The Senate on Wednesday summoned the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso to appear before it on Tuesday next week on the state of the economy and the free fall of the Naira at the forex market.
The chamber sent the invite through its committee on Banking, Insurance and other Financial Institutions chaired by Senator Adetokunbo Abiru (APC Lagos East).
Nigeria’s naira plunged to N1,520 to a US dollar on Wednesday, a record against the dollar following a revision of the methodology used to set the exchange rate, marking the second devaluation of the currency in seven months.
The local unit depreciated 31 per cent to N1,413 to a dollar on Monday in the so-called NAFEX fixing, the official foreign exchange window, according to data published by FMDQ, which calculates the exchange rate for the West African nation. The move came after the Central Bank of Nigeria accused traders of manipulating the exchange rate by under-reporting transaction rates.
That brings the naira closer to its parallel-market rate of N1,468 and follows a devaluation of almost 30 per cent in June as the CBN liberalized the currency regime in an attempt to attract inflows and improve liquidity. The level in the parallel market represents a 1.2 per cent decline on the day amid ongoing dollar scarcity, said Abubakar Mohammed, chief executive for Forward Marketing Bureau de Change Ltd., which compiles the data.
Senator Abiru who lamented the state of the economy especially the inflation index after a closed-door meeting with his members, said it was of great concern to all.
“We have held a meeting this afternoon essentially to focus on the direction of the Nigerian economy.
“We are all living witnesses to what is going on. Underlining the major issue of the economy is the way the inflation index has been and of course, it is a major concern to us.
“We have deliberated among ourselves. Critical issues were addressed and we believe that the next line of action is to summon the governor of the Central Bank on Tuesday at 3 O’clock to brief us properly on the state of the economy.
” That we have resolved and will communicate to the governor of the Central Bank after which we will have further communication with members of the press’.
Nigeria has battled volatility in the exchange rate since the foreign currency reforms in June. The central bank has blamed inadequate dollar liquidity for exacerbating price swings and promised to boost supply to clear a backlog of foreign exchange demand.
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