Godwin Emefiele who is the Central Bank Governor was strongly criticized by the Bloomberg, financial and business news source.
The article titled “Nigeria’s Woes Deepen as Central Bank Missteps on Currency” starts with the opinion that as if the collapse in crude prices, forthcoming elections and an Islamist insurgency weren’t enough, investors in Nigeria have another matter to worry about: deciding whether the new central banker is his own man.
Bloomberg states that appointed in June Godwin Emefiele, has focused on stemming currency declines that could damage the government of Africa’s biggest oil producer and economy ahead of Feb. 14 elections. The source adds that Emefiele is putting off painful and inevitable adjustments in the exchange rate.
Kevin Daly, fund manager says: “It’s only natural to think there’s less independence at the central bank.He replaced arguably the most effective and outspoken central bank governor that we’ve seen in African emerging markets for some time.He hasn’t held government bonds in naira since about October, partly because of concern he might not be able to easily sell assets in the currency.”
However, Emefiele answered that politics doesn’t affect any of his decisions. He said: “The central bank remains a very independent institution, just like it was under my predecessor.We have never been influenced by any political consideration. No politician talks to us to try and influence us.”
Further, the article explains that the central bank spent $5 billion defending the exchange rate in the last three months of 2014, reducing reserves to a three-year low of $34 billion, while devaluing the midpoint of the official exchange rate to 168 per dollar from 155 and raising the benchmark borrowing cost to a record 13 percent.
While oil producers with falling exchange rates from Russia to Malaysia have avoided imposing currency controls, Emefiele’s measures cut daily trading of the naira to less than a tenth of previous levels last month, according to Standard Chartered Plc.
The effect was to reduce daily trading to less than $30 million from $300 million to $500 million and foreign holdings of government bonds in naira to 14 percent of the total from as much as 27 percent in 2013, according to Samir Gadio, Standard Chartered’s head of African strategy.
Details on Bloomberg
The article titled “Nigeria’s Woes Deepen as Central Bank Missteps on Currency” starts with the opinion that as if the collapse in crude prices, forthcoming elections and an Islamist insurgency weren’t enough, investors in Nigeria have another matter to worry about: deciding whether the new central banker is his own man.
Bloomberg states that appointed in June Godwin Emefiele, has focused on stemming currency declines that could damage the government of Africa’s biggest oil producer and economy ahead of Feb. 14 elections. The source adds that Emefiele is putting off painful and inevitable adjustments in the exchange rate.
Kevin Daly, fund manager says: “It’s only natural to think there’s less independence at the central bank.He replaced arguably the most effective and outspoken central bank governor that we’ve seen in African emerging markets for some time.He hasn’t held government bonds in naira since about October, partly because of concern he might not be able to easily sell assets in the currency.”
However, Emefiele answered that politics doesn’t affect any of his decisions. He said: “The central bank remains a very independent institution, just like it was under my predecessor.We have never been influenced by any political consideration. No politician talks to us to try and influence us.”
Further, the article explains that the central bank spent $5 billion defending the exchange rate in the last three months of 2014, reducing reserves to a three-year low of $34 billion, while devaluing the midpoint of the official exchange rate to 168 per dollar from 155 and raising the benchmark borrowing cost to a record 13 percent.
While oil producers with falling exchange rates from Russia to Malaysia have avoided imposing currency controls, Emefiele’s measures cut daily trading of the naira to less than a tenth of previous levels last month, according to Standard Chartered Plc.
The effect was to reduce daily trading to less than $30 million from $300 million to $500 million and foreign holdings of government bonds in naira to 14 percent of the total from as much as 27 percent in 2013, according to Samir Gadio, Standard Chartered’s head of African strategy.
Details on Bloomberg
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