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Business News of Friday, 13 March 2020

Source: www.mynigeria.com

We are not devaluing the naira anytime soon- CBN

CBN Governor, Godwin Emefiele CBN Governor, Godwin Emefiele

The Central Bank has reacted to rumours suggesting that it is on the verge of devaluing the Naira and triggering panic in the forex market.

In a statement by the Director, Corporate Communications, Issac Okorafor, the Apex Bank discredited those rumours and tagged them false, unwarranted and calculated to serve the dubious and selfish ends of unscrupulous players in the foreign exchange market.

CBN revealed that it was in a coordinated investigation with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the unscrupulous persons and FX dealers behind the panic and promised to apprehend them for economic sabotage.

The Central Bank said it had maintained stability in the foreign exchange for the past four years and was poised to continue to do so even in the outbreak of the Coronavirus and fall in the price of crude oil.

"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," its statement read.

The apex bank made it clear that its foreign reserves remained robust and comfortable. The CBN said efforts were on ground to make sure the impact of the virus would not affect the economy adversely.

"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," it added.

Concluding its statement, the Central Bank stressed yet again that it has not devalued the naira and would prosecute naysayers, detractors, and peddlers of fake news which said otherwise.

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," it concluded.

Recall that the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari warned Nigerians to buckle up and prepare for real tough times in at least the next three months.

The warning is coming amid the global gloom trailing last Monday’s slide in crude oil prices to close to $30 per barrel.

“Prepare for trouble for at least three months,” Mr Kyari said in his statement at the event. “Even if the price of crude oil goes back to $58 per barrel, the situation will still be tough, because there is a backlog of production hanging that has to be resolved."