Abuja, Nigeria – The Federal Government has expended nearly $8 billion in efforts to support the naira amid continued economic challenges, financial expert Bismarck Rewane has revealed.
Speaking on Channels Television’s News at 10 on Friday, the CEO of Financial Derivatives Company highlighted the significant interventions made to curb exchange rate volatility and inflation concerns.
His comments followed the recent Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN), which on Thursday maintained the Monetary Policy Rate (MPR) at 27.50%.
Government Borrowing and Currency Defense
According to Rewane, in addition to spending billions to defend the naira, the government has also raised funds through debt instruments.
“We’ve also borrowed $4 billion in bond issues. When you take a look at that, you’ll see there is a lot of work. We’ve actually spent almost $8 billion trying to support the naira at current levels,” he stated.
Inflation Rebasing and Its Impact
Rewane also addressed the recent rebasing of Nigeria’s inflation data, which has led to mixed interpretations of the country’s economic situation. He explained that three different methods of measuring inflation are currently being considered:
- Old Method: Inflation is at 34.8%
- New Method (Rebased Data): Inflation stands at 24.4%
- Market Survey (Real Inflation): Inflation is estimated at 33%
Expressing doubt over the sharp drop in inflation under the new metric, Rewane suggested the figures might not accurately represent the economic reality for most Nigerians.
“There’s no way that inflation can reduce by 10% in a short period. The man on the street does not believe that inflation has come down as sharply as that,” he noted.
Implications for Nigerians
The persistent pressure on the naira, coupled with inflation uncertainties, raises concerns about the effectiveness of government policies in stabilizing the economy.
While official data suggests inflation is moderating, real market conditions indicate otherwise, leaving many Nigerians struggling with rising living costs.
CBN’s Stance on Economic Stability
CBN Governor Olayemi Cardoso, in announcing the MPC decision, stated that the committee was satisfied with recent macroeconomic developments expected to improve price stability in the medium term.
“These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the moderation in the price of PMS,” Cardoso said.
However, he acknowledged the persistent inflationary pressures, particularly those driven by rising food prices. The committee also noted the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which adjusted the weighting of items to reflect current consumption patterns.
Despite the government’s interventions, economic uncertainty remains, leaving many Nigerians concerned about the true state of inflation and exchange rate stability.
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