Rise In Oil Revenue Helped Us Defend Naira, Says CBN Gov

Rise In Oil Revenue Helped Us Defend Naira, Says CBN Gov

Godwin Emefiele, Central Bank of Nigeria (CBN) Governor, says the recent rise in oil revenues has helped it defend the Naira and stabilise the parallel market foreign exchange rate.

Nigeria has suffered from dollar shortages as a slump in oil revenues hammered the Naira and dried up supplies of the greenback on official channels, forcing traders to pay a premium on the parallel market.

“The market is stabilising at the level that it is right now and I am saying the parallel market (is) currently stabilising at between 380 and N385 (a dollar),” Emefiele said after meeting President Muhammadu Buhari on Thursday, according to Reuters.

The Naira was quoted on Thursday at an investor trading window at N382.14/$, data from market regulator FMDQ OTC Securities Exchange showed. The official market rate was 305.20 and the black market rate 391.

“Revenues are looking good, the state of the economy is good and I believe that we are going to pull out of the problem in due course,” Emefiele said, talking about the foreign exchange rate.

The central bank earlier lifted a ban on currency allocation for importers bringing in goods worth up to $20,000 per quarter, according to a circular seen by Reuters on Thursday.

The bank in 2015 placed a restriction on 41 items for which importers could no longer get dollars, including rice, toothpicks, cement, private jets, steel products, plastics and rubber, soap, cosmetics, furniture, Indian incense and foreign bonds.

Nigeria introduced capital controls in 2015 after a sharp fall in oil prices caused chronic dollar shortages, weakened its currency and slashed government revenues, tipping the economy into its first recession in a quarter of a century last year.

It subsequently introduced and then abandoned a currency peg and now uses a system of multiple exchange rates which the bank says help it manage “frivolous” dollar demand.