CBN Debunks Naira Devaluation, Threatens Sources of False Speculations

The Central Bank of Nigeria (CBN) has debunked the Naira devaluation talks making the rounds, threatening to sanction people who are peddling this false speculation.

According to a statement, which was released late the CBN blamed “unscrupulous players in the foreign exchange market” for spreading the rumour.

The statement, signed by Isaac Okafor, the CBN Director in charge of Corporate Communications, also noted that the false speculations have created panic in the foreign exchange market.

Speculators will be Punished

The CBN is taking steps towards uncovering those responsible for this. The apex bank is working with the Nigerian Financial Intelligence Unit (NFIU) and other relevant agencies to investigate and uncover those responsible for causing panic. Anyone found responsible for this will face the law.

There is no devaluation of the naira: The statement went further to categorically state that the Central Bank of Nigeria has not devalued the naira. It will not do so in the meantime because market fundamentals do not support such a move. The statement said:

“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 authorised dealers found to be invoked in such disruptive and speculative market behaviour.”

Bottom Line

Nonetheless, just as the pandemic adversely affected oil prices by reducing dollar inflows into the country, so did it lead to a drastic decline in imports and all forms of foreign travel which “hitherto constituted a large chunk of the pressure on the foreign exchange market.”

The CBN further argued that Nigeria’s foreign exchange reserve is still “robust and comfortable” in view of the current FX realities. In the same vein, the apex bank claimed that it is capable of meeting all “genuine” foreign exchange demands.

The CBN further argued, in view of current FX facts, that Nigeria’s currency reserves remain “robust and comfortable” and that Naira devaluation is false speculation. The apex bank claimed in the same vein that it could satisfy all “genuine” demands for foreign exchange.

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