The Central Bank of Nigeria says the modalities for the planned flexible exchange rate policy is being worked out and will be released in due course.
The Acting Director, Corporate Communications, CBN, Mr. Isaac Okoroafor, said the Monetary Policy Committee’s decision to adopt a flexible forex policy was made in the interest of the country, adding that the proposed policy would help to stabilise the economy.
He spoke in Lagos at a one-day interactive session between the CBN and industry stakeholders including the organised labour.
Okoroafor said, “The modalities have not been released. The CBN governor has explained that we have to find a way of creating some flexibility around the foreign exchange management as it is today and details will be released in due course.”
He said the CBN would continue to take decisions aimed mitigating sharp practices in the forex market.
According to him, the regulator has also taken extra measures to prevent Nigerian banks from failing despite the recent increase in non-performing loans.
To grow the economy, Okoroafor said the CBN had injected intervention funds into the critical sectors of the economy.
These, according to him, include aviation, power and agriculture.
He said, “The economy of the nation cannot grow until and unless the people are giving the opportunity to work and produce. This has informed all the policies we have taken in the last two years. We have intervened in several sectors: agriculture, real sector.”
A member of the National Executive Council, Nigeria Labour Congress, Mr. Isa Aremu, said the clamoured devaluation of the naira have grave consequence on Nigerian workers and the economy if implemented.
As such, he said that workers were pleased that the CBN resisted the pressure to devalue the currency of an import-dependent nation like Nigeria.
He, however, said there was the need for the CBN to come up with framework for the proposed flexible exchange rate policy as soon as possible.
Aremu said, “For a country that is import-dependent like Nigeria, devaluation will lead to high cost of production. But again, we need clarification as to what the flexible exchange rate means for us. The CBN has said the modalities are being worked out. The bottom-line is that it will not do prejudice to the value of naira.
“Nigeria cannot run a successful private sector with the high cost of interest rate charged by banks. The good job the CBN is doing would be undermined if the interest rate is not properly managed.”
While commending the Federal Government for its intervention on labour matters, Aremu asked the CBN to review its monetary policy rate to enable small businesses to have access to development funds.