Central Bank of Nigeria (CBN) said it was prepared to use the nation’s foreign reserve to ensure the stability of the Naira, meaning that the apex bank is not about to devalue the currency.
Sanusi Lamido Sanusi, governor of the bank said that the CBN would stick to its position unless forced to do otherwise.
As at August this year, Nigeria has some $47 billion in foreign reserves- so called public sector foreign assets that are readily available to, and controlled by the CBN.
Sanusi told journalists at the end of the Monetary Policy Committee meeting in Abuja, Tuesday, that the argument of those pushing for the devaluation of the Naira did make any valid economic sense in an import-dependent country like Nigeria.
His words, “as far as the Naira is concerned, the CBN has always said that we are committed to its stability. I know there are some people who don’t share that view. But I have not personally heard any economically valid argument as to the benefits of devaluating the Naira up to this point in time.
“It will not improve our export nor reduce our imports into the country. It will not improve our fortunes as long as our structural reforms have not been implemented.
“My view and the view of the CBN is that if we will have to use some of the our serves to support the currency, we will. No central bank governor will say that he will support the currency at all and every cost but we want to be very clear in our minds and to the public that there is no country in the world that will allow its currency to be just determined by the market.
CBN has the duty to direct financing of payment imbalances, and directly regulate the magnitude of such imbalances, through intervention in the exchange markets to affect the currency exchange rate and/or for other purposes from the foreign reserves.