By using this site, you agree to the Privacy Policy and Terms & Conditions.
Accept
Okay.ngOkay.ng
  • News
    • Politics
    NewsShow More
    FG, Niger Republic sign MOU on Kano-Maradi road
    January 27, 2023
    JAMB Registrar, Is-haq Oloyede
    JAMB registrar, Oloyede denies operating any social media account
    January 27, 2023
    Ademola Adeleke
    Adeleke Rejects Osun Governorship Election Tribunal Verdict, Plans Appeal
    January 27, 2023
    Oyetola and Adeleke
    Osun Governorship Election: Tribunal Annuls PDP’s Adeleke’s Victory, APC’s Oyetola Declared Winner
    January 27, 2023
    House of Representative
    Student voter participation: Reps calls for suspension of tertiary institution’s academic activities
    January 27, 2023
  • Entertainment
    EntertainmentShow More
    Ex-boxer Mike Tyson slapped with a fresh rape suit
    January 25, 2023
    Anita
    Paul Okoye’s Ex-Wife Anita Opens Up About Her Struggles with Miscarriage
    January 19, 2023
    Martica "Fat" Nwigwe, Grammy awards 2023 best new artist award nominee Tobe Nwigwe, Brand Manager, Heineken, Azuka Ijenebe, Grammy awards best global music performance award nominee Rocky Dawuni; Founder of Afrozons, Dr. Sheila O; Senior Media, Brand PR & Sponsorships Manager, Nigerian Breweries Plc, Sandra Amachree; Portfolio Manager, International Premium Brands, Nigerian Breweries Plc; Sampson Oloche; at the Afrozons pre-Grammy nomination celebration courtesy of Heineken.
    Sheila O Brings Together African Artists Tobe Nwigwe and Rocky Dawuni to Discuss Grammy Nominations
    January 19, 2023
    ‘Davido and I going on tour’ – Wizkid
    January 18, 2023
    Nigerian skitmaker, Kamal Aboki dies in auto accident
    January 17, 2023
  • Business & Economy
    Business & EconomyShow More
    Godwin Emefiele
    CBN Introduces Domestic Card to Combat Foreign Exchange Challenges
    January 26, 2023
    Godwin Emefiele
    CBN stands firm on January 31st deadline, says no extension for deposit of old naira notes
    January 24, 2023
    CBN Governor, Godwin Emefiele
    Central Bank of Nigeria Raises Monetary Policy Rate to 17.5% to Combat Inflation
    January 24, 2023
    Mr. Muhammad Nami, Executive Chairman, Federal Inland Revenue Service (FIRS) addressing members of the press at the FIRS HQ, Abuja. January 23, 2023
    Muhammad Nami-led FIRS breaks record with N10.1 trillion tax collection in 2022
    January 24, 2023
    First Oil Well Spud-In in Nasarawa to Commence in March 2023 – Kyari
    January 13, 2023
  • Sport
    SportShow More
    Kolo Toure
    Kolo Toure sacked by Wigan Athletic after winless reign
    January 27, 2023
    Ex-Madrid star, Gareth Bale to make professional golf debut
    January 24, 2023
    Just in: Everton sack Manager, Frank Lampard
    January 23, 2023
    Eddie Nketiah (L) and Bukayo Saka (R) of Arsenal celebrate Nketiah's game-winning goal during the Premier League match against Manchester United at the Emirates Stadium on January 22, 2023. (Photo by Glyn KIRK / AFP)
    Arsenal Secures Hard-Fought 3-2 Victory Over Manchester United
    January 22, 2023
    Chelsea draw Liverpool at Anfield
    January 21, 2023
  • Tech
    TechShow More
    Kashifu Inuwa
    Forbes Recognizes NITDA’s Kashifu Inuwa with Best of Africa Corporate Governance Award
    January 16, 2023
    NCC
    NCC Returns to Television with Telecom Weekly Program
    January 10, 2023
    MTN Nigeria Launches Thryve Ads to Support SMEs in Social Media Marketing
    January 6, 2023
    WhatsApp
    WhatsApp to End Support for Dozens of Devices on Dec 31st, 2022 – See List
    December 29, 2022
    The Redmi K60 Pro: Xiaomi’s Latest 5G Smartphone with a High-Refresh-Rate Display and HDR10+ Support
    December 29, 2022
Reading: IMF Speaks About The Naira Devaluation By CBN
Share
Aa
Okay.ngOkay.ng
Aa
  • News
  • Entertainment
  • Business & Economy
  • Sport
  • Tech
Search
  • News
    • Politics
  • Entertainment
  • Business & Economy
  • Sport
  • Tech
Follow US
  • About Okay.ng
  • Advertising on Okay.ng
  • Contact Okay.ng
  • Okay.ng on WhatsApp
  • Careers
  • Submit News to Okay.ng
© OKN MEDIA PUBLISHING 2022 - All rights reserved
Business

