ECONOMYTOP STORY

CBN may devalue the naira after MPC meeting – experts

Niyi Jacobs

Speculations are rife amongst investors and financial experts that the Federal Government may soon devalue the naira even as the Central Bank of Nigeria, (CBN) is scheduled to hold its Monetary Policy Committee (MPC) meeting on the 23rd and 24th of May, 2016.

Devaluation talks had been put on hold after President Muhammadu Buhari’s continued stance against the action. According to him, devaluation doesn’t help the poor man on the street.

However, speculations began to emerge on May 11 after Vice President Yemi Osinbajo, announced a review of the currency regime that “may feature” a devaluation as a way of boosting foreign exchange inflows.

Since then the currency had depreciated more against the dollar at the black market. It remained pegged at N199 per greenback on the official CBN market.

An economist, Dr Ayo Teriba on Friday urged the CBN to set a policy that would stabilize and protect the country’s currency from devaluation.

In an email, Teriba said if the foreign exchange supply was not solved, the country faced the risk of repeated rounds of devaluation of its currency.

The economist said that the country’s foreign exchange challenges, occasioned by dwindling revenue from crude oil, was responsible for the pressure on CBN from some quarters to devalue the naira.

He advised that the upcoming MPC meeting of the bank should address the issue of foreign exchange.

The expert said that solving the foreign exchange issues would stabilise the naira and liberalise capital inflow into the country.

He said that the foreign exchange shortfall could be supplemented through export earnings, foreign direct investments and Diaspora inflows.

“Unless the MPC comes up with ideas on how government can boost FOREX inflows, there is nothing they can do about the naira,” Teriba said.

He urged the government to stimulate the economy by creating an enabling environment and incentives that would encourage the private sector to explore and drive the key sectors of the economy.

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  • Today, I went to the beach with my kids. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She put the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is totally off topic but I had to tell someone!

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