CBN allays fears of Naira devaluation due to coronavirus, blames unscrupulous FX players for panic

CBN allays fears of Naira devaluation due to coronavirus, blames unscrupulous FX players for panic

The Central Bank of Nigeria (CBN) on Thursday, March 12; issued a statement regarding the current volatility in the foreign exchange market induced by fears due to the coronavirus.

Isaac Okorafor, CBN Director, Corporate Communications made this assertion; while slamming “unscrupulous players in the foreign exchange market” as the brains behind the “impression that the CBN is on the verge of devaluing the Naira”; thereby triggering panic in the FX Market.

In a bid to redress this, the CBN confirmed the commencement of “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.”

The statement continues, “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.

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“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.”

The apex financial body further allayed the fears of Nigerians regarding a potential economic downturn; due to the worldwide impact of the coronavirus.

CBN also explained that “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.”

The rumours regarding the devaluation of the Naira was also repudiated in the statement by the CBN who vowed to “invoke the full weight of applicable sanctions on any persons and authorized dealers found to be involved; in such disruptive and speculative market behaviour.”

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