CBN Rules out Naira Devaluation for Now

Central Bank of Nigeria (CBN) has expressed dismay at speculative activities at the foreign exchange market from impressions that the apex market would devalue the Naira, thereby triggering panic in the Foreign Exchange Market.

CBN said at the weekend that market fundamentals do not support Naira devaluation this time around.

Mr Isaac Okorafor, director, Corporate Communications, said these rumours were false, unwarranted and calculated to serve dubious and selfish ends.

“We therefore wish to state that we have begun a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the unscrupulous persons and Foreign Exchange dealers who are creating this panic, and the full weight of our rules and regulations will be meted out to them.

“This including, but not limited to, being charged for economic sabotage.

“For nearly four years, the CBN has successfully maintained relative stability in all segments of the foreign exchange market, which has enabled investors, households and other economic agents to plan and to conduct their genuine foreign exchange transactions with relative ease.

“The introduction of several foreign exchange management measures side-by-side with complementary interventions in food production and manufacturing has drastically reduced food importation, which hitherto constituted a large chunk of the pressure on the foreign exchange market.

“Although the outbreak of the Coronavirus led to global economic slowdown, fall in the price of crude oil, and less inflow of dollars into Nigeria, the associated public health concerns have also led to factory closures in China, substantial drop in imports, widespread travel restrictions around the world, and cancellation of many conferences, sporting events, business travels, and foreign exchange orders.

“The size of Nigeria’s foreign exchange reserves remains robust and comfortable, given the current realities of Nigeria’s genuine and legitimate Foreign Exchange demand. As such, the CBN remains able and willing to meet all genuine demand for foreign exchange for legitimate transactions,” he explained.

The director noted that the CBN was also working with the fiscal authorities to properly and accurately dimension the immediate and expected impacts of the Coronavirus in order to respond comprehensively and at the same time, ensure a sound and stable financial system conducive for job creation and inclusive growth.

He said in light of current circumstances and macroeconomic fundamentals, the CBN has not devalued the Naira.

According to him, the CBN will invoke the full weight of applicable sanctions on any persons and authorised involved in such disruptive and speculative market behaviour.