Chidi Samuel| The Central Bank of Nigeria (CBN) on Friday said the naira will not be devalued over the Coronavirus crisis as market fundamentals do not support such move this time around.
In a statement made available to newsmen, the apex bank’s Director, Corporate Communications, Mr. Isaac Okorafor, the bank expressed dismay at speculative activities at the foreign exchange market from impressions that the CBN would devalue the Naira, thereby triggering panic in the Foreign Exchange Market.
According to Okorafor, these rumours were false, unwarranted and calculated to serve dubious and selfish ends.
He said, “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.
Below is Okorafor’s full statement….
CENTRAL BANK OF NIGERIA
Press Release
Market Fundamentals Do Not Support Naira Devaluation at This Time
The Central bank of Nigeria (CBN) wishes to note with displeasure, the rumours and speculative activities of unscrupulous players in the foreign exchange market, borne out of the impression that the CBN is on the verge of devaluing the Naira, and triggering panic in the FX Market.
These rumours are false, unwarranted and calculated to serve their dubious and selfish ends. We, therefore, wish to state as follows:
- 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 FX dealers who are creating this panic, and the full weight of our rules and regulations will be meted out to them, 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 FX orders; - The size of Nigeria’s foreign exchange reserves remains robust and
comfortable, given the current realities of Nigeria’s genuine and
legitimate FX demand. As such, the CBN remains able and willing to meet all genuine demand for foreign exchange for legitimate transactions; and - For the avoidance of doubt, the CBN is 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.
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 authorized dealers found to be involved in such disruptive and speculative market behavior.
Isaac Okorafor
Director, Corporate Communications
March 12, 2020
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