Nigeria’s currency

[size=16pt]Toothpick alert[/size]

Desperate measures from the bank

Jul 4th 2015 | From the print edition


CENTRAL bankers may talk in martial terms of defending currencies against bloodthirsty speculators, but they seldom suffer wounds more grievous than a bruising of their egos. They can, however, cause untold harm to economies, as the Central Bank of Nigeria (CBN) is doing in puffing up its exchange rate.

The naira has been hit hard by a fall in the price of oil, Nigeria’s main export. The official exchange rate has slumped by almost 20% over the past year to about 196 naira per dollar. The black market rate, a more accurate gauge, is close to 230. Instead of allowing the naira to devalue, the central bank is trying to defend it by blocking imports. It has drawn up a list of disfavoured goods, and will not grant foreign exchange to import them.

Godwin Emefiele, the governor of the central bank, said he wants to conserve foreign reserves (which have fallen by about a fifth over the past year and now cover only six months of imports) and stimulate local production. “Nigeria cannot attain its true [potential] by simply importing everything,” he said.

The hit list appears to have been drawn up by someone wandering around a home and a building site and randomly pointing at items. It includes Indian incense, toothpicks and wire rods as well as more obvious luxuries such as private jets (demand for which could be slashed by simply barring government officials from flying in them). It also includes basics such as rice and tinned fish. Nigeria does not produce enough of these things to feed itself, but no matter. The nation must be shielded from foreign sardines.

Economists find the policy baffling. Central banks usually prop up their currencies if they are worried about inflation, or allow them to devalue to depress imports and stimulate exports. Nigeria, by contrast, appears to be set on achieving both an uncompetitive exchange rate and higher inflation. Whereas many investors were impressed by the previous CBN governor, Lamido Sanusi, who was sacked for exposing corruption, they fret about the harm being inflicted by the current one. Some wonder which would be worse for Nigeria: allowing him to serve the remaining four years of his term or undermining the independence of the central bank by sacking him.

http://www.economist.com/news/middle-east-and-africa/21656700-desperate-measures-bank-toothpick-alert

No ffing source

really?

.

Propaganda

hmmm

What sanusi cum soludo cld not do, dis great man is doing it, all he nids is our support.
Buh some uneducated people re bashing dis great man, is it not a shame dat d "giant of Africa" is still importing toothpick?

Okay...we dey watch

ok

Buhari is working..

Agenda.

Is that SO?............................................
Anyway anybody interested in buying fluffy bunny rabbits should PM my moniker ok?

OREMUSSANCTUS:
What sanusi cum soludo cld not do, dis great man is doing it, all he nids is our support.
Buh some uneducated people re bashing dis great man, is it not a shame dat d "giant of Africa" is still importing toothpick?

Yeah. You know better than the economist. Smh.

The man is trying his best. Without finance minister for up to 1month? What do you expect to get?


If na me be him, i for just resign leave matter for that Dullard and supporters to handle

INTROVERT:
No ffing source

Now it is Emefiele harming the economy, not Buhari.
Then it was GEJ harming the economy and not Sanusi.

Kabiyesi intellectualism at its best.

So you guys are longer concerned about buhari's ministerial list, someone somewhere is working so hard to remove him. Ewobi mor