Governor of the Central Bank of Nigeria, Godwin Emefiele, has revealed that the apex bank declined another round of Naira devaluation because it wouldn’t have had a direct impact on the country’s economy.
“The simple idea behind devaluation is that it will make your import more expensive while your export is cheaper,” he said at the All Civil Society Economic Workshop held recently in the country.
Emefiele was represented by the Director of Financial Market, Mr. Emmanuel Ikeji.
“Our major export commodity which accounts for more than 80% of our income is crude oil and here is crude oil that the price is determined, we don’t have a control over it. So, if we devalue, it has no impact directly on our major export, and what is supposed to be the non oil export, we are not producing effectively.
“It means that for the industry which is also import dependent, they have to pay higher prices for those goods which will translate to higher inflation.”
Explaining what transpired between Nigeria and JR Morgan, Emefiele said; “What JP Morgan wanted us to do was to allow the exchange rate to be determined by market forces.
“For us as economists, it was going to be a little bit unpleasant, because we noticed what was happening in the market when trading was not actually placed on real effective demands.”