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The Ministry of Finance, Budget and National Planning, yesterday, made a U-turn on the statement credited to the Minister, Mrs. Zainab Ahmed, to the effect that the Federal Government will jettison the Central Bank of Nigeria (CBN)’s official foreign exchange (FX) rate for the Investors’ and Exporters’ (I & E) window rate in its transactions.
The CBN governor, Godwin Emefiele, held on to his gun, describing as false the report attributed to the minister suggesting that the Bank has embraced a flexible exchange rate regime and harmonised the different rates. He insisted the apex bank still maintained managed floating, which allows it intervene in the market occasionally.
He said: “Let me repeat that Nigeria had not changed from its foreign exchange management policy. Nigeria remains on a managed float. What the managed float regime means is that the CBN, being the institution that has the core mandate for forex administration in the country would watch the market and see how the market operates.
“Depending on its reading, it would come from time to time to intervene in the forex market. It might interest us to know that since January, the CBN has not intervened in I & E window. The market had always operated within the band of about N409/$ and at some time it attains N412/$ and goes to N413/$.
That is the way it is supposed to move. Then CBN’s job is to watch and see the movement and from there determine whether or not to intervene to moderate the rate in the market in line with our reading of where we think the exchange rate should be.
“So when Bloomberg begins to conclude statement of the Minister, which I doubt because I have not heard the audio, that we have moved into the flexible exchange regime, I will just try to appeal to members of the press community to seek clarification, particularly from the authority. Section 4(2) of the CBN Act places the authority of forex management on the CBN.”
Emefiele said the country “is deemed not to be practising a multiple currency regime as long as rates vary or ranges around a band that is not more than two per cent below the nominal market rate’. He insisted that the minister did not speak about flexible rates.
However, her Special Assistant on Media, Mr. Yunusa Abdullahi, confirmed that his boss spoke to Bloomberg at the Villa on Monday. But he insisted the minister categorically said the country’s FX market had been fully floated.
