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Why we won’t devalue naira – CBN - Business - Nairaland

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We Can’t Float Naira, Cbn Tells Imf / Recession: EU Advises Nigeria To Devalue Naira. / If We Devalue Naira Again, We Will Kill Nigerians, Says CBN Governor (2) (3) (4)

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Why we won’t devalue naira – CBN by msmon(m): 9:03pm On Jul 03, 2015
The Central Bank of Nigeria, CBN, has disclosed
that its decision not to further devalue the naira
was borne out of the need to safeguard the
Nigerian economy from the shocks and negative
impact the depreciation will have on the economy.
The apex bank in a statement signed by its Director,
Corporate Communications, Mr. Ibrahim Mu’azu,
maintained that the CBN does not panic and will
not take desperate measures to satisfy few
misguided interests in the market.

According to Mu’azu, who was reacting to an
article in the Economist Magazine, he said the
article seemed to ignore the fact that the exchange
rate is simply a price that is essentially determined
by the forces of supply and demand, adding that
the CBN believes that the 48 per cent decline in oil
prices may not be transitory and made bold policy
changes including closure of the subsidized Official
Foreign Exchange (Forex) Window, which resulted
in a 22 per cent depreciation in the currency, the
Naira.

“Because the Nigerian economy is heavily
dependent on imports and the exchange rate pass-
through to inflation is high, we believe that this
adjustment is optimal at this time.

“Contrary to the article’s argument, adjustments to
a sharp decline in supply of US Dollars cannot all
be borne by an indeterminate depreciation, without
considering the full impact on the Nigerian
economy.

“The demand side also has to be considered, not
just in response to the pressure on the Naira but as
an opportunity to change the economy’s structure,
resuscitate local manufacturing, and expand job
creation for our citizens.

“Take rice imports, for example: why should we
keep allocating scarce forex to rice importers when
vast amounts of paddy rice of comparable quality
produced by poor hardworking local farmers across
the rice belts of Nigeria are wasted, and farmers
are falling deeper into poverty while we export their
jobs and income to rice producing countries?
“Few decades ago, Nigeria was one of the world’s
largest producers of palm oil but today we import
nearly 600,000 Metric Tonnes while Indonesia and
Malaysia combine to export over 90 percent of
global demand”, he stated.

Muazu, however, noted that under the present
circumstances, the CBN will do the little it can,
through the introduction of huge subsidies, to
protect the jobs and incomes of local farmers,
using some of the same principles western
economies used to justify the protection of their
farmers.

He further stated that Nigeria cannot attain its full
potentials by importing anything and everything,
adding that for a long while now, the quest for
importation has significantly weakened the
operating capacities of industries in the country.
Muazu added that like other oil-exporting countries,
Nigeria is grappling with its share of the aftermath
of the oil price decline, noting that despite the
challenges, Nigeria’s economic fundamentals
remain strong.

According to him, inflation is still within the CBN’s
single-digit band, the exchange rate has stabilized
around N197 per US Dollar for the last five months,
GDP expanded by four per cent in the first quarter
of 2015, and 469,070 new jobs were created in the
same quarter.

He said, “But now is a good opportunity to begin a
reversal. Although the article hastily derides this
idea as lacking in economic foundations, it is the
same principles upon which many other countries
do not allow importation of certain products.

“More also, if the article believes the CBN should
adjust to reflect the current parallel market rate,
why was this suggestion not made in the week
following the inauguration of President Buhari when
the same rate fell sharply to under N190 per Dollar?

“Furthermore, it appears condescending to suggest
that the list of items seemed ‘to have been drawn
up by someone wandering around a house and a
building site’. On the contrary, items were only
included after thorough and exhaustive discussions
at the highest policymaking body of the Bank, with
the strategic national interest of Nigeria”.

“With ingenuity and productiveness, we believe that
Nigerians will seize this opportunity and use it for
the greater good of the country. As we transition
into a new administration in Nigeria, we must
continue to ensure policy stability at all times”, he
concluded.

http://dailypost.ng/2015/07/04/why-we-wont-devalue-naira-cbn/

3 Likes 2 Shares

Re: Why we won’t devalue naira – CBN by Goovo(m): 9:04pm On Jul 03, 2015
Ok
Re: Why we won’t devalue naira – CBN by Nobody: 9:04pm On Jul 03, 2015
grin

VERY LOGICAL...

I HOPE IT GETS BETTER

6 Likes

Re: Why we won’t devalue naira – CBN by vizboy(m): 9:05am On Jul 04, 2015
cheesy grin
Re: Why we won’t devalue naira – CBN by Nobody: 9:33am On Jul 04, 2015
msmon:


Check thread!
Checked... next Please...
Re: Why we won’t devalue naira – CBN by stevecantrell: 10:02am On Jul 04, 2015
CBN is making a U-turn..bankers can eat their heart out.

