NIGERIA’s President Muhammadu Buhari stood firm in rejecting calls to devalue the currency of Africa’s top oil producer, saying that he wouldn’t “kill the naira.”
Letting the currency fall would only result in higher inflation and cause hardship for poor and middle-class Nigerians, Buhari said, according to an e-mailed statement from his spokesman Garba Shehu on Thursday.
“President Buhari said that proponents of devaluation will have to work much harder to convince him that ordinary Nigerians will gain anything from it,” Shehu said. “The president added that he had no intention of bringing further hardship on the country’s poor who, he said, have suffered enough already.”
The central bank of Africa’s largest economy has pegged the naira at 197-199 per dollar since March to stem its slide amid a rout in oil prices.
The policy has led to a shortage of foreign-exchange and been widely criticised by investors and businesses, who blame the restrictions for exacerbating the country’s economic slump.
Growth was 3 percent last year, the slowest pace since 1999, according to the International Monetary Fund.
The black market rate has plunged as Nigerians have become desperate for foreign currency, falling to a record low of 306 per dollar this week.
Buhari was speaking at a meeting on Wednesday with Nigerians in Kenya’s capital, Nairobi, according to Shehu.
Nigeria’s Monetary Policy Committee resisted pressure to devalue the currency on Tuesday.
Central bank Governor Godwin Emefiele gave no hint that curbs on imports and foreign-exchange trading would be lifted.
Investors have questioned whether the regulator would weaken the currency without the president’s permission.
Finance Minister Kemi Adeosun said in an interview last week that the central bank was “completely independent.”
Buhari “has been influencing the central bank, we see a situation where as commander-in-chief, whatever he wants to be implemented is what is done,” said Mike Nwanolue, a currency analyst at Lagos-based Greenwich Trust Group Ltd.
Keeping the naira artificially inflated “is not good for a country that needs inflows and also intends to raise Eurobonds.”
Nigeria’s government plans to sell as much as $1 billion of dollar bonds to help fund a record budget deficit this year.
. . . Gold in best monthly rally
FOR most commodity investors, January was one more bad month in a years-long bear market.
Gold was the exception.
Bullion for immediate delivery rallied 5 percent in January, the best gain in a year.
The returns were far better in stocks, with an index of South African producers jumping 33 percent for the month, the most since 1998.
Turmoil across Chinese financial markets, plunging oil prices and signs of softening economic growth in the US left investors reeling in January, boosting demand for traditional safe-haven assets like gold.
While losses deepened in other metals, gold outperformed and holdings in exchange-traded funds backed by bullion climbed to the highest since November.
“This year has seen tough equity markets, starting in China and spreading across the world, with the S&P entering bear territory,” Simona Gambarini, a commodities economist at Capital Economics in London, said by phone.
“That’s affected gold in a positive way.”
On Friday, gold prices slipped as stocks rallied around the world after the Bank of Japan surprised investors by adopting negative interest rates.
Prices slid 0,3 percent to $1 111.90 an ounce in Friday London trading.
Gold stocks were propelled higher during January, especially in South Africa as the weaker rand boosted profit margins.
For the week, platinum rallied 3,6 percent, the most in two months.
The market will stay in a shortage in the next six years as supplies remain constrained amid growing or robust demand from jewelers and car companies, according to a report commissioned by the World Platinum Investment Council. – Bloomberg.
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