Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, has said that the naira is “appropriately priced”, adding that the central bank does not plan any adjustments in the currency for now.

 Speaking at a conference hosted by Financial Times in London, Reuters quoted Emefiele as stating that restrictions put in place in June to conserve foreign exchange reserves and support the naira were working.

The CBN had restricted funding for 41 items in its official forex market in a bid to encourage local production and to conserve the nation's forex reserves.

However, Emefiele was quoted by Bloomberg to have said the central bank would consider easing the restrictions on currency trading if demand for foreign exchange drops further.

The controls are necessary to limit demand for dollars, Emefiele told the delegates at the conference on Africa held monday.

The central bank had little choice in imposing the curbs in order to preserve foreign-currency reserves, he said.

The naira weakened slightly on the Lagos interbank market to N197 per dollar yesterday, from N196.95 it was last week. The present value of the naira was the seventh adjustment since the regulator introduced tight currency controls in February, Reuters stated.
But the CBN did not provide any reason for the adjustment, which traders said was made through a message.

The naira traded weaker on the parallel market at N223. Forward markets, used for betting on future exchange rate swings, priced it to drop another 20 per cent over the coming year.

Emefiele said Nigeria should focus on diversifying its economy and needed to manage what little hard currency reserves it had.
“At this time … the currency is appropriately priced,” Emefiele said.

“People are asking me whether I am ready or not for an adjustment, and I tell them: At this time, no adjustment,” he said.
He added that he was looking at various options but gave no details.

Since June, purchasers of foreign currency bonds and importers of 41 kinds of items, from toothpicks to private jets, have been restricted from purchasing dollars on interbank markets.

Vice-President Yemi Osinbajo at the weekend said the country would keep restrictions on foreign currency for the time being to preserve reserves but promised to relax them eventually.

The restrictions were effective, Emefiele said, adding: “It is working and people should have patience with us.”

“Once we have achieved a result we can allow ourselves to look at a freer market,” Bloomberg further quoted the CBN governor as stating.

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 (MPC).

The restrictions have reduced liquidity, prompting JPMorgan Chase & Co. to remove the nation’s bonds from its emerging-market bond indexes last month.

Emefiele said: “Demand for foreign exchange has dropped.”