CBN Refutes Bloomberg Report, Says No Change in Exchange Rate Structure

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By Obinna Chima

The Central Bank of Nigeria (CBN) on Wednesday described as false, a Bloomberg report which stated that there has been a change in the country’s exchange rate structure.

The Director, Corporate Communications, CBN, Mr Isaac Okoroafor, in a note to THISDAY, said the exchange rate remains stable.

Okoroafor reaffirmed the bank’s commitment towards ensuring stability in foreign exchange market.

“There has been no change in Nigeria’s exchange rate structure. The CBN has not floated the naira. The exchange rate remains stable. Speculations and reports to the contrary are false,” Okoroafor said in response to the Bloomberg report.

CBN Governor, Mr. Godwin Emefiele, at a recent forum with private sector operators at the weekend, maintained that the bank would continue to defend the naira, saying that the CBN Act demands that the bank “defend” the Naira using the foreign exchange reserves.

“In effect, the CBN would be disobeying the law establishing it, if it sits idly by and allow the Naira to be determined wholly by the so-called market forces.

“Second, those who call for floating of the currency betray their willful ignorance of the effects of significant depreciation, however short-lived, on inflation.

“Several empirical analyses have shown that the pass-through of changes in the exchange rate on consumer prices is almost one-to-one. This implies that for every percentage point depreciation in the Naira, there is almost the same rise in inflation.”

The CBN governor also said policies of the apex bank in the past five years had been focused on protecting the purchasing power of the poor and vulnerable persons in the country. 

According to Emefiele, the apex bank is very comfortable staying on the side of the weak, vulnerable, and poor masses and protecting their purchasing power.