Business CBN Rejects Calls From US to Float the Naira



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The Central Bank of Nigeria (CBN) on Friday said it has declined calls from financial institutions in Washington urging it to float the naira.

CBN Spokesman Isaac Okoroafor, speaking to journalists on the sidelines of the World Bank/IMF meetings said the call to float the naira was laughable.

“The call here in Washington that we should float the naira, liberalise the market; our market is extensively liberalised and the call to float the naira is a bit laughable in our case,” he said.

“Yesterday, when Madame Lagarde was discussing the economy of Egypt, she lamented herself, the devastating inflation that is in that country.

“Egypt has half of our population, Egypt receives about 12 billion in foreign earnings and several billions in tourism. We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to benefit from massive depreciation.

“If you float the naira today, and given the discoveries by security agencies, you’ll discover that our case will be terrible. If Egypt today has an inflation rate of almost 31 percent, remember Angola also has about 36 percent inflation, ours is at 17.26.

“If we float the naira and we allow speculators and those with corruption money and all the people who create the bubbles to launch into the market, you can yourself imagine the kind of situation we will find ourselves

“Yes, we would go all out to practise economic theory the way they say you should allow your currency to float, but of course, you should also know that no country floats its currency; just leaving it to the dictates of the market.

“Our economies has its own peculiarities, and we cannot kill our people in the name of floating the naira.”

He also reiterated CBN’s resolve to ensure the drivers of the economy — small and medium enterprises (SMEs) have access to foreign exchange.


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