Floating the Naira- CBN Resists IMF

The Central Bank of Nigeria has resisted calls from the International Monetary Fund (IMF) to float the naira, suggesting that the CBN was action the best interests of Nigerians.

Speaking with the media at the World Bank/International Monetary Fund spring meetings in Washington DC, United States, the CBN spokesperson, Mr. Isaac Okorafor, said “The call here in Washington that we should float the naira, liberalise the market – our market is extensively liberalised – and the call to float the naira is a bit laughable in our case.

“Yesterday (Thursday), when Madame Lagarde was discussing the economy of Egypt, she lamented herself the devastating inflation that is in that country.

“Egypt has half of our population; Egypt receives about $12bn in foreign earnings and several billions in tourism. We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to the benefit of the people from massive depreciation (of the naira).

“If you float the naira today, and given the discoveries by security agencies, you’ll discover that our case will be terrible. Egypt today has an inflation rate of almost 31 per cent; remember that Angola also has about 36 per cent inflation; ours is at 17.26 per cent.

“If we float the naira and we allow speculators and those with corruption money and all the people who create the bubbles to launch into the market, you can yourself imagine the kind of situation we will find ourselves in.

“Yes, we will go all out to practise economic theory the way they say you should allow your currency to float, but of course, you should also know that no country floats its currency, just leaving it to the dictates of the market.

“Our economy has its own peculiarities and we cannot kill our people in the name of floating the naira.”