By Christian George
The Central Bank has attributed the country’s weak currency to the insatiable demand for dollars and foreign goods by Nigerians.
According to The Guardian, the apex bank governor, Olayemi Cardoso; Ministers of Finance, Wale Edun; Budget and National Planning, Senator Atiku Bagudu; Agriculture and Food Security, Senator Abubakar Kyari, yesterday, explained in details the steps being taken by the Federal Government to stabilise the economy by addressing the spiraling inflation and volatile foreign exchange regime that have pushed millions of Nigerians below the poverty line.
The top government officials spoke during an interactive session with the Senate Committees on Finance, Appropriations, Banking, Insurance and other Financial Institutions, at the Senate Chamber, National Assembly Complex, Abuja.
The CBN governor who was the first to address the senators, attributed the weakness of the naira to the insatiable appetite of Nigerians for the dollar and foreign goods, stressing that without moderation for demands for USD, the CBN has no magic wand to stop the free fall of the naira. He has, therefore, urged Nigerians, especially the elite, to reduce their appetite for the dollar, consumption and usage of foreign goods; and patronage of foreign schools and hospitals.
He however informed members of the committees that series of measures put in place by the apex bank recently to strengthen the economy were yielding results, disclosing that there has been an inflow of about $1billion into the economy.He also indicated that the Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira.
He told the lawmakers that the apex financial institution in the country had no magic wand to hurriedly get the naira stabilised.
In his words: “The Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira.
“Factors contributing to this situation include speculative forex demand, inadequate forex supply, increased capital outflows and excess liquidity.
“To address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the FX markets.”
He continued, “The measures, aimed at ensuring a more market-oriented mechanism for exchange rate determination, will boost foreign exchange inflows, stabilise the exchange rate and minimise its pass-through to domestic inflation.”
He stated that It is also clear that the task of stabilising the exchange rate, while an official mandate of the CBN, would necessitate efforts beyond the Bank itself. It will also include actions by corporates and individuals to reduce our frequent demand for the dollar for business and personal needs.
On inflation rate, the apex bank governor gave assurance that it would reduce to 21.4 per cent in 2024. He said: “Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 per cent at the medium term, aided by improved agricultural productivity and easing global supply chain pressures.”