Market Unfavourable For Naira Devaluation — CBN

Market Unfavourable For Naira Devaluation — CBN

The Central Bank of Nigeria (CBN) says market fundamentals do not support the devaluation of Naira’s this time around. CBN disclosed this in a statement from the bank’s director of corporate communications, Isaac Okorafor, in Abuja on Friday.

Okorafor expressed dismay at speculative activities in the foreign exchange market that CBN would devalue Naira, causing panic in the foreign exchange market. He said these rumors were false, unjustified and calculated to serve dubious and selfish ends.

“We therefore wish to affirm that we have initiated a robust and coordinated investigation in collaboration with the Nigeria Financial Intelligence Unit (NFIU) and related agencies to discover the unscrupulous people and foreign exchange traders who are creating this panic and the full weight of our rules and regulations will be complied with.

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“This includes, but is not limited to, being charged for economic sabotage. “For nearly four years, CBN has successfully maintained relative stability in all segments of the foreign exchange market, which has allowed investors, families and other economic agents to plan and carry out their genuine foreign exchange transactions with relative ease.

“The introduction of various exchange management measures alongside complementary interventions in food production and manufacturing has drastically reduced food imports, which until then constituted a large part of the pressure on the foreign exchange market.

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“Although the Coronavirus outbreak has led to a global economic slowdown, falling oil prices and lower dollar inflows into Nigeria, associated public health concerns have also led to the closure of factories in China, a substantial drop in imports, widespread travel restrictions worldwide and cancellation of many conferences, sporting events, business trips and exchange requests.

“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. In this way, CBN remains capable and willing to meet any genuine demand for foreign exchange for legitimate transactions, ”he explained.

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The director noted that CBN was also working with tax authorities to adequately and accurately measure the immediate and expected impacts of Coronavirus, in order to respond comprehensively and at the same time ensure a solid and stable financial system, conducive to creation of employment and growth.

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

According to him, CBN will invoke the full weight of the sanctions applicable to any authorized person involved in such disturbing and speculative behavior on the market.

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