The Central Bank of Nigeria (CBN) said the bank’s resistance to float the Naira in the face of the economic challenges that befell the nation saved the currency from depreciating significantly.
Speaking at the Capital Chapter Congress/Dinner of the Nigerian Institute of Public Relations (NIPR), FCT chapter, on Wednesday in Abuja, Acting Director, Corporate Communications, Central Bank of Nigeria (CBN), Isaac Okoroafor, said the currency would have fallen to N3000/USD if it had succumbed to pressures on it to float the currency.
A floating exchange rate is a regime where the currency price is set by the forex market based on supply and demand compared with other currencies.
Okoroafor noted that the bank was pressured both locally and internationally, but it resisted because it was convinced that floating the currency would adversely affect the economy.
“We believed that floating the currency would have destroyed our economy, because from our own calculations, if we had floated the naira when it was N525, the next thing would have been N700, N1,200, maybe N3,000 and it goes; it would go to haywire.
“We resisted the option because we felt it was a wrong option and dangerous to the economy and we are very happy we proved them wrong,” he said.
The apex bank have continued to inject enough forex into the foreign exchange market in a bid to boost its liquidity level and stabilise the currency.
To achieve this, the bank mandated all Bureau de Change operators to purchase Dollars at least three times in a week to avoid their licenses being reviewed.
It also directed all Deposit Money Banks to buy and sell foreign currency to travelers (both customers and non-customers) upon presentation of relevant valid travel documents such as visa and tickets over the counter.
These efforts have begun to yield good results as the currency appreciated against the Dollar at the parallel market yesterday to N363 per Dollar from N366 per Dollar it traded on Monday and Tuesday
The CBN spokesman assured that the value of the currency would increase and it would fall below N360 as the economy continues to improve.
By Oluwasegun Olakoyenikan…
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