The central bank did not devalue the naira, Says Dr. Joseph Nnanna, CBN Deputy Gov­ernor Designate


Dr. Joseph Nnanna, the Central Bank of Ni­geria (CBN) Deputy Gov­ernor designate, yesterday shed light on the issue of the naira devaluation that has been widely spreed in the media. Dr Joseph Nnanna said the CBN did not actually devalue the naira so to speak. Ap­pearing before the Senate Com­mittee on Banking, Finance and other Financial Institu­tions, the Deputy Governor designate did a lot to explain and shed light on the whole naira devaluation issue.

Dr. Nanna said what the CBN has done is actually to announced a new exchange rate in compliance with market forces. His words, “The central bank did not devalue the naira so to speak; it only followed the three prin­cipal markets in Nigeria – the official, the retail and the par­allel.”

He further stated that this policy approach from the CBN will more or less be a temporary thing, not permanent.

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“We better do it now than later when we will have import control, which would bring about essential commodity crisis. Nigerians should be pa­tient. Unfortunately, Nigerians are always in a hurry. Let us give the central bank time to pursue a policy that will be a blessing to all of us. I com­mend the CBN for being pro­active with the policy.”Naira-currency

He further declared, “my take is that since we have development banks like the Bank of Indus­try (BoI), Nexim Bank, Bank of Agriculture, and so on, we can recapitalise all of them and mandate them to lend at a fixed interest rate to entrepre­neurs and other investors will­ing to invest in the Nigerian economy.

If we recapitalise the BoI and we tell the Managing Di­rector to lend at a specific inter­est rate, he will oblige us be­cause it is the taxpayers money.

“We cannot force the man­agement of a private com­mercial bank to lend at a fixed rate because they will take into consideration the risk pre­mium, especially when most people borrow without the in­tention of repayment.

Still on this issue, the Interna­tional Monetary Fund (IMF) yesterday gave its support to the action taken by the Central Bank of Nigeria. Mr. Gene Leon, IMF Mission Chief for Nigeria, in a statement yester­day, said, “We are supportive of and welcome these actions, which we view as comple­mentary and moving in the right direction. Of course, the global situation remains fluid and the key issue is be­ing ready to manage downside risks and for the authorities to be prepared, based on assess­ments of credible scenarios, to consider additional measures, as necessary.”

The statement further added, “In a combination of actions, most recently the communiqué after the Central Bank of Ni­geria’s Monetary Policy Com­mittee meeting of November 24-25, the authorities have an­nounced a set of policies aimed at mitigating the impact of the recent significant fall in global oil prices on the economy. These include: adjusting the exchange rate, resubmitting the Medium Term Expenditure Framework to the National Assembly with proposed tax and expenditure measures to achieve the deficit target con­sistent with a lower budget oil price and tightening monetary policy as necessary.”