Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has declared that the country would be out of recession in second or first half of the third quarter.
Emefiele made this known on Tuesday after emerging from a closed session with Senate President, Abubakar Bukola Saraki, in Abuja.
He revealed that the Senate President had called him to brief and give update to the Senate on the foreign exchange market declaring that the increasing strength of the foreign reserve, currently at $31 billion, is giving the CBN the necessary fire power to play in the foreign exchange market.
“You will all have observed that in the last two months, Central Bank has been involved in some form of intensive intervention in the foreign exchange market and this has fortunately resulted in a downward trend in the parallel market price of foreign exchange from as higher as N525 to as low as N370. Right now it hovers between N370 to N380,” he said.
“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 and we will do so with all intensity to ensure that foreign exchange 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 foreign exchange, you want to pay school fees or you are a small business that wants to buy foreign exchange for you to import your small items you will procure foreign exchange.
“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 foreign exchange market.
“It is the market or window that is opened for them to inflow their foreign exchange 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.
“Indeed with the kind of firepower that we have we are also going to play in that market to ensure that as the prices move on based on the managed float regime that we run that we should be able to control the price based on willing buyer and willing seller basis.
“And we believe on willing buyer, willing seller basis, foreign investors, exporter, non-exporters can come into that market and off load their capital and in doing so, we expect to see a lot of liquidity in that market and as we see much of liquidity in that market, we are very much optimistic that we are going to see high level of convergence we are hoping for.”