Finance Minister Ahmed hopeful of Unified Exchange Rate

17 Aug Finance Minister Ahmed hopeful of Unified Exchange Rate

The Minister of Finance and National Planning, Zainab Ahmed, says the latest policy by the Central Bank of Nigeria (CBN) is pushing the naira towards a unified exchange rate.

She spoke at the interactive session on the Medium Term Expenditure Framework (MTEF), organised by the House of Representatives Committee on Finance in Abuja,

She, however, admitted that foreign investors are still avoiding the capital market due to the policies.

The policy effectively devalued the currency by 7.6 per cent. The rate had moved from between N379 and N410 to a dollar.

“We have not seen the return of foreign investors to the Nigerian capital market. The situation is further compounded by the devaluation of naira by the Central Bank of Nigeria.

Speaking on the volatile nature of the naira, the CBN’s Deputy Governor, Corporate Service Department, Edward Adamu, said the outbreak of the COVID-19 and slow recovery of the oil sector are the main factors responsible for the state of the naira.

Mr Adamu said Nigerians in the diaspora have been unable to return to the rate of remittances at the pre-COVID-19 era.

“Crude oil sale has not been as high as we all want it to be and obviously in the aftermath of COVID-19, the global economy grounded to a halt and the use of crude oil also was a halt.

“To the extent that sometimes in April last year, we had crude oil selling at a negative money which means that, people were being paid to store what they bought and so that avenue for forex inflows was significantly reduced.

“You go on to foreign portfolio inflows, you notice that investors also settle their affairs on the side of caution and so once COVID-19 outbreak occurred, they moved out about 120 billion dollars from emerging market to the safe haven in America and Nigeria is one of those countries the monies were withdrawn from.

“On the remittances side, once our brothers and sisters abroad were not working because of the situation they found themselves; they had very little to send to us here and so we also saw remittances reduced.