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Why Nigeria’s Apex Bank Cannot Float Exchange Rate

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The Governor of Nigeria’s apex bank, the Central Bank of Nigeria (CBN), Godwin Emefiele has said that the bank cannot operate or float an exchange rate system.

Gov. Emefiele was reacting to a call by the President of the World Bank Group, David Malpass, to the CBN to drop its multiple exchange rate system for a single exchange rate policy, at the ongoing IMF/World Bank Spring Meetings in Washington DC, United States of America.

Emefiele said, “Both the IMF and World Bank are our prime development banks, and we have received support from them at different times in resolving some of our economic challenges particularly bordering of finance.

“Yes, they want us to freely float the exchange rate and you do know that this will have some impact on the exchange rate itself in the sense that when you allow that to happen, you will have an uncontrollable spiral in the country’s exchange rate.”

He explained that high demand for forex on some goods have impacted on the exchange rate which informed the federal government’s decision to restrict access to forex for the importation of wheat and rice.

Emefiele, however, said, “We are doing everything possible to restructure the base of the economy through some of the policies that we have put in place to deepen the production of goods in Nigeria.”

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