The CBN is considering halting sales of dollars to import goods that are already manufactured in the country as it seeks to reduce pressure on the local currency hit by a drop in oil prices.
“The only thing that will reduce pressure on our currency is by producing those things we are importing today,” Central Bank of Nigeria Governor Godwin Emefiele said at a conference on Tuesday in Lagos, the commercial capital. “We will try as much as possible not to hurt your business, but we need to be able to work together.”
Africa’s largest economy is struggling to deal with a decline in crude prices near the lowest in six years, sales of which bring in more than two-thirds of government revenue. The Abuja-based central bank devalued the naira in November and raised the benchmark interest rate to a record 13 percent.
The central bank that month also banned the use of dollars purchased at its twice-weekly auctions for the importation of items including electronics, telecommunication equipment and generators.
The regulator “will meet legitimate demand, but we will not be concerned about illegitimate demand,” Emefiele said. If the central bank allowed the naira to trade more freely then “it will lead to a major depreciation” as Nigeria is not yet an export-driven economy, he said.
The naira has slumped 16 percent against the dollar on the interbank market in the past six months, the most among 24 African countries tracked by Bloomberg. It traded at 192.45 at of 12:43 p.m. in Lagos, its lowest on record.
Emefiele reiterated that the central bank has no plans to further devalue the currency.
“We continue to take all measures to defend the currency at the current exchange rate,” he said in an interview with Bloomberg TV Africa.
via@Bloomberg