Currency in circulation declines by 0.55% to N2trn

.As Naira stables at parallel market, weakens at Investors segment

.FG clarifies directive on Forex restriction for food importation

As mop-up of excess liquidity in the system continues, currency in circulation has declined by a 0.55 per cent to N2 trillion in July, as against N2.01 trillion stood in June, checks by The Daily Times revealed.

This is even as the nation’s currency, Naira, traded flat at N360 against the dollar at the parallel market but weakened marginally by 0.06 per cent week-on-week (w/w) to settle at N363.46 against the dollar at the investors & Exporters Foreign Exchange (I&E FX) window.

Latest data obtained from the official website of the Central Bank of Nigeria (CBN) has shown that currency in circulation in May stood at N2.11 trillion, lower than N2.16 trillion in April 2019.

The breakdown of the figure further revealed that the currency in circulation as of March was N2.15 trillion, compared to N2.24 trillion in February, while N2.14 trillion was reported by the apex bank in January this year.

Analysts believe that the mop-up of excess liquidity from the system by the central bank was a move to curb inflation and stabilise the Naira against other currencies.

Finance experts, however, noted that that the cashless policy of the government should have yield targeted results, but for infrastructure and stakeholders’ goodwill power to curb politicians carrying cash during or after elections.

The CBN governor, Mr. Godwin Emefiele, in his five-year policy thrust (2019-2024) in June, said the apex bank “will reinvigorate its efforts at driving the cashless initiative across the country, due to the immense efficiency gains that will be derived from it, and the impact it could have on our financial inclusion drive.

“Given Nigeria’s large size, and the cost involved in building bank branches across the country, the payment department would support the spread and utilisation of digital modes of transactions, so that every Nigerians will have access to financial services”, he explained.

Meanwhile, the Presidency on Sunday, clarified that President Muhammadu Buhari has not banned or restricted food importation into the country.

President Muhammadu Buhari had on Tuesday last week in Daura, Katsina State, directed the CBN to stop providing foreign exchange for importation of food into the country.

A statement by the Senior Special Assistant on Media and publicity, Mallam Garba Shehu, on Sunday, faulted the interpretation of the Financial Times report over the issue.

Stressing that there was no ban or restriction on food imports, he explained that importers of the food items are still free to source their Forex from non-government financial institutions towards meeting their importations.

The President’s directive, he said, only has to do with Forex from the CBN.

This was contained in a letter to the Editor of Financial Times over its report entitled “Muhammadu Buhari sparks dismay over policy shift on food imports”, 15th August 2019.

The letter reads: “Your article “Muhammadu Buhari sparks dismay over policy shift on food imports” (15 August) suggests the Nigerian Government is restricting the import of agricultural products into the country. This is simply incorrect. To be absolutely clear, there is no ban – or restriction – on the importation of food items whatsoever.

“President Buhari has consistently worked towards strengthening Nigeria’s own industrial and agricultural base. A recent decision sees the Central Bank maintain its reserves to put to use helping growth of the domestic industry in 41 product sectors rather than provide FOREX for the import of those products from overseas.

“Should importers of these items wish to source their FOREX from non-government financial institutions (and pay customs duty on those imports – increasing tax-take, something the FT has berated Nigeria for not achieving on many occasions) they are freely able to do so.

“Diversification of FOREX provision towards the private sector and away from top-heavy government control, a diversification of Nigeria’s industrial base, and an increase in tax receipts – are all policies one might expect the Financial Times to support. Yet for reasons not quite clear, the author and this newspaper seem to believe the president’s administration seeks to control everything – and yet do so via policies that relinquish government control”, he stated.