CBN to Adopt ‘Flexible’ Exchange Rate

The Central Bank of Nigeria (CBN) has today disclosed that the Nigerian economy is on the edge of a recession.

The Bank also said it was going to adopt a more “flexible” exchange rate. While speaking on the state of the economy, Godwin Emefiele, the central bank governor said:

“The conditions that led to the contractions in the first quarter of 2016 were still largely unresolved. The recession which was signalled in July 2015, now appears imminent.”

The CBN Governor who spoke on behalf of the Monetary Policy Committee, said it has decided to introduce a flexible exchange rate system, but fell short of calling it a devaluation.

The MPC stated the flexible exchange rate system will allow for inflow of foreign exchange needed for investment, The Cable is reporting.

“The committee noted that it was time to introduce greater flexibility in the foreign exchange market. The committee re-affirmed commitment towards maintenance of price regulation,” Emefiele said.

“The committee said in the period of stagflation, the options are very limited, the committee decided on the least risky option. The MPC voted unanimously to adopt a flexible exchange rate policy.”