‘CBN spent $1.3bn to defend naira in two months’
A member of the Monetary Policy Committee of the Central Bank of Nigeria has said the CBN spent over $1.3bn to defend the country’s currency in January and February.
Prof. Adeola Adenikinju disclosed this in its personal statements at the MPC meeting held in March, according to the communique released by the CBN on Tuesday.
He noted that the naira exchange rate depreciated across the various windows, saying the external reserves declined from $36.6 billion in Dec. 2020 to $34.46 billion in Feb. 2021.
He said, “The CBN has spent over $1.3 billion to defend the naira between January and February 2021. It is early in the day to know the extent to which the new policy of CBN to boost remittances will impact on pressures in the foreign exchange market.
“Capital imports, though have picked up in recent months is still far below the level it was in January 2020.”
According to Adenikinju, there are several headwinds to the Nigerian economy from the global economy: the rise in commodity prices implies rising imported inflation to Nigeria.
He said, “The rising oil prices occur amidst declining output in compliance with OPEC agreements. It also means high costs of financing imports of refined products to Nigeria.
“In addition, the problems associated with vaccines distribution, vaccines hesitancy and spread of new variants of the virus will impact on the pace of global economy recovery. The uncertainty about COVID-19 pandemic will affect global capital flows in 2021.”
