Details of a new foreign exchange policy in Nigeria should be expected in a few days. The policy, according to the Central Bank of Nigeria governor, Mr Godwin Emefiele, would ensure flexibility in forex management.
The CBN boss, who spoke at the end of the Monetary Policy Committee meeting in Abuja on Tuesday, said the new policy would lead to more availability of forex for businesses in order to boost the Nigerian economy.
There have been speculations in recent weeks that the Muhammadu Buhari government had yielded to pressure to further devalue the naira. Currently, N198 exchanges with $1 at the official market but, at the black market, it is about N350 for $1.
Devaluation outright may not be announced. However, the monetary authorities may open another window for forex seekers, especially those importing essential items like agric machinery. The CBN governor said, ““After assessing the various risk profiles available, the committee resolved to adopt the least risky option by adopting a flexible foreign exchange policy to restore the automatic adjustment properties of the exchange rate.”
Mr Emefiele hinted that the Nigerian economy might go into recession if the right steps are not taken. The National Bureau of Statistics recently released figures showing that the economy contracted by 0.36 per cent in the first quarter of 2016. A repeat performance in the second quarter would signify a recession, according to some economists.
Many believe, however, that the economy is already in a recession. Unprecedented unemployment rate, hyper-inflation and stagnancy in business activities have been noticeable for three consecutive quarters now.