According to the Director of Corporate Communication, Ugochukwu Isaac Okoroafor, the Central Bank of Nigeria (CBN) had to resist powerful forces including several very influential individuals and organizations who wanted to float the Naira despite the uncertainty of exposing the nation’s currency to the extreme impulses of the market. Speaking at an interactive session with editors in Abuja during the weekend, the CBN chief concluded that these powerful forces that were determined to pillage and control the economy by insisting that the Naira be floated.
Although not mentioning exactly why, the CBN chief also insinuated that the National Assembly could be among those piling pressure on the CBN through their incessant summons. These summons were “sometimes every day, seven times in a week.” According to him, “at every hearing in the National Assembly, the CBN will always be invited” demonstrating how frequent the summons.
Okarafor went on to laud the wisdom of the CBN’s course to as he noted the positive outcomes in the forex management system as well as the near convergence of both black market and official market exchange rates. He also noted that the current 0.55% growth index of the economy is another testimony of the success of their method. The next target of the apex bank is how reduce the inflation to a single digit.
It is an open secret that some international financial institutions such as the World Bank and the International Monetary Fund (IMF) were campaigning for the float of the Naira as the only cogent way to solve the chronic dollar shortage as well as stimulate economic development. They could form the institutions that the Okarafor was referring to when he said the CBN had to resist powerful forces. However, the CBN refused to budge, rather opting for a gradual relaxation of currency controls it had earlier tightened through a flexible forex policy which began implementation inn February this year.
Since then, the disparity between the official rate and parallel market rates, which at one time hovered at around 20%, has virtually disappeared. Similarly, forex liquidity has significantly improved with majority of the genuine demand for forex being satisfied. These results have enabled the CBN to have the last laugh, despite the tense moments that must have accompanied their implementation of the unorthodox, risky but successful methods.