Francis Ugwoke
23 October 2008
Enugu — Central Bank of Nigeria (CBN) yesterday gave reasons why the nation's currency, Naira, has appreciated against some foreign currencies, explaining that this was as a result of the appreciable increase in the nation's foreign reserve which stands at $63 billion.
Deputy Governor of CBN, Operations, Alhaji Suleiman Barau, who spoke at the bank's 2008 Branch Controllers' Conference held in Enugu said that the bank deliberately put necessary measures in place to ensure that the current inflation rate of about 11 percent would not reach an alarming proportion.
Barau who represented the CBN Governor, Prof Charles Soludo, at the workshop explained that the apex bank has always taken proactive measures to ensure that the country has as much foreign reserve as possible for the purpose of defending the international value of the nation's currency, adding that this led to the positive perception of Naira.
According to him, "Our contribution to foreign reserve has been substantial. Our current external reserve is N63 billion and when you have that kind of reserve, what it means is that the perception of the strength of your currency is positive meaning that you have the capacity to defend the international value of your local currency. That is the first reason why the Naira has appreciated.
"But as far as the issue of parallel market is concerned, CBN did take very proactive measures to ensure that we have much foreign reserve as possible and we did that to ensure that we have enough reserve to defend the international value of the Naira. Today, the Naira has earned respect in the international market and we intend to sustain this.", he added.
On the rise of inflation, Barau explained that though it has been high, with 12 percent recently, the apex bank has embarked on measures to address the disturbing trend, which according to him was as a result of the global financial crisis.
He said: "The rate of inflation has been hitting up, it has gone to 12 percent recently and it is coming down to 11 percent while we hope that it will come to a single digit soon. But don't forget that what is happening in the global arena today is a tendency towards a recession.
"Because the CBN has been proactive in so many ways, what we are trying to do is to inject as much liquidity as possible so that we can stimulate the activities in our capital market. That will have positive impact in the objective of trying to manage the economy but as far as managing inflation is concerned; we have been doing very well. It has been one digit until recently when we changed our strategy in response to the financial crisis."
Barau said that the branch controllers' conference was a yearly event to enhance the skills and capacity of the staff towards efficient performance in the apex ban.
He added: "CBN is a learning organisation and as such we seek to improve the stake and professional qualities of our staff and we do that in various ways, departmental seminars, workshops etc. And the idea of Branch seminar is actually in line with our desire to improve the skills of our staff,".
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