Nigeria said it will continue to keep faith with the managed float system currently in operation in the nation’s foreign exchange management as against the advice of the International Monetary Fund (IMF) to allow the currency to free float.

Godwin Emefiele, governor, Central Bank of Nigeria (CBN), disclosed this on Thursday on the sidelines of the spring meetings of the 2022 International Monetary Fund (IMF) currently holding in Washington DC, United States.

While acknowledging the roles of the IMF and World Bank in advising economies around the world, Emefiele stressed that the nation would never adopt the free float of Nigeria’s currency.

He maintained that developing economies had the liberty of adopting homegrown solutions to their economic problems. He said, “Nigeria’s situation is very peculiar and that is the reason we continued to engage the IMF to show understanding in Nigeria’s problems. They are indeed showing understanding”.

Emefiele maintained that the CBN was more concerned about reducing the high demand for foreign exchange based on advice from international bodies.

He listed the many ways the CBN had worked in reducing demand for dollars, which included the stoppage of forex for the importation of rice and maize, and support for the development of the Dangote refinery, which is expected would reduce demand for foreign exchange for imported petroleum products when it comes on stream.

“On the issue of 43 items and the exchange rate, what they are saying is that they want us to free the exchange rate and you know that this has impact on the exchange rate itself in the sense that when you allow that to happen you will have uncontrollable spiral in the exchange rate of the country and what we are trying to do is to make sure we run a managed float.

There must be some intervention facilities put in place to continue to control the way exchange rate spiralled.

“We say that as long as the demand of exchange rate exceeds the supply we will continue to have this situation but we will continue to do everything to ensure we deepen the economy and restructure the face of the economy.

“With the reduction of forex for rice or maize, demand will drop. As it drops, we can adjust the exchange rate.

“Some of the demand policies we have put in place which they did but like. I believe they will raise some of these issues but on our part we make them understand Nigeria’s peculiar situations and look at how we will continue to work together to see to the progress of the Nigerian economy”.

On support from the IMF, Emefiele said the fund has been responsive to Nigeria’s needs. He said, “The IMF in 2020 made available the RFI to all the countries that are affected by the pandemic and Nigeria benefitted to the tune of about $3.4 billion.

In 2021, realising that the pandemic was still on, we also received additional support from the IMF through the Special Drawing Rights (SDR), Nigeria received over $3 billion again.

“What I can say is that we will continue to receive support and at various meetings at the IMF, the resolutions have always been that countries, ministers and governors should go back to their countries and think of homegrown solutions”, he said. (Daily Independent)

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