The deputy governor, Corporate Services Department of the
Central Bank of Nigeria (CBN), Mr Edward Adamu said this in Abuja on Monday.
He spoke at an interactive session with the House Committee
on Finance on the 2022-2024 Medium-Term Expenditure Framework/Fiscal Strategy
Paper (MTEF/FSP).
Adamu explained that the exchange rate was determined by the
forces of demand and supply and that there were three main avenues by which
Nigeria got its foreign exchange.
“We have proceeds from the sale of crude oil, we have
foreign portfolio inflows and remittances; those are the three major ways that
we get forex.
“Crude oil sale has not been as high as we all will want it
to be and obviously in the aftermath of COVID-19, the global economy grounded
to a halt and the use of crude oil was also halted.
“To the extent that sometimes in April last year, we had
crude oil selling at a negative, which means that people were being paid to
store what they bought and so that the avenue for forex inflows was
significantly reduced.
“You go on to foreign portfolio inflows, you notice that
investors also settled their affairs on the side of caution and so, once
COVID-19 outbreak occurred, they moved out about $120 billion dollars from
emerging markets to safe havens in America and Nigeria is one of those
countries from where monies were withdrawn.
“On the side of remittances, once our brothers and sisters
abroad were not working because of the situation they found themselves; they
had very little to send to us here and so, we also saw remittances reduced.
“On the demand side, we saw speculative demand on the side
of Nigerians, if you needed a truck of goods, because you are not sure of the
uncertainties of COVID, you wanted to get three trucks.
“All these pressures on both the demand and supply side, the
availability of dollar became more difficult and we had a decline or
depreciation in the value of the naira,’’ he said.
Adamu, however, said that a lot of efforts within the CBN
and the recovering global economy were helping oil prices and remittances to
recover.
”This is why we are happy that the exchange rate has
stabilised somewhat; it is a moving target, but it has stabilised in the import
and export window for a while”, he added.
However, the Chairman of the committee, Rep. James Faleke
(APC-Lagos) directed the CBN to present its audited account to the Office of
the Accountant General of the Federation (OAGF) for scrutiny.
Faleke said that information available to the committee
showed that the apex bank was yet to turn in its audited accounts since 2010
and about N800 billion was yet to be remitted to the Federal Government.
Adamu responded by saying the apex bank would interface with
the OAGF and reconcile any difference there was and report to the committee in
two weeks, through the Minister of Finance.
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