Godwin Emefiele, the Governor of the Central Bank of Nigeria has once gain defended his decision not to further devalue the naira, the Nigerian local currency despite pressure to do so from many quarters.
There’s a lot of pressure from foreign investors and Nigerian manufacturers for a further devaluation of the Naira. They say Emefiele’s policies are worsening the oil-dependent country’s economic woes.
The governor, speaking on Monday, maintained that the naira was ‘appropriately priced,’ telling the Financial Times Africa Summit he would not allow a policy of ‘interminable adjustment’ as this would only cause more pain for Nigeria’s 170 million people. The naira lost more than 20 per cent of its value between the start of the oil price fall in July 2014 and February, the last time the Central Bank allowed the currency to depreciate.
Since then, Emefiele has introduced a range of currency controls — doing everything but adjusting the currency to defend its value. The result has been an effective freezing of the country’s foreign exchange market. The lack of liquidity — the ability to move hard currency in and out of the country — was one reason JP Morgan removed Nigeria from its influential emerging markets bond index last month.
