CBN debunks claims on flexible exchange rate

The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele has debunked recent claims that the Federal Government has adopted a flexible exchange rate for its transactions.

The Governor clarified the issue while addressing the media after the MPC briefing.

According to the Governor, the statements by the Finance Minister, Zainab Ahmed were misunderstood, and further clarification should have been made from the apex bank to deter speculators wishing to profit from the “misinformation”.

Bloomberg had reported that Ahmed said, “Within the government and the central bank, there is only one official rate and that’s the Nafex rate.”

The US-news platform also claimed that the Minister told reporters that the government would now engage in a flexible rate for transactions that have until now applied to investors and exporters.

Emefiele however debunked these claims as ‘faulty reporting’, stating that Nigeria still operates a Managed Float exchange rate. He further explained that the managed float is a policy that allows the CBN to watch the market operations and intervene when necessary.  He also stated that the CBN has not intervened in the I&E window since January 2021.

The apex bank’s chief also stated that constitutionally, the mandate of foreign exchange policy lies with the CBN. Hence, any assertion in this regard without a comment from the apex bank may be seen as misleading. The CBN Governor appealed to members of the press to work with the apex bank to promote more transparency and accurate reporting.

The CBN Governor also commented on foreign exchange scarcity in deposit money banks. He stated that the CBN disburses no less than 80 million USD every week to the banks for payment of school fees, PTA, and business travel as part of the policy to address these issues. He also stated that the apex bank was looking into setting up call centres where FX complaints can be sent and addressed.

Note that CBN does not operate a floating exchange rate, it operates a managed float and it has not intervened in the I&E window since January 2021.

The CBN disburses 80 million USD weekly to commercial banks to deal with the FX demand.

Suzan O/NM