CBN MPC members Express Worry Over High Demand Pressure In Forex

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Some members of the Monetary Policy of the Central Bank of Nigeria have expressed concerns the high demand the nation’s foreign .

The MPC members voiced their concerns at the last MPC meeting their personal statements, which were obtained by our correspondent from the CBN Wednesday.

The Deputy Governor, Corporate Services Directorate, Mr Edward Adamu, said the demand the forex had remained elevated the face of declining accretion to external reserves and declining private inflow.

He said legitimate sources of foreign demand, speculation and frivolous demands had contributed to sustaining the naira rate.

According to him, the demand for foreign thrives naira liquidity.

“It is therefore pertinent to properly guide the flow of liquidity to those activities/sectors promote growth and employment using instruments can target productive activities, rather than those ease credit creation generally,” Adamu added.

The Deputy Governor, Economic Policy Directorate, CBN, Dr Kingsley Obiora, said the CBN had implemented various measures to ensure stability and alleviate the imbalance between forex supply and demand.

Obiora said, “In order to support the naira, we must also continue to build a Nigeria meets the needs of all citizens.

“Foreign school fees and medical expenditures account for a non-negligible share of FX purchases from the CBN’s foreign reserves.

“Rather than exerting pressure on the naira to provide for the needs of the privileged few, imagine a Nigeria where all citizens have access to high-quality schools and hospitals within the country.”

According to Obiora, it is catering for these fundamental needs and developing local production capacity will drive inclusive growth and a sustainably strong naira.

Another member, Prof. Adeola Adenikinju, stressed the need to diversify forex supply to the .

He said, “While measures to curb speculative, and even precautionary demand for foreign exchange is important, a more beneficial long term goal should be to expand the number of domestic projects and that generate more foreign exchange or that are import substituting.

“There are currently very limited investible options for domestic economic agents.”

He added that banks needed to create more products that would utilise the liquidity in the .