Central Bank of Nigeria (CBN) yesterday insisted that diversification of the economy occasioned by improved exports can curb the continued depreciation of the naira against other currencies and help to conserve the foreign reserve, BusinessDay investigation revealed.
This is coming as stakeholders last week said only the enhancement of Nigeria’s productive base and a tempering of the appetite for foreign goods can guarantee sustainable development.
Ibrahim Muazu, director, corporate communications department, CBN, emphasised the need to boost FX supply in order to reduce the pressure on demand.
He told BusinessDay that Nigeria needed to improve on its export and reduce some demand on foreign goods and diversify economy in such a way that the country could produce and consume locally made goods.
Responding to the argument on whether the CBN has increased the number of 41 items restricted from accessing forex to include travelling for health and education abroad, Muazu said clearly that the apex bank had not taken such decision.
Aminu Gwadabe, acting president, Association of Bureau De Change Operators of Nigeria (ABCON), called on the CBN to sanitise the entire segments of FX market.
“So many things are happening in the market. They should cleanse the entire currency market,” he told BusinessDay. He noted that the CBN within two weeks supplied $130 million to only seven deposit money banks, adding that it suggest that there were malpractices going on at the forex market.
However, the naira gained N1.88k or 0.94 percent against the dollar at the interbank FX market. It closed at N197.47k/$ on Monday from N199.35/$ on Friday last week at the interbank FX market.
In line with recent trend observed in the Nigerian FX market, forex illiquidity has continued to see exchange rate depreciate at the less-regulated segments (BDC and parallel markets), as demand remains atop supply. Interbank liquidity declined by as much as N580 billion on Tuesday, after banks made provisions for a CBN currency auction held on Thursday.
The official (CBN) and interbank rates have remained stable at N197/$ and N199.10/$1, respectively, due to the subsisting fixed exchange rate policy of the CBN, while the spread between the official and the less regulated segments continue to widen, according to Afrinvest Securities Limited.
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