FG targets FX from diaspora with issuance of $500m security, August
…Nigeria’s macroeconomic now stable — Minister
By Seun Ibiyemi
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has announced that the federal government in the next 3-4 weeks will begin the first issuance of its dollar-denominated security of $500 million.
This is aimed to attract foreign currency held by Nigerians abroad, adding that depending on the success of the issue, the government has no plans of raising euro bonds from the international market.
Edun, who disclosed this during a press briefing in Abuja on Thursday, said that the Federal Government has improved its fiscal management, with the economy positively turning the corner, leading to stable exchange rate, and positive trade balance.
According to him, the Central Bank of Nigeria (CBN) has been proactive in adjusting the monetary policy rate to address inflation head-on in line with its legal mandate adding that the move is beginning to have its desired effect reflected in the month-on-month reduction in inflation rate.
He added that the transition by CBN to a willing-buyer, willing-seller model has reduced exchange rate volatility and has improved volumes of foreign exchange trading.
“We are optimistic that inflation, despite being sticky at the moment, will moderate soon, due to some of the commitments.
“Likewise, in terms of what is happening with interest rates, the gap between inflation and interest rates is narrowing.
“And what that does is it makes the Naira more viable as a store of value and reduces the incentive to switch to non-Naira investments.
“Therefore, it has improved liquidity and the availability of foreign exchange in the Nigerian economy. And of course, the NAFEX rate and the parallel market rate have converged.
“We now have effectively one exchange rate, importantly, the investment climate has improved and this has helped to bring in investment. And let us remember that the ultimate aim of Mr President’s macroeconomic measures is to stabilise the economy so it can encourage investment, domestic investment, and foreign investment because with investment, you get increased productivity that leads to the creation of jobs, and reduction of poverty.”
