Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), says he remains confident that the economy will be out of recession by the end of the third quarter of 2017.
Emefiele said in Abuja on Tuesday, the CBN will not dictate where the much-needed foreign exchange convergence will be, but hopes the rate will head southwards rather than on the high side.
“My view is that with all the positive signs we see: inflation tending downwards, GDP improving to the extent that negative growth rate has decelerated quite significantly, in fact we have seen foreign exchange going to the real sector and industrial capacities are beginning to improve,” Emefiele said.
“We’ve seen positive signs in various economic sectors, I am very confident that at the end of the third quarter, we will be out of this (recession), and I still hold that position.
“We would prefer a convergence that will significantly be going southwards, than a convergence that will go northwards. The fact that we have seen a convergence in the southward direction gives us a lot of hope that things are working in the right direction.”
Emefiele said he, as a person, wants low interest rates for the economy, but the economic aggregates available to the MPC does not allow for such at this time in Nigeria’s economic life.
“Even I, want a low interest rate but the economic aggregates that we see today, unfortunately, does not give room for us to begin to look at that direction of signalling a downward interest rate.
“You would have read World Bank and IMF reports,and what they have both insisted is that we should tighten further.
“But rather than tightening, what the monetary policy committee has decided to do is to hold and watch, given that we had embarked on a consistent policy tightening before we decided to adopt the hold strategy.”
The governor said the bank remains resolute on sustaining its current foreign exchange policy in the interest of the Nigerian economy.
“I have said it and I will repeat myself that the interventions will be more vigorous and intense, to underscore the fact that we are determined to ensure that the Nigerian economy recovers, by making sure that foreign exchange is being made available to all sectors of the Nigerian economy to conduct their businesses.”
Emefiele said in four weeks, about $1.1 billion has come into the Nigerian economy via the exporters forex window created about a month ago.
He said all these are signs that the policies of the bank were the right ones, bolstering the capital market and driving liquidity.