International Monetary Fund chief Christine Lagarde told Nigerian lawmakers on Wednesday the Fund does not support foreign exchange restrictions and that any such measures should be temporary.
She made the comments in an address to senior Nigerian parliamentarians during a four-day visit to Africa’s most populous nation, which has introduced foreign exchange curbs and allowed only limited devaluation after prices for its oil exports collapsed.
During Nigeria’s worst economic crisis in years, the central bank has resisted calls by investors to devalue the naira, which has been allowed to fall about 20 percent since the start of 2014.
Measures imposed by the central bank to restrict access to foreign exchange have been backed by President Muhammadu Buhari but have been unpopular with investors and highlighted Nigeria’s dependence on crude oil exports, which account for more than half of state revenues.
“Additional exchange rate flexibility, either up or down, can help soften the impact of external shocks, make output and employment less volatile, and help build external reserves,” said Lagarde.
“It can also help avoid the need for costly foreign exchange restrictions, which we don’t really support, and if they exist they should remain temporary by nature,” she added.
On Tuesday the IMF managing director, who has held meetings with Buhari, Finance Minister Kemi Adeosun and Central Bank Governor Godwin Emefiele, said she was not in the country to negotiate a loan. She will travel to Cameroon on Thursday.
