Ayodele Aminu With Agency Report
28 October 2009
Lagos — Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has said the apex bank aims to keep the naira exchange rate at "around N150" per dollar and avoid fluctuations of more than 3 per cent.
Also, he disclosed the banking reforms that led to the removal of eight bank chief executives, some executive directors and the injection of N620 billion into the banks, would be finalised up by the second quarter of next year.
Sanusi made these known to Bloomberg news in an interview in Cape Town, South Africa yesterday.
"We've more or less found a new equilibrium at about N150 and although the currency will fluctuate within a band, we'll try to avoid either excessive appreciation or depreciation. We don't have a long-term fixed rate in mind, but our focus is really on exchange-rate stability," he was quoted as saying.
The naira has lost more than a fifth of its value against the dollar since last November when the CBN allowed the currency depreciate rather than defend it with foreign reserves, following a slump in oil price.
Crude accounts for about 90 per cent of export revenue.
The naira closed at the inter-bank market yesterday in Lagos at N151.60 per dollar, while the exchange rate at the official market - also known as the Wholesale Dutch Auction System (WDAS) - was N149.14. At the black market, it traded at N154 per dollar.
The CBN governor said pressure on the naira to weaken subsided after oil prices rose 77 per cent this year and production recovered to "almost" 2 million barrels per day after militant attacks in the oil-rich Niger Delta eased.
"We see no fundamental reason for the exchange rate to move significantly," said Sanusi.
Oil traded at $78.64 a barrel in New York yesterday, 47 per cent below the record $147.27 a barrel in July last year. Nigeria and Angola are Africa's biggest crude exporter, data from the Organi-sation of Petroleum Exporting Countries (OPEC) how.
The CBN governor said Nigeria's $44 billion in currency reserves are enough to finance 20 months of imports. But foreign reserves have dropped almost 17 per cent from $53 billion at the end of December.
"We are more than able to supply the market with foreign exchange," he stated.
The CBN aims to auction an average of $2 billion per month to the country's banks and foreign-currency bureau, he added.
That may be adjusted in the event of speculative attacks on the naira, he explained. "We want to avoid volatility," said Sanusi.
The CBN expects the economy to expand 5 per cent this year, he stated, adding that the apex bank expects to see an "upswing" next year. However, Sanusi did not give a growth forecast for 2010.
On the banking reforms, Sanusi said: "It is 'ongoing' and policy makers expect to finalise most of the process by the second quarter of next year."
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