REPS WANT CBN TO ADDRESS THE IMPACT OF THE FALLING NAIRA AGAINST THE DOLLAR 09-10-23
By Sadiq Aminu The House of Representatives has urged the Central Bank of Nigeria to implement monetary policy adjustments to stabilise the currency, address speculative activities in the forex market, and increase the withdrawal limit of the naira to reduce the pressure on dollars and other foreign currencies.
The House also urged the Federal Government to formulate policies and structural Reforms to reduce
corruption and promote economic diversification within the nation’s economy.
This was sequel to the adoption of a motion by a member from Bauchi State Mr Ismaila Haruna-Dabo at plenary.
The Lawmaker observed that 90% of Nigeria’s total export earnings are from oil, but changes in the price of oil around the world have a big impact on the country’s foreign exchange market, which explains why the naira has continued to depreciate.
According to him, depreciating naira makes imported goods more
expensive, leading to higher inflation rates.
This increased cost of living he said disproportionately affects the
most vulnerable citizens, as they struggle to afford basic necessities, which are now glaring across the
country.
“Nigeria’s foreign exchange inflows are lagging despite unification in June, with high demand for foreign currency and limited access to official markets incentivizing black market purchases, the naira has lost a greater percent of its value against the dollar, falling from N778.602/$ as of September 26, september 2023, and nearly N1000/$ at the parallel market, making it the first time Nigeria has lliberalised the foreign exchange market.
Mr Haruna-Dabo added that foreign investors may be deterred from
investing in Nigeria, fearing potential currency losses, which is capable of stunting economic growth and hindering the creation of new job opportunities for unemployed Nigerian youth.
He stated that a weaker and depreciating Naira could increase Nigeria’s external debt servicing costs, potentially reducing government spending on critical sectors like healthcare and education.
The Lawmaker said the Central Bank of Nigeria (CBN) frequently uses its foreign reserves to stabilise the
naira, but that this can deplete its reserves, making the country vulnerable to economic shocks.
Adopting the motion, the House called on the Federal Government to promote exportation and reduce importation by
enhancing foreign investors’ confidence on its Fiscal and Monetary Policies.
It mandated the Committees on Banking Regulations and National Security and Intelligence to interfaces with the CBN with the purpose of initiating compliance strategies.
The House also mandated the Committee on Banking Regulation to investigate the use of US Dollar sand other foreign currencies as legal tender for domestic transactions in Nigeria.