CBN Gives Clarification on NNPC’s Right to Buy Dollar From FX Market
- Yemi Cardoso, governor of the CBN, has declared that the NNPC Limited is permitted to buy dollars in the foreign currency market
- According to the CBN governor, it is fully up to the organisation to decide whether to purchase dollars on the open market or elsewhere
- He noted that the government has asked businesses and manufacturers to submit their bills in naira instead of dollars
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Yemi Cardoso, governor of the Central Bank of Nigeria (CBN), has said the NNPC Limited is free to purchase dollars from the foreign exchange market without any restrictions, just like any other customer.
Source: Getty Images
The CBN chief spoke to global investors about Nigeria's deregulation recently, during the ongoing World Bank/International Monetary Fund (IMF) annual meeting in Washington, DC,
He said this while responding to inquiries about the authority plan's function in the alleged FX takeover by NNPCL to satisfy its unpaid debts and guarantee that its involvement wouldn't result in appreciable volatility.
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Cardoso informed the attendees that the CBN merely serves as NNPCL's banker and that it is fully up to the organisation to decide whether to purchase dollars on the open market or elsewhere.
The regulator stated that the demand for local debt instruments and a brighter outlook will lead to greater interest in the local currency, the Guardian report.
Brighter outlook
The regulator stated that the demand for local debt instruments and a brighter outlook would lead to greater interest in the local currency.
Even though the government has committed to a revenue-to-output ratio of 23 to 25%, Nigeria will continue to prioritise the mobilisation of local resources, according to Wale Edun, the country's finance minister and coordinating minister of the economy.
According to Edun, as part of its proactive efforts to lower the demand for dollars, the government has requested that companies and manufacturers invoices in naira rather than dollars.
“We are asking people to invoice in naira, rather than dollar, thereby reducing the demand for dollars. We have moved to free market pricing in petrol, jet fuel, kerosene and that is the first time in 40 years that we are doing that,” he said.
The minister also denied the suggestion that President Bola Tinubu's administration adopts the economic philosophies of the World Bank and IMF and blindly follows their advice, claiming that he and his colleague bear full responsibility for the government's choice.
IMF predicts Naira stability
Legit.ng reported that the Central Bank of Nigeria's efforts to clear foreign exchange backlogs and recent interest rate hikes are credited with stabilising the naira.
According to the fund, the CBN's efforts to pay down past-due foreign exchange loans have been essential to maintaining the stability of the currency.
Furthermore, foreign exchange turnover dropped precipitously from Tuesday's $176.15 million to Wednesday's $136.68 million, a 22.41% decrease.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
