Naira devaluation: CBN blames players in forex market for spreading rumour

March 13, 2020
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The Central Bank of Nigeria (CBN) has debunked speculations making the rounds and suggesting that the naira is finally about to be devalued.

In a statement, the apex bank blamed “unscrupulous players in the foreign exchange market” for spreading the rumour.

The statement, which was signed by Isaac Okafor, the CBN Director in charge of Corporate Communications, also noted that the false speculations have created panic in the foreign exchange market.

To address this, the CBN is taking a very calculated step towards unravelling those responsible. In other words, the apex bank is working together with the Nigerian Financial Intelligence Unit (NFIU) and other relevant agencies to investigate and uncover those who are responsible for creating panic. Anybody found responsible for this will be made to face the law.

The statement went further to categorically state that the Central Bank of Nigeria has not devalued the naira. It will not do so in the meantime because market fundamentals do not support such a move. The statement said:

“In light of current circumstances and macroeconomic fundamentals, the CBN has not devalued the naira. Consequently, the CBN will invoke the full weight of applicable sanctions on any persons and authorised dealers found to be invoked in such disruptive and speculative market behaviour.”

The Coronavirus effect: The CBN did not feign ignorance of the negative effects of COVID-19, as it acknowledged the effects of the killer disease on the Nigerian economy.

But just as much as the pandemic has adversely affected oil prices, thereby limiting dollar inflow into the country, it has also resulted in a drastic reduction in importation as well as all kinds of foreign travels, which “hitherto constituted a large chunk of the pressure on the foreign exchange market.”

The CBN further argued that Nigeria’s foreign exchange reserves is still “robust and comfortable” in view of the current FX realities. In the same vein, the apex bank claimed that it is capable of meeting all “genuine” foreign exchange demands.

The CBN also noted that it was working with fiscal authorities to understand the current and anticipated impacts that the Coronavirus pandemic might have in the Nigerian economy. Doing this helps to better curtail the negative impacts that Nigeria might be faced within the nearest future.

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