IgbereTV has uncovered a 2019 Bloomberg report in which the former governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, cautioned that allowing the naira to float would result in a significant decline in its value.
Titled, “Free Float Would Send Naira Tumbling,” Emefiele had argued at the time that the country’s system of multiple exchange rates had produced the “most optimal results when compared with other emerging markets in recent times”.
Under Emefiele, who was appointed in 2014, Nigeria had tightened capital controls and closely managed naira’s value.
The then CBN governor had consistently said it was the best way to curb inflation and boost manufacturing by discouraging imports, even though several foreign investors had faulted the policy and said it exacerbated an economic downturn.
“We will get even more aggressive,” he had said. “This is because we think the initiative the central bank has to cut imports and diversify the economy is yielding results.”
The report said shortages of foreign exchange had eased at the time due to higher crude prices and CBN’s opening of a currency-trading window for portfolio investors that allowed them to buy the naira at a weaker level.
The rate in that window had almost converged with the black-market rate of around N360 to the dollar at the time. The naira is currently valued at over N900 to the dollar at the official market and N1,400 to the dollar at the parallel market.
