CBN Assures Stable Naira Until Local Production, Exports Improve Significantly

The Central Bank of Nigeria (CBN) said the naira would continue to exchange at N360 to a dollar until production and export of goods increases significantly in the country.
Isaac Okorafor, Acting Director, Corporate Communications said, if apex bank had succumbed to pressures put on it to float the naira at the initial stage, the country’s currency would have depreciated to N3,000 to the dollar.
He noted that the dollar cannot be said to be over-valued against the naira, because currency valuation is not determined in isolation, but is also hinged on the strength and the ability of the country to produce and export. Why multiple exchange rate He explained that the CBN’s decision to maintain multiple exchange rates and allowed the naira to trade around N360 to a dollar was based on the fact that it is trying to help manage the economy until real production begins. He said, “You need to stimulate people through this kind of arrangement. Once we feel things are stable, we can allow a unified exchange rate. We understand what we are doing because the development of Nigeria is at the root of everything. We try to ensure that we do not increase the level of misery and we try to encourage people to try and produce with the little they have.” The CBN spokesman added that as soon as the Nigerian economy improves, especially with positive signals seen in the 2018 budget, the value of the naira would increase and the currency would drop below N360 to a dollar. “We believe that with time, once the level of infrastructure improves and there is better security, prices would begin to come down and as prices come down, production would start and Nigerians would begin to export. This is because your ability to export also determines the strength of your currency. “Nigerians should go and produce, add value to the goods and export. And once we start that, we see the naira shaping up. The naira would begin to strengthen. As long as we remain a nation of consumers, taking from other countries, and even killing those who are producing it here, our naira would continue to be weak.”

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