Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria, CBN, Monday, predicted that the nation’s foreign reserves would soon hit $50 billion mark.
Emefiele speaking at the 25th CBN seminar for Finance Correspondents and Business Editors in Uyo, Akwa Ibom State said the reserves have currently risen to $47.4 billion as at April 5.
Represented by Mr. Edward Adamu, the Deputy Governor, Corporate Services, Emefiele said that policies of the CBN in recent times helped the country to navigate its way out of economic recession, warning that the nation must remain vigilant and build on the post-recession gains in order not to relapse back into another cycle of recession.
He said “Foreign exchange supply has improved since the establishment of the Investors and Exporters (I&E) window, with autonomous inflows of more than $20 billion through this window alone from April 2017 to date.
“Foreign exchange reserves have recovered significantly from a low of just more than $23 billion in October 2016 to about $47.37 billion as of April 5, 2018;
“Foreign exchange reserves will continue to grow. Following recent accretion, FX Reserves may be about $50 billion sometime later this year.”
Emefiele noted that in spite of the reduction in import bills, a lot remained to be done in the agriculture and manufacturing sectors.
“For one, our import bill may have fallen but our manufacturing and agriculture sectors still have a long way to go, if we must attain self-sufficiency in those sectors.
“We must not be quick to discard the restrictive measures which aided our recovery simply because the metrics have improved,” he said.
The governor assured that the CBN would continue to fine-tune its policies and strategies based on our understanding of evolving developments and supported by in-house technical analysis and simulations.
Emefiele said, “We will remain proactive in ensuring that the welfare of Nigerians is optimised at any point in time.
“In Monetary and Exchange Rate Policy, we have signalled from the last Monetary Policy Committee, MPC, that we will sustain the tight policies that have helped rein-in inflationary pressures. That is the reason we kept the Monetary Policy Rate, MPR, at 14 percent.
“We will also continue the transparency and even-handedness that have attracted inflows of FX into the country while keeping FX supply to the market adequate.
“As we entrench and sustain the transparency in the FX market, as FX reserves accretion continues, and market confidence and improved sentiments remain, we expect that the exchange rate will not only be stable but would begin to appreciate against major currencies.
“The adverse competitiveness outcome which such appreciation may entail would be adequately mitigated by proactive policies to ensure that our balance of payments position is not undermined.”
The CBN boss called for a re-doubling of strong policy coordination, collaboration and cooperation which flourished during the very difficult times.
He said: “To sustain our recovery, the need is greater now than ever for a robust policy coordination between the key aspects of economic policy making space.
“This would include fiscal, monetary, exchange, and trade policies, which must be targeted at protecting farmers to boost agricultural outputs, support local companies and enhance manufacturing and industrial capacities, with a view to diversifying the economy away from oil and fossil fuels.”
