Hope rising as foreign reserve hits $31 billion, CBN assures of more intervention in forex market

Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has said the country will be completely out of recession in second or first half of the third quarter (Q3).

Emefiele spoke after emerging from a closed session with Senate President, Abubakar Bukola Saraki, in Abuja. The CBN chief who said the Senate President invited him to give the upper legislative chamber update on the foreign exchange market (forex), said the country’s foreign reserve currently stood at $31 billion.

He said the increasing strength of the foreign reserve is giving the CBN the necessary fire power to play in the forex market.

He said: “Actually, the Senate president invited us to come and brief the Senate in a closed session and the leadership about providing some updates about the forex markets.

“You will all have observed that in the last two months, the CBN has been involved in some form of intensive intervention in the forex market and this has fortunately resulted in a downward trend in the parallel market price of forex from as high as N525 to as low as N370. Right now it hovers between N370 to N380.

“I think it’s an opportunity for me to say that we are going to continue this intervention because the reserve looks very good; as I speak to you, our reserve stands at above $31 billion and that provides us enough of firepower or ammunition to be able to defend the currency. We will do so with all intensity to ensure that forex is procured by everybody.

“You want to import raw materials, you will get foreign exchange, you want to import plant and equipment you will get forex, you want to pay school fees or you are a small business that wants to buy forex for you to import your small items you will procure forex.

“And indeed we have started to see a downward trend even in prices and you have also must observe that inflation is also trending downward.

“We are very much optimistic that by the end of the second quarter very latest third quarter we should be out of recession that we are in right now.

“I think what is important is that last week we brought out an announcement which is meant to encourage our foreign investor community to get involved as well in the forex market.

“It is the market or window that is opened for them to inflow their forex and come into the market on what we called a willing buyer, willing seller basis in which case there will be no form of any price intervention by anybody and indeed even including the Central Bank.”