IMF Speaks About The Naira Devaluation By CBN

Farouk Mohammed By Farouk Mohammed Published November 27, 2014
Share
7 Min Read
SHARE

aZrquNCQYA7UhfpXhuTe92nX-300x210

Barely 48 hours after the Central Bank of Nigeria, CBN, devalued the national currency, the Naira, the International Monetary Fund, IMF, has said that it is the right move in the right direction.

It would be recalled that the CBN Governor, Mr. Godwin Emefiele, while briefing the press on the outcome of the 98th meeting of the Monetary Policy Committee, in Abuja on Tuesday, had said that the combination of low accruals into the nation’s foreign reserves, owing to falling oil prices at the international market; continual depletion of the reserves; and high demand at the foreign exchange market made it difficult for the apex bank to continue to defend the Naira.

The apex bank boss added that the decision to devalue the currency is to improve fiscal health amid a steep fall in the prices of crude oil, the main export commodity of Africa’s largest economy.

- Advertisement -

Justifying the decision to devalue the Naira, Emefiele disclosed that the nation’s foreign reserves lost more than $3 billion in one and a half months to efforts to defend the Naira.

Reacting to the devaluation of the Naira on Wednesday, through a press statement, the IMF said: “We are supportive of and welcome these actions, which we view as complementary and moving in the right direction.

“Of course, the global situation remains fluid and the key issue is being ready to manage downside risks and for the authorities to be prepared, based on assessments of credible scenarios, to consider additional measures, as necessary.”

Meanwhile, opposition parties in Nigeria have criticised the federal government over its decision to devalue the Naira, saying raw materials and industrial products will become costlier as Nigeria is heavily dependent on imports.

Nigeria has been badly hit by a sharp fall in revenues with Opec crude falling below $78/barrel, the country’s 2013 budget benchmark.

The country’s finance minister has now cut the 2015 oil benchmark price from $77.5 to $73/barrel in order to ensure better fiscal health.

The CBN has moved the USD/NGN target band to 160-176 from 150-160. The bank also raised the benchmark interest rate to 13% from 12%, in order to curb inflationary pressures stemming from a weaker local currency.

Central bank governor Godwin Emefiele said the current downturn in oil prices is not transitory but appears to be permanent.

The USD/NGN traded at a new record high of 178.25 on Wednesday before easing to 176. However, the dollar has been showing some weakness for the past few days which might help the Naira to some extent. After a set of data release on Wednesday, the USD index has fallen to a five-day low of 87.53.

Explaining the basis of the decisions of the Monetary Policy Committee to devalue the Naira and raise lending rate, the CBN boss said: “A major issue considered by the Committee, however, was the declining level of external reserves, which arose from demand and supply constraints. On the supply side, the falling oil price has considerably reduced the accretion to external reserves thus constraining the ability of the Bank to continually defend the naira and sustain the stability of the naira exchange rate.

