₦airaland Forum

The Federal Government has spent approximately $8 billion in an attempt to stabilize the naira amid ongoing economic pressures.

This was made known by the CEO of Financial Derivatives Company, Bismarck Rewane on Friday.

Speaking on Channels Television’s News at 10 on Friday, Rewane highlighted the substantial interventions made to manage exchange rate volatility and inflation concerns.
He was speaking against the backdrop of the recent Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) which retained MPR at 27.50% on Thursday.

According to him, the government has not only spent billions defending the currency but has also raised additional funds through debt instruments.
“We’ve also borrowed $4 billion in bond issues. When you take a look at that, you’ll see there is a lot of work. We’ve actually spent almost $8 billion trying to support the naira at current levels,” Rewane stated.

Inflation is rebased, but what does it mean?
Rewane also discussed the recent rebasing of Nigeria’s inflation data, which has led to conflicting interpretations of the country’s economic realities. He outlined three different methods of measuring inflation, each presenting varying figures:

Old Method: Inflation stands at 34.8%
New Method (Rebased Data): Inflation drops to 24.4%
Market Survey (Real Inflation): Inflation is closer to 33%
Expressing skepticism about the sharp decline reported in the new inflation metric, he noted that the figures might not reflect the reality of everyday Nigerians.
“There’s no way that inflation can reduce by 10% in a short period. The man on the street does not believe that inflation has come down as sharply as that,” he said.

What this means for Nigerians
The ongoing pressure on the naira, coupled with inflation uncertainties, raises concerns about the effectiveness of government policies in stabilizing the economy.

While official figures suggest inflation is moderating, market realities indicate otherwise, leaving consumers to grapple with rising costs of living.

Recall that on the CBN Governor Olayemi Cardoso had, in announcing the MPC decision said, “At this meeting, the Monetary Policy Committee noted with satisfaction, recent macroeconomic developments which are expected to positively impact the price dynamics in the near to medium term.

“These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the moderation in the price of PMS,” Cardoso stated.

He also noted, “Members, however, were not oblivious of the persisting inflationary pressures, driven largely by food prices. The Committee noted the recent rebasing of the commodity price index (CPI) by the National Bureau of Statistics (NBS), which reviewed the weights of items to reflect current consumption.”

Ojuntana:
Old Method: Inflation stands at 34.8%
New Method (Rebased Data): Inflation drops to 24.4%
Market Survey (Real Inflation): Inflation is closer to 33%
Expressing skepticism
“There’s no way that inflation can reduce by 10% in a short period. The man on the street does not believe that inflation has come down as sharply as that,” he said.

https://nairametrics.com/2025/02/22/fg-has-spent-8-billion-to-support-the-naira-rewane/

Paraman:
Is there a time the NBS said inflation drop by 10%?

Ojuntana:
This is concerning
There seems to be a disconnect between the policy being propagated in the public space and the one implemented with real effects on Nigerians
The clueless government have been claiming that floating naira is one of the reforms that have been yielding fruits with the naira getting stronger
Now we're being told $8bn was used to shore up the naira and another $4bn to shore up reserves
The rebased rate was expected to reflect the new trends based on those reforms
What is obvious is that the rebased inflation rate does not reflect the market.
The former rate is more realistic
Where did the figures come from then?
Where exactly is this so-packaged reforms taking Nigeria to?
Is there any tangible benefit to be derived in the true sense and what are the benefits?

NaijaNaWaa:
We have been through this motion many times before.

Common sense and experience tell us that exchange rate is a function of supply and demand. Fact is that CBN doesn't have the FX war chest to subside the dollar for long. And btw, if the real reform was market determined exchange rate, it's contradictory for CBN to continue with dollar subsidy.

Finally, a more reasonable choice is to keep the exchange rate stable rather than forcing it down. It's creates volatility and makes planning difficult.

We have been through this motion before and we know how it ended. All these sponsored, Cardoso-praise singing PR stunts don't count.

DeLaRue:
Nothing new.

Every country steps in to support their currency.

Jokerman:
So why has the naira not dropped to like 700 per $1?

Ojuntana:
This is concerning
There seems to be a disconnect between the policy being propagated in the public space and the one implemented with real effects on Nigerians
The clueless government have been claiming that floating naira is one of the reforms that have been yielding fruits with the naira getting stronger
Now we're being told $8bn was used to shore up the naira and another $4bn to shore up reserves
The rebased rate was expected to reflect the new trends based on those reforms
What is obvious is that the rebased inflation rate does not reflect the market.
The former rate is more realistic
Where did the figures come from then?
Where exactly is this so-packaged reforms taking Nigeria to?
Is there any tangible benefit to be derived in the true sense and what are the benefits?

DeLaRue:
Nothing new.

Every country steps in to support their currency.

MadamExcellency:
The Government has started doing what should have been done after the refineries started working. There is no reason the dollar shouldn't fall to N500. Our refineries are working. Let's stabilize foreign exchange and see multinationals come back to invest in Nigeria.

Jokerman post=134263037[b:
]But Tinubu told us he has stopped subsidizing the Naira, hence it's floatation.. why go back to his vomit??[/b]

Well, let's waits for the APC Social media soldiers WhatsApp group message