CBN considers easing forex controls if demand drops further

06 Oct 2015
Financial Nigeria

Summary

Emefiele told Bloomberg: "I think it [capital control] is working and I think you should be patient with us."

Governor of Central Bank of Nigeria, Mr. Godwin Emefiele

Central Bank of Nigeria (CBN) Governor, Godwin Emefiele said he will consider easing restrictions on the naira if demand for foreign exchange drops further.

The controls are necessary and are working to limit demand for dollars, Emefiele told delegates at a conference on Africa hosted by the Financial Times in London on Monday.

The central bank had little choice in imposing the curbs in order to preserve foreign-currency reserves, he said. "Once we have achieved a result we can allow ourselves to look at a freer market," the governor said.

Emefiele imposed restrictions on trading and introduced bans on purchases of dollars by certain importers after the naira plunged to a record low in February following a drop in oil revenue.

With the backing of President Muhammadu Buhari, Emefiele has resisted calls to ease the controls and devalue the naira despite criticism from investors, businesses and fellow members of the Monetary Policy Committee. The restrictions have reduced liquidity, prompting JPMorgan Chase & Co. to remove the nation's bonds from its emerging-market bond indexes last month.

"I think it's working and I think you should be patient with us," Emefiele told Bloomberg.


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