“The supply side is further weakened by the commencement of normalisation of monetary policy by the US Federal Reserve following the termination of the third quantitative easing on 29th October, 2014; a development which has accentuated capital outflows. These developments are against the backdrop of considerable loss of fiscal space following our inability to build sufficient reserves during the boom days.

“On the demand side, the pressures in the foreign exchange market were aided mostly by the excess liquidity conditions in the banking system and speculative activities. It has become increasingly worrisome that improvement in liquidity conditions in the banking system, designed to enhance the resilience and stability of the banking system, has not translated to increased credit expansion to the real sector to engender inclusive growth and boost employment. Rather, it has led to an upward pressure in the foreign exchange market and Standing Deposit Facility window of the Bank while banks continually exercise a cautious approach to lending.

“Against this background, the Committee is of the view that the current challenge requires bold policy moves on both the demand and supply sides of the foreign exchange market. Consequently, bold policy and administrative measures in the management of the nation’s stock of foreign exchange reserves have become inevitable in order to align the market towards its long-run equilibrium path.

“On this note, the Committee wishes to reiterate that the Bank remains committed to a stable exchange rate within the limits of available resources and would continue to maintain sufficiently strong level of external reserves to meet its short term obligations and other regular balance of payments commitments. Without prejudice to this commitment, our foreign exchange management framework would have zero tolerance for infractions and would penalize economic agents whose primary objective is to speculate in the Nigerian market.”

The Naira has been taking sharp dive downwards lately with the parallel market exchange rate rising to N180 per dollar from N177.3 on Monday.

The situation was said to have been triggered by the restrictions introduced by the CBN to curb foreign exchange demand at the official market.

Share this Article
Facebook Twitter Whatsapp Whatsapp Telegram Email Copy Link Print
What do you think?
Happy0
Love0
Sad0
Angry0
Joy0
Surprise0

Connect with Okay on Social

Facebook Like
Twitter Follow
Instagram Follow
Telegram Follow
- Advertisement -
Ad imageAd image
- Advertisement -
Ad imageAd image
- Advertisement -
Ad imageAd image

Recent Posts

FG, Niger Republic sign MOU on Kano-Maradi road
News
JAMB Registrar, Is-haq Oloyede
JAMB registrar, Oloyede denies operating any social media account
News
Ademola Adeleke
Adeleke Rejects Osun Governorship Election Tribunal Verdict, Plans Appeal
News Politics
Oyetola and Adeleke
Osun Governorship Election: Tribunal Annuls PDP’s Adeleke’s Victory, APC’s Oyetola Declared Winner
News
Dupe Olusola
Dupe Olusola: The Revolutionary Transcorp Hotels CEO Transforming the Hospitality Industry in Africa
Featured Top stories
- Advertisement -

You Might Also Like

Godwin Emefiele
Business

CBN Introduces Domestic Card to Combat Foreign Exchange Challenges

January 26, 2023
Godwin Emefiele
BusinessNews

CBN stands firm on January 31st deadline, says no extension for deposit of old naira notes

January 24, 2023
CBN Governor, Godwin Emefiele
BusinessNews

Central Bank of Nigeria Raises Monetary Policy Rate to 17.5% to Combat Inflation

January 24, 2023
Mr. Muhammad Nami, Executive Chairman, Federal Inland Revenue Service (FIRS) addressing members of the press at the FIRS HQ, Abuja. January 23, 2023
BusinessNews

Muhammad Nami-led FIRS breaks record with N10.1 trillion tax collection in 2022

January 24, 2023
Previous Next
Okay.ngOkay.ng
Follow US

© OKN MEDIA PUBLISHING 2022 - All rights reserved

  • About Okay.ng
  • Advertising on Okay.ng
  • Contact Okay.ng
  • Okay.ng on WhatsApp
  • Careers
  • Submit News to Okay.ng
Welcome Back!

Sign in to your account

Lost your password?