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CBN Restates Commitment to Defending the Naira

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The Central Bank of Nigeria (CBN) has reiterated its commitment to defending the naira.
Deputy Governor (Economic Policy), CBN, Dr. Sarah Alade said this yesterday at the Euromoney Conference held in Lagos.

Alade, who was represented by the Director, Research Department, CBN, Mr. Charles Mordi, restated that the Nigerian economy is stable and healthy.

However, speaking in a chat with journalists, on the sidelines of the event, Mordi said: “We have always said that we are not going to defend the naira at all cost but so far so good, as at the time the CBN Governor Emefiele came in, the reserves was around $36 billion but now we have managed to push it up to around $40 billion so we are still comfortable.

“In the past it had gone way below that and we managed to defend the naira but it becomes obvious, certainly the bank would do the right thing.”
He also stressed the need to strike an appropriate balance between monetary and fiscal policies, saying, there is a limit to what monetary policy can do to deliver economic growth.

Also speaking exclusively to Source on the effect of tightened monetary policy, the Group Managing Director/Chief Executive Officer, First Bank of Nigeria Limited, Mr. Bisi Onasanya pointed out that actions taken to defend the naira had impacted directly on the growth of the real sector.

Onasanya said: “We should try and strike a balance between tightening monetary policy and also making funds available to the real sector for the growth of the economy and there is a limit to which tightening should be applied and there is a point where you need to allow funds to flow to the real sector of the economy particularly financing small and medium scale businesses and we need to go to round tables to discuss how best to achieve it.

“But tightening if it is too much hurts and I think we have gotten to a place where we need to re-evaluate our options and make sure we take the best decision.”

Furthermore, the First Bank boss called for a reduction in interest rate.

“We need to be able to move from wealth creation to job creation, as we have policies in Nigeria today that makes it extremely difficult for businesses to grow.

“We have policies that fight exchange rates and on one hand tightening by saying there is so much liquidity in the system,” he added.

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