Governor of Nigeria’s apex bank Godwin Emefiele has said that the parallel market is shallow and illegal, patronise by those who engage in illicit transactions and for “corruption purposes”
He stated this at the end of the last 2020 Monetary Policy Committee (MPC) meeting, in Abuja.
He said it is unfair to use the parallel market rate “to say that our currency is overvalued and therefore calling for devaluation” described it as “very unfortunate”.
Emefiele stated that the activities of speculators are a detriment to the economic policies of the Central Bank of Nigeria (CBN), saying financial analysts who should know better would not have their way as they continue to call for the devaluation of the Naira.
Emefiele said the parallel market constitutes about five per cent of the foreign exchange market “which is patronised by people who go there for cash to offer bribes and corruption.”
He said the CBN will not succumb to the call by analysts who use the parallel market as the basis for devaluation.
“We don’t agree that the determination of the foreign exchange should be based on a market that is tainted. We will not use this as our benchmark to determine the value of our currency.”
Devaluation of Naira
The CBN governor said the Naira had already been devalued by about 28 per cent in 2020, “just like many other currencies of the world.”
“At the E& I (Import& Export) Window, the rate is about N386 or N387 / $1. We don’t control the I & E window. Why will anyone use the parallel market to say that the exchange rate is over N480/$1?” he asked.
Nigeria’s Economic Recession Recovery Q1 of 2021
Speaking on the current recession, Emefiele he is “cautiously” optimistic that with the record of performance of various sectors, in the first quarter of 2021, “we will exit the recession.”
He stated that the external reserves stood at $35.18 billion as of November 19, 2020, compared with US$35.95 billion at end of September 2020, as crude oil prices continue to fluctuate with downward pressure.
He also disclosed that about N149 billion had been given to 317 beneficiaries of the COVID-19 Fund, consisting of Targeted Households, and Small and Medium Enterprises (SMEs).
Also, another N92 billion was given to operators under the Agri-business/Small and Medium Enterprises Investment Scheme (AGSMEIS) and another N60 billion to healthcare sector players, in the battle to contain the COVID-19 pandemic and improve the nation’s health sector.