- Says with economy picking up, naira will strengthen
Kasim Sumaina in Abuja
The Central Bank of Nigeria has said, as part of its efforts to alleviate the sufferings experienced by Nigerians, who source forex for school fees, medicals and personal traveling allowance (PTA), it has decided to fund banks directly with additional forex to satisfy their obligations .
Acting Director, Corporate Communications, CBN, Isaac Okoroafor, who dropped this hint when he was featured as a guest on Arise News Network, a sister company of THISDAY, also gave the assurance that with the gradual improvement in local production and the economy in general, the value of the naira measured against the United States dollar would strengthen.
Preparatory to providing the additional forex, the CBN had, last Thursday, pegged the exchange rate for payment of the school fees, and personal travel allowance (PTA) and medicals at N375 to the dollar. This new rate as quoted by a source will take effect from Monday.
According to Okoroafor, “The Central Bank of Nigeria has taken a decision to directly fund banks with additional foreign exchange to be able to take care of some personal travel allowance, school fees and medical payments. With that, we have tried to set an exchange rate for those transactions at 20 per cent above the interbank rate – that is, 20 per cent above the interbank rate that ranges between N305 and N315.”
The CBN spokesman advised Nigerians, who have legitimate reasons to procure forex to approach their banks, where their needs would be cater for rather than go to the parallel market. “The banks have been directed to sell to all the people that will come up for it and they actually have been directed to open up avenues at the airport so that they can deal with these demands,” he explained.
Okoroafor admitted that, there was a shortage of the dollar, which rates at the interbank market range from N305 to N315, and N520 at the parallel market. But, he was quick to add that, “the cause is obvious: we can’t earn enough again and we’re trying to rationalise and prioritise what we have at the moment so that it can meet the most basic needs of the country.”
Driving home his position on the imminent gain in the value of the naira, Okoroafor enthused that, the economy was already witnessing reduced rate of importation of goods and items that could be produced locally, which has resulted to reduced pressure on forex. With this happening, he believed the value of the naira would witness a thrust within the shortest possible time.
Further allaying the fears on the state of the naira, which has been pummelled at the foreign exchange market, Okoroafor gave the assurance that the national currency would not plunge further.
In fact, the spokesman, who was optimistic that the naira would reverse the falling streak, contended that there was no amount of ‘machinations’ and ‘tricks’ that would make the value of the naira against the dollar to depreciate further to N1000.
“Although people are trying to use all kinds of machinations and tricks to bring us to that (N1000/$1), it won’t happen because the economy itself, local production is picking up and the rate at which people import useless things is coming down.
“I am very certain the naira is going to come back, gradually,” he said.