Basing Naira devaluation on parallel market rate wrong — Vanguard

Basing Naira devaluation on parallel market rate wrong — Vanguard

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By Emma Ujah

Basing Naira devaluation on parallel market rate wrong

Those using parallel market rate to put pressure on the Central Bank of Nigeria (CBN) to devalue the Naira won’t have their way.

The CBN Governor, Mr Godwin Emefiele gave this indication at the end of the last 2020 Monetary Policy Committee (MPC) meeting, in Abuja, yesterday.

He said “It is unfair that even analysts who should know are using parallel market rate to say that our currency is overvalued and therefore calling for devaluation. This is very unfortunate.

“The parallel market is a shallow market of only about five per cent of the foreign exchange market which is patronised by people who go there for cash to offer bribes and corruption. Parallel market is the place where people who don’t want to provide documents go.

“I don’t see why those who should know are asking for devaluation. We don’t agree that the determination of the foreign exchange should be based on a market that is tainted.   We will not use this as our benchmark to determine the value of our currency.

Basing Naira devaluation on parallel market rate wrong

“At the E& I (Import& Export) Window, the rate is about N386 or N387 / $1. We don’t control the I & E window.  Why will anyone use the parallel market to say that the exchange rate is over N480/$1?”

According to the governor, the Naira had already been devalued by about 28 per cent this year, just like many other currencies of the world.

COVID-19: N149bn to 317 beneficiaries

Governor Emefiele disclosed that about N149 billion had been given to 317 beneficiaries of the COVID-19 Fund, consisting of Targeted Households, as well as, Small and Medium Enterprises (SMEs).

He said that the organization was encouraged to increase funding beyond the initial N50 billion due to the positive impact it had on the Nigerian economy by boosting outputs and consumption.

READ: CBN Depreciates Naira To N410.25 In Investors And Exporters Window

According to him, another N92 billion was given to operators under the Agri-business/Small and Medium Enterprises Investment Scheme (AGSMEIS) and another N60 billion to healthcare sector players, in the battle to contain the COVID-19 pandemic and improve the nation’s health sector.

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