By Michael Igiri James
Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has assured Nigerians that the country would get out of economic recession latest by the end of June 2017 based on emerging positive economic indicators.
Mr Emefiele, who gave the assurance while fielding questions from journalists after a closed door meeting with the leadership of the Senate at the National Assembly, said one of the indicators is the downward trend in the parallel market as regards the value of Naira against the dollar which has appreciated from as higher as N525 per dollar to between N370 to N380 now.
According to him, other indicators include the already confirmed reduction in the rate of inflation by the National Bureau of Statistics (NBS)- aside the country’s foreign reserves that has also risen from over $27billion at the beginning of the recession in June last year to over $31billion now.
“Central Bank has been involved in some form of intensive interventions in the foreign exchange market and this has fortunately resulted in a downward trend in the parallel market price of foreign exchange from as higher as N525 to as low as N370. Right now it hovers between N370 to N380.
“I think it’s an opportunity for me to say that we are going to continue this intervention because the reserve looks very good as I speak to you our reserve stands at above $31 billion and that provides us enough of fire power or ammunition to be able to defend the currency and we will do so with all intensity to ensure that foreign exchange is procured by everybody.
“We have started to see a downward trend even in prices of goods and commodities and you have also must observe that inflation is also trending downward as confirmed by NBS. We are very much optimistic that by the end of the second quarter very latest third quarter this year, we should be out of recession that we are in right now,” he said.
He assured that the downward trend in the parallel market in favour of the Naira would be sustained by the CBN through its needed interventions and in particular, through the policy of a free market economy that guarantees freedom for both buyers and sellers.
“I think what is important is that last week we brought out an announcement which is meant to encourage our foreign investor community to get involved as well in the foreign exchange market.
“It is the market or window that is opened for them to inflow their foreign exchange and come into the market on what we called a willing buyer, willing seller basis in which case there will be no form of any price intervention by anybody and indeed even including the Central Bank.
“Indeed with the kind of firepower that we have, we are also going to play in that market to ensure that as the prices move on based on the managed float regime that we run that we should be able to control the price based on willing buyer and willing seller basis,” he explained.