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Why Forex scarcity prevails — Emefiele breaks silence on crashing Naira

Nigeria’s Apex Bank Governor, Mr Godwin Emefiele, says the decline in crude oil earnings as well as the retreat by foreign portfolio investors significantly affects the supply of foreign exchange into Nigeria.

Emefiele made the submission during the 55th Annual Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria in Lagos on Friday.

He adds that in order to adjust for the decrease in the supply of foreign exchange, the naira depreciated from N305/$ to N360/$, and subsequently to N380/$.

The Central Bank of Nigeria, (CBN) Boss also adds that the nation’s external reserves, which currently stand at $35billion, are sufficient to take care of seven months of imports of goods and services.

His words:

“The decline in crude oil earnings as well as the retreat by foreign portfolio investors significantly affects the supply of foreign exchange into Nigeria.

“Our external reserves currently stand above $35billion are sufficient to cover seven months of import of goods and services.

“With the decline in our foreign exchange earnings and successive exchange rate adjustments, the CBN has continued to implement a demand management framework, which is designed to bolster the production of items that can be produced in Nigeria, and aid conservation of our external reserves.

“Due to the unprecedented nature of the shock, we continued to favour a gradual liberalisation of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which, rapid changes in the exchange rate could have on key macro-economic variables.

“This we believe is in line with international best practices in countries where managed float arrangements are in operation.”

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  1. I’ve read the stuff. Emefiele is talking his usual crap. He did admit one thing that the government is denying, that Investors are leaving Nigeria. His calculation that our $35bn foreign reserve is sufficient for 7months imports is based on the usual voodoo economics. The guy is full of shit. He’s what you get when you appoint a round tripper banker as your CBN governor. He’s also riding high in the ignorance and incompetence of our finance minister who has a deep level of ignorance on how finances and financial instruments work.

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