Discordant tunes trail policy

The Central Bank of Nigeria (CBN) said the devaluation of the country’s currency was the best option to ensure that the economy sustains it activities.

Besides, the apex bank noted that a lot of things were working against the strength of the currency, especially the huge loss recorded in the ongoing cycle of falling oil prices.
CBN Deputy Governor, Adebayo Adelabu, who made the disclosure during the House of Representatives Committee on Banking and Currency oversight visit, in Lagos, yesterday, said that the kind of defense required to keep the naira afloat was no longer sustainable.
“The pressure on the naira is from frivolous demand on foreign exchange and if we don’t devalue the currency now, it will continue to de­preciate,” he said. He assured that CBN was committed to ensuring single digit inflation and interest rates, noting that the institution was contribut­ing to achieve the target as it embarked on the completion of 105 intervention and in-house projects.
Meanwhile, Chairman of the House Committee, Chukwudi Jones Onyereri, has raised concern that some interventions of CBN may constitute a distraction, while advising that the apex bank face projects that will direct­ly impact on the lives of the people.
He said that part of the country’s challenge was mis­placed priorities and policy directives that do not take into consideration several domestic factors.
Onyereri pointed out that the increase in the Monetary Policy Rate (MPR) should have been preceded by con­siderations of attendant hike in interest rates by banks, adding that the development would further suffocate bud­ding businesses. According to him, the increment from 12 per cent to 13 per cent would be responded to by financial institutions in a fierce manner such that inter­est rates would become more expensive, while urging CBN to think about placing a cap on rates.
Meanwhile, Prof. Pat Utomi, who spoke to Daily Sun in an exclusive inter­view, decried that with the devaluation of naira, the na­tion would experience eco­nomic instability, especially as it would increase prices of imported goods.
“Whenever there is a de­valuation, imported goods would be expensive but if we are producing enough it wouldn’t have mattered but unfortunately Nigeria is not focused on production.
“This economy has been a rent economy that has not encouraged real production class; more resources go to the politicians and those who extract economic relevance than those who are commit­ted to producing. The con­sequence when you have such devaluation is that it challenges progress,” he ex­plained.