President Muhammadu Buhari says he is opposed to a further weakening of the naira, and has endorsed the Central Bank’s policy of restricting foreign-exchange trading.
“I don’t think it is healthy for us to get the naira devalued,” Buhari said in an interview in Paris with France 24 broadcast on Wednesday.
The Central Bank is providing ample foreign exchange to “essential services, industries,” he said.
The unqualified presidential backing of the policy of Central Bank Governor Godwin Emefiele, is bound to dampen the clamour by analysts and portfolio managers for a further weakening of the currency of Africa’s largest oil producer.
After a halving of oil prices in the past year, the Central Bank of Nigeria reacted to the naira’s drop to a record low in February by extending trading curbs and introducing bans on purchases of dollars by certain importers.
And this was after the naira had been devalued by close to 23 per cent, sparking panic, but much of that has now receded.
While the currency has since stabilised, foreign investors, local businesses and even some of Monetary Policy Committee members have complained that it is overvalued.
Emefiele has consistently said the foreign exchange controls were helping to stabilise the naira and replenish reserves.
“These policies have led to a significant stabilisation in the exchange rate and an improvement in market sentiments,” Emefiele said last month, in a speech to Nigeria’s Senate in Abuja.
The measures, coupled with efforts by the administration of President Buhari to cut wasted spending “have seen our foreign exchange reserves begin a gradual recovery,” he said.