No subsidised forex for 2017 pilgrimage – Emefiele

GOVERNOR of Central Bank of Nigeria (CBN) Mr Godwin Emefiele, on Tuesday hinted that there will be no discriminatory foreign exchange allocation to intending pilgrims to either Saudi Arabia or Israel in 2017.
Briefing newsmen on the outcome of Monetary Policy Committee (MPC) in Abuja, Emefiele said in consideration of the headwinds in the domestic economy and the uncertainties in the global environment, MPC decided by a unanimous vote to retain the MPR at 14.0 per cent alongside all other policy parameters.
While making clarifications on allegations of multiple foreign exchange rates regimes available in the economy, the CBN Governor explained that what was being referred to as budget forex rate was nothing but government’s forecast.
On so-called pilgrim forex rate, Emefiele lamented that such speculations were the handiwork of “those who have access to CBN for clarifications, are aware of true situation, but have decided to embark on mischief for whatever reasons best known to them.”
According to him, both Christian and Muslim pilgrims’ boards had already paid for foreign exchange around March 2016 when dollar was still exchanging for N191/$ in 2016 and it would not be good business practice to hike the fare later in the year just because exchange rate had fallen.
MPC noted that total foreign exchange inflows through the CBN increased significantly by 82.45 per cent in December 2016 owing mainly to the increase in oil prices, but total outflows, however, spiked during the same period.
“The MPC welcomed the modest increase in oil prices following the last OPEC decision to cut output and noted the increase in the policy rate of the US Federal Reserve Bank in December 2016 and the potential implications of that decision for international interest rates and capital flows.
“While noting the materiality of the output cut on oil prices, the committee cautioned that the effect could rapidly wane, given the likelihood of a supply glut from non-OPEC members, low level of global economic activity and weak growth.”
While reiterating the need to be more inward looking and hasten efforts towards economic diversification to support the domestic economy and improve life for the Nigerian people especially in recognition of the seemingly inevitable structural shift in the global economy, committee members acknowledged the imperative of sectoral policies and greater coordination of monetary and fiscal policy.
Emefiele then gave the assurance that CBN will strengthen the textile sector with the N50 billion intervention loans in view of the fact that the sector was second largest employer of labour before it went comatose.
In summary, the MPC decided to: Retain the MPR at 14 per cent; retain the CRR at 22.5 per cent; retain the liquidity ratio at 30.00 per cent; and retain the asymmetric corridor at +200 and -500 basis points around the MPR.