No Plan to Unify Exchange Rate – CBN
The Central Bank of Nigeria (CBN) has denied that its recent forex liberalisation policy was aimed at unifying the exchange rate.
Fielding questions from journalists after the two-day Monetary Policy Committee (MPC) meeting on Tuesday, the acting CBN governor, Fola Shonubi, said the policy was meant to infuse efficiency in the forex market.
He gave assurance that with moderation by CBN, there will be light at the end of the tunnel with respect to country’s forex exchange policy.
“We are not trying to unify any rates. We believe that we need to encourage the market to be more efficient and more effective and that takes a bit of time. Some of the volatility you have seen over the period has been driven by that same fact that the market needs to find its level; and also the reality that there’s pent-up demand which current supply will not be sufficient for . As we ease and satisfy the pent-up demand we will begin to see a more efficient market that runs. But you also need to understand the dynamics of pricing in the market and we feel we should actually stop calling it the I and E window because it is now much more than the I and E . For us it is a market where everybody and anybody through the licensed institutions can participate. So we expect that over time the volatility you are seeing would normalise.”
“The role of the CBN is to intervene and keep the market at a fairly stable level. We have our views as to what that level is ; and as the market continues to oscillate around that level, there’s a need for us to intervene either by buying or selling . We have started intervening and we have been doing it for awhile and we will continue to intervene to bring the market to the levels that we believe it should be . Right now in the short run, these volatile times are expected but we expect them to moderate sooner rather than later”, says Acting CBN Governor.