President Muhammadu Buhari has stated that the government had resolved to keep the Naira’s exchange rate steady while supporting the Central Bank of Nigeria’s decision to move away from the dollar peg, which is seen as overvaluing the Naira.
The president made this disclosure in a speech delivered on Sunday to mark his first anniversary in office.
“We resolved to keep the Naira steady as, in the past, devaluation had done dreadful harm to the Nigerian economy,” Buhari said.
“I supported the monetary authority’s decision to ensure alignment between monetary policy and fiscal policy,” he said. “We shall keep a close look on how the recent measures affect the Naira and the economy.”
“But we cannot get away from the fact that a strong currency is predicated on a strong economy,” he said, reiterating his opposition to a devaluation.
Buhari’s statement came barely days after the Naira fell to 350 to the Dollar on the parallel market, following announcement by the country’s Apex Bank that it would shift to a more flexible exchange rate policy to stop Africa’s biggest economy from sliding into recession.
On Friday, the local currency still remained stable at the parallel market, exchanging at N350 to the US Dollar.
The News Agency of Nigeria (NAN) reports that the Nigerian currency maintained same value since Wednesday.
However, the Naira weakened further against the Pound Sterling as it traded at N500 to the Pound, from N390 since Wednesday, while the Euro remained stable at N385.
In a related development, the Director-General, Debt Management Office, Dr. Abraham Nwankwo, has said the Naira and foreign exchange reserves will recover in the coming years as the impact of the Federal Government’s economy diversification plan begins to crystallise in the economy.
Speaking to a group of financial journalists in Lagos on Friday, Nwankwo said:
“You can see that in the manufacturing sector, some factories are operating below capacity. But with the ongoing implementation of President Muhammadu Buhari’s policy on diversification of the economy and revatilising the power infrastructure, the sector will pick up and create more jobs for the people.”
He continued: “In the next five to seven years, solid minerals will be exported. It is possible that in the next five to seven years, the whole picture of Nigeria will be a complete turnaround because of government’s economic diversification plan.
“The difference between Nigerian and other countries facing similar economic challenges is that those countries do not have the same opportunities we have in Nigeria.
“Nigeria is near 100 per cent idle capacity, meaning the flexibility to grow the economy is high.”