Godwin Emefiele, governor of the Central Bank of Nigeria, CBN, was emphatic yesterday that the current efforts of the federal government to revive the country’s economy, would pull the country out of recession by the end of the second quarter or early in the third quarter of this year.
Emefiele said the Senate President had invited him to brief the Senate leadership and to provide updates on the foreign exchange markets in a closed door session. He explained that in the last two months, the CBN has been involved in some form of intensive intervention in the foreign exchange market and this has fortunately resulted in a downward trend in the parallel market price of foreign exchange, from as high as N525 to a dollar to as low as N370.
“Right now, it hovers between N370 and N380. I think it’s an opportunity for me to say that we are going to continue this intervention because the reserves look very good. As I speak to you, our (external) reserves stand at above $31bn and that provides us enough of 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. If you want to import raw materials, you will get foreign exchange; you want to import plant and equipment, you will get foreign exchange; you want to pay school fees or you are a small business that wants to buy foreign exchange for you to import your small items, you will procure foreign exchange,” Emefiele told journalists at the end of the meeting with the leadership of the Senate.
He said the CBN would continue its intervention in the foreign exchange market as the efforts of the apex bank so far has yielded positive results.
According to the apex bank boss, prices of commodities have started trending downwards, an indication that the rate of inflation has also reduced.
Consequently Emefiele said he was optimistic optimistic that by the end of the second quarter, or latest the third quarter, the country should be out of recession.
Emefiele said another initiative aimed at dragging the country out of recession was the policy announced last week to encourage foreign investors in the country’s forex market. “It is the market or window that is opened for them to bring in their foreign exchange and come into the market on what we call a willing-buyer, willing-seller basis, in which case there will be no form of any price intervention by anybody, including the Central Bank of Nigeria. Indeed, with the kind of firepower that we have, we are also going to play in that market to ensure that as the prices move on based on the managed float regime that we run, we should be able to control the price based on the willing-buyer, willing-seller basis,” Emefiele explained.