IMF Reacts To Floating Of Naira By CBN, Promises To Support Nigeria

The International Monetary Fund (IMF) is excited with the new Central Bank of Nigeria policy to unify the different foreign exchange windows and allow banks sell forex at market rate.

The lender is now willing to support Nigeria in its fight to forge a new path for economic prosperity.

The IMF said, “The Fund greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in line with our long-standing recommendations.

“We stand ready to support the new administration in its implementation of FX reforms.”

For more than four years under President Muhammadu Buhari, the IMF had advised Nigeria to scrap the different FX windows and allow the country’s currency to float.

The IMF used it as a prerequisite for Africa’s biggest economy to access its loan.

The suspended CBN Governor, Godwin Emefiele had kicked against the advise citing its impact on the naira and as well as on the consumer price index which measures inflation.

But Just 15 days after the new administration came on board, CBN told banks they can buy forex from any source at any rate and sell at any rate subject to a maximum of N1 bid-ask spread between the buy and sell rate.

The CBN however restricted the sales of the forex to eligible transactions.

“The benefit of having a unified exchange rate is that it will save the money that the government is losing by giving access to forex to some people below market rate. It is a subsidy and the subsidy regime should end.

“If there is a single rate market, government will get more revenue, because they can sell all the forex at their disposal at the market rate,” Ayo Teriba, the Chief Executive Officer of Economic Associates in an interview with THE WHISTLER.

Nigeria owed the IMF, $3.27bn as of December 2022, according to the Debt Management Office.