THE Central bank of Nigeria CBN) has expressed displeasure at the speculative activities of players in the FX market. These activities according to the Apex bank was borne out of the misconception that the CBN is on the verge of devaluing the Naira, and consequently triggering panic in the FX Market.
According to the CBN just as the current outbreak of Coronavirus has caused economic discomfort to countries all over the world and forced reduced FX income for Nigeria, it has also caused reduced demand for FX as importation, foreign trips, meetings, medical trips has also reduced significantly because of the impact of the disease.
As a result of these, the country has enough FX to cater for it’s needs nd there is no immediate need to devalue the Naira as the fundamentals are not in support of that now.
“These rumours are false, unwarranted and calculated to serve their dubious and selfish ends.”
The CBN states that it has “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 laws 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;
“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 behaviour.”