The Central Bank of Nigeria (CBN) on Monday hinted of plans to address unbridled speculations in the foreign exchange, even as government plans to inject more dollars into the market.
Acting Governor of the CBN Folashodun Shonubi, while addressing State House Journalists after meeting with President Bola Tinubu on Monday, blamed the ongoing high rate of the Naira to the dollars on the activities of speculators.
Shonubi noted that the “President is very concerned about what is going on in the foreign exchange market”.
He said, “We have discussed and shared with him, what we are doing to improve supply.”
He assured that the apex bank will do “things which will significantly impact the market very very soon”.
Recall that the Naira appreciated by 0.33 percent week-on-week (w/w) at the Investors & Exporters (I&E) window to close at N740.6/$, from its previous close of N743.1/$.
At the parallel market, Naira depreciated week-on-week as the market saw offer quotes in the range of N885/$- N940/$. Activities in the I&E window had weakened as average FX turnover fell last week by 14.2percent to settle at $78.1million. Nigeria’s external reserves fell by 0.14percent to settle at $33.1billion.
Shonubi who blamed the problem on “speculative demands by people”, added that, “most of the problems are going to be dealt with soon”.
It was gathered that the new CBN policy measures will be implemented between now and Friday this week. This will involve injection of more dollars into the system, according to Presidency sources.
Although the source of the dollars to be injected was not immediately revealed, our source however, ruled out borrowing to fund the dollars injection.
The acting CBN Governor in his address stated that, “Mr President is very very concerned about some of the goings on in the foreign exchange market. One of the things we discussed was, what could be done to stabilise and what could be done to improve the liquidity in the market and also the goings on in the various other markets including the parallel market.
“He is concerned about its impact on the average person, since, unfortunately a lot of activities that we do which are purely local are still referenced to the exchange rates in the parallel markets.
“We have discussed and shared him what we’re doing to improve supply. If you look at the official market, you will find that that market has been fairly stable and the spreads of the difference are not fluctuated as much.
“We do not believe that the changes going on in the parallel market are driven by pure economic demand and supply but are topped by speculative demand from people. Some of the plans and strategies which I’m not at liberty to share with you, means sooner rather than later, the speculators should be careful, because we believe the things we’re doing when they come to fruition may result in significant losses to them.
“But my presence here is more about the concerns the President has, and he needs to know that we are doing something about it, assurances of which I have given him totally.
“So I hope this helps. We are looking at it and we’re doing things which will significantly impact the market in a few days time. And we will all see it.
“The intention is to ensure the environment operates at a level that’s more efficient, but also that is also very reasonable and does not have a negative impact to the best that we can on the lives of the average person.”
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