Senate summons CBN governor and finance minister over FX shift

May 26, 2016 6:53 AM

It comes a day after the central bank said it would adopt a flexible exchange rate policy, a shift from a peg for the naira seen as overvalued, which has hampered growth and investment.

Central Bank Governor Godwin Emefiele speaks during the monthly Monetary Policy Committee meeting in Abuja, Nigeria January 26, 2016.

Nigeria's parliament on Wednesday summoned the central bank governor and the finance minister to explain how a shift to a more flexible foreign exchange policy could help Africa's biggest economy to contend with its worst crisis in decades.

President Muhammadu Buhari has rejected any moves that could lead to a devaluation of the naira, whose official rate has been pegged at around 197 to the dollar since last February but it is trading at some 40 percent below that on the parallel market.

Announcing the policy shift on Tuesday, Central Bank Governor Godwin Emefiele said "a lot of details will be provided in the coming days".

The Senate, parliament's upper house, passed a motion to invite Emefiele and Finance Minister Kemi Adeosun for a briefing.

"The Senate accordingly resolves to invite the minister of finance and the governor of the central bank to brief the Senate on the monetary/fiscal policies adopted to salvage the current economic situation," messages on the Senate's Twitter feed said.

No date has been fixed for the briefing with Emefiele and Adeosun.

The OPEC member has been hit hard by low world prices for crude, sales of which account for around 70 percent of national income. Gross domestic product contracted by 0.4 percent in the first quarter of the year, the statistics office said last week.

Nigerian stocks rose to near a 5-month high on Wednesday, driven by hopes that the new foreign exchange policy would boost dollar supply and entice foreign investors who stayed away in recent months fearing they would be caught in the middle of a naira devaluation.