1 Like

Re: Why we won’t devalue naira – CBN by ubaobi: 10:06am On Jul 04, 2015
Who is d minister of finance?.. I won't forget how one DULLARD**HO promised to make #1 equal to $1 and to stabilize oil price. we are patiently waiting

3 Likes

Re: Why we won’t devalue naira – CBN by KENZYYONG(m): 10:06am On Jul 04, 2015
wen will ever be the first to comment
Re: Why we won’t devalue naira – CBN by Nobody: 10:06am On Jul 04, 2015
cheesy
Re: Why we won’t devalue naira – CBN by Christianwalase: 10:06am On Jul 04, 2015
Ok na
Re: Why we won’t devalue naira – CBN by RichDad1(m): 10:07am On Jul 04, 2015
The CBN governor is as Clueless as the Person that appoints him. Your days are numbered.

5 Likes 1 Share

Re: Why we won’t devalue naira – CBN by Segadem(m): 10:07am On Jul 04, 2015
this man again?
Re: Why we won’t devalue naira – CBN by Segadem(m): 10:07am On Jul 04, 2015
RichDad1:
The CBN governor is as Clueless as the Person that appoints him. Your days are numbered.
Re: Why we won’t devalue naira – CBN by Segadem(m): 10:08am On Jul 04, 2015
KENZYYONG:
wen will ever be the first to comment
Re: Why we won’t devalue naira – CBN by blym4real: 10:10am On Jul 04, 2015
Hmm.

Are the cbn staffs patronizing the locally made rice? Especially the cbn governor.

5 Likes

Re: Why we won’t devalue naira – CBN by bornmekus: 10:11am On Jul 04, 2015
Ok,We are waiting for the outcome.
Re: Why we won’t devalue naira – CBN by UnknownT: 10:11am On Jul 04, 2015
We need to hear from Nairaland's Chief Economist Prof. Ms Ngeneukwenu. Please come and throw more light on the issue grin

9 Likes

Re: Why we won’t devalue naira – CBN by SexyFox(f): 10:13am On Jul 04, 2015
I love Jesus. cheesy

2 Likes

Re: Why we won’t devalue naira – CBN by Masculity(m): 10:17am On Jul 04, 2015
On a sheet of paper Nigeria is highly develop country but when it comes to reality...ask ordinary person along the street.
Re: Why we won’t devalue naira – CBN by Dannyset(m): 10:17am On Jul 04, 2015
If it would enable them steal and loot money they would do it.
Re: Why we won’t devalue naira – CBN by rickRamozay(m): 10:18am On Jul 04, 2015
issorait




fp tinzzzzz
Re: Why we won’t devalue naira – CBN by rickRamozay(m): 10:19am On Jul 04, 2015
issorait




fp tinzzzzz
Re: Why we won’t devalue naira – CBN by Buchukwu: 10:20am On Jul 04, 2015
You can't devalue what's already devalued. Bunch of mad people.
Re: Why we won’t devalue naira – CBN by YourCoffin: 10:20am On Jul 04, 2015
These people should learn how to communicate in layman's terms. Even as educated as I seem to be, I'm grappling with this article.

A kind hearted economists should please break it down for us. Thanks.
Re: Why we won’t devalue naira – CBN by juman(m): 10:33am On Jul 04, 2015
CBN effort to enliven local productions and reduce importation is commendable. Hope it is not just normal nigeria talk talk thing.

But on currency devaluation, CBN can be living in false paradise like during abacha time when official rate was 22 naira to one dollar while it was almost 80 naira per dollar at the outside market.

That enhance a lot of corruption where those that had access to get the dollars at government rate of 22 naira per dollar were selling those dollars outside at 80 naira per dollar.

Hope the CBN quest for 'eonomic stability', the external reserve would not wiped out. grin grin

1 Like

Re: Why we won’t devalue naira – CBN by ProfessorPP(m): 10:37am On Jul 04, 2015
ONE DAY NIGERIA, WILL BE THE WOLD U.S.A.
Re: Why we won’t devalue naira – CBN by benjaminiyke(m): 10:48am On Jul 04, 2015
YourCoffin:
These people should learn how to communicate in layman's terms. Even as educated as I seem to be, I'm grappling with this article.

A kind hearted economists should please break it down for us. Thanks.
hahahaha. I totally agree with you,I also found it difficult to grasp the message in this article,we have some really educated personnel in this country with great potential....if only we can stamp out corruption from this country we can become one of the leading countries in the world. We have so much potential here.
Re: Why we won’t devalue naira – CBN by msmon(m): 10:50am On Jul 04, 2015
themosthigh:
[size=18pt]Buhari have failed nigeria
God have failed nigerians
Should we submit to satan like the west?[/size]


Submit to Shaytan so that he pilot your affair and lead you to you final about (?)
Re: Why we won’t devalue naira – CBN by ESUNAM(m): 10:54am On Jul 04, 2015
God is not fail Nigeria, is Nigeria that fails God

2 Likes

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