US to press FG on currency devaluation

folarin okunola

March 29, 2016 11:13 AM

Speaking to an audience at the U.S. Institute of Peace, U.S. Assistant Secretary of State for Africa, Linda Thomas-Greenfield, said that Nigeria should ensure that the value of the naira currency versus the U.S. dollar was "more realistic."

A trader changes dollars with naira at a currency exchange store in Lagos February 12, 2015.

Media reports reveal that the United States, on Monday, said it would press Nigeria in talks this week to adopt a more flexible foreign exchange rate to boost growth and investment in Africa's largest economy.

Speaking to an audience at the U.S. Institute of Peace, U.S. Assistant Secretary of State for Africa, Linda Thomas-Greenfield, said that Nigeria should ensure that the value of the naira currency versus the U.S. dollar was "more realistic."

"While most people complain about the possibility of there being a devaluation, people are already operating on a devalued currency, and the only people who are not, are people who are doing it officially," she said.

"Our recommendation is, and we will have discussions about it ... that they should look at the exchange rate and try to make the exchange rate more realistic to what the value of the naira is to the dollar," Linda Thomas-Greenfield added.

READ: Interbank rate hits 20 pct as banks meet new reserve rule - traders

Nigeria is currently facing its worst economic crisis in decades as the falling price of oil has slashed revenues, forcing the central bank to peg the exchange rate and introduce curbs to protect foreign exchange reserves, which have fallen to an 11-year low.

Last week, media reports revealed that some members of Nigeria's central bank monetary policy committee have said the naira should be devalued.

Currently, the naira trades about 40 percent below the official rate on the black market versus the dollar.