before the Senate is an opportunity for me to declare publicly that we are going to continue this intervention because the reserve looks very good.
“As I speak to you, our reserve stands at above $31 billion and that provides us enough firepower or ammunition to be able to defend the currency and we will do so with all intensity to ensure that foreign exchange is procured by everybody.
“We have started to see a downward trend, even in prices of goods and commodities and you must have also observed that inflation is also trending downward as confirmed by NBS.
“We are very much optimistic that by the end of the second quarter or latest third quarter this year, we should be out of recession that we are in right now.”
Emefiele said the downward trend in the parallel market in favour of the Naira would be sustained by the CBN through its needed interventions and in particular, through the policy of willing buyer and willing seller basis.
In his comment, after the meeting, Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Ibrahim Rafiu, said the changes and development in the forex market had helped in finding solutions to the free loss of value of the naira before the CBN’s intervention.
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