- I&E Forex Inflow Sustains Naira- Emefiele
The governor of the Central Bank of Nigeria, Godwin Emefiele, has said the over US$60 billion foreign exchange transactions performed through the Investors and Exporters (I&E) forex window has helped sustain the Naira value in the last 29 months.
Emefiele, who spoke on ‘Delivering a strong Sustainable Growth for the Nigerian Economy’ at the 54th Annual Bankers Dinner in Lagos at the weekend, said the Investors and Exporters’ forex window has processed more than $60 billion worth of transaction since it was launched in April 2017.
He said the foreign exchange inflow has helped maintain stable naira value and deepen economic growth.
He said: “With a moderated inflation rate, positive Gross Domestic Product (GDP) growth and improvements in our external reserve position, the naira-dollar exchange rate at the I&E Forex window has remained stable for the past 29 months at N360 – $1 and we have witnessed significant convergence in the exchange rate across the various market windows. Local currency has also remained at N306 to dollar at the official market.”
The governor said during the same period headline inflation has declined from 18.7 percent to 11.61 percent in October while the interest rate has moderated to 13.5 percent.
Emefiele said: “We recently noticed an uptick in headline inflation, which stood at 11.61 per cent in October 2019, partly driven by cost – push factors such as the recent border protection measures of the Federal Government.
“We believe this effect will be temporary, as efforts are currently being made to induce greater production of staple food items. However, core inflation as at October 2019 is now under nine per cent. This decline in inflation has been due to our maintenance of a tighter monetary policy rate at 13.5 percent, and improved inflow of foreign exchange.
“Besides, the forex reserves remained above $40 billion as of October, relative to its low point of $23 billion in October 2016. We have been able to build our reserves in the midst of lower oil prices, as strong reserves aid the confidence of domestic and external investors. Today, our current stock of external reserves is able to finance 9 months of current import commitments.”
Speaking on economic recovery and growth, Emefiele said the apex bank would maintain its present monetary stance, especially with headling inflation now rising.
“Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, the CBN will continue to ensure that the policy interest rate is delicately set to balance the objectives of price stability with output stabilisation,” he explained.