Buhari Calls JP Morgan’s Bluff, Says No To Naira Devaluation
President Muhammadu Buhari has ruled out possible devaluation of the naira in the near term, putting paid to speculations of an imminent relaxation of the current foreign exchange rule by the Central Bank of Nigeria (CBN).
JP Morgan has based its suspension on the fact that the CBN adopted currency measures that were making transactions too complicated. JP Morgan was particularly irked that the CBN refused to officially sell dollars to importers of items like toothpick and other products readily available in Nigeria.
Buhari said on Tuesday in an interview with France 24 that he does not think the country’s currency, the naira, should be devalued again.
“I don’t think it is healthy for us to have the naira devalued further. That’s why we are getting the central bank to make modifications in terms of making foreign exchange available to essential services, industries, spare parts, essential raw materials and so on — but things like toothpicks and rice, Nigeria can produce enough of those,” Buhari said.
Nigeria’s central bank has imposed progressively tighter restrictions on access to foreign exchange in an effort to prop up the naira, which has been sliding since the slump in global crude prices last year. In June, it restricted access to foreign exchange for the import of 41 items ranging from rice and toothpicks to steel products and glass.
The central bank had introduced series of measures including directing commercial banks to pay for their dollar purchases 48 hours in advance, banned them from accepting foreign currency cash deposits and excluding about 41 items from access to official foreign exchange market in a bid curb dollar demand, stem illicit financial flows and conserve its foreign exchange reserves.