The Central Bank of Nigeria (CBN) on Monday hinted of its plans to take new measures to stabilize the Naira exchange rate against other foreign currencies in the foreign exchange markets in furtherance of its measures to ensure that the FX unification policy impacts positively on the nation’s economy.
The Acting Governor of the CBN, Mr. Folashodun Shonubi, spoke on the latest apex bank’s moves during his interaction with State House Correspondents after briefing President Bola Tinubu on what the bank was doing to halt the sustained depreciation and disparity of the local currency at the official and unofficial markets.
The banker, who confirmed that the President expressed his concerns about the impact of recent developments in the FX market, particularly on ordinary citizens, during the meeting, said that he assured the President that the CBN was working to improve liquidity in the official FX market and also address issues in the parallel market.
While reiterating his earlier position that the fluctuations in the parallel market were not solely driven by economic factors, but also speculative demand, Shonubi explained that while he would not disclose specific details of the issues discussed with the President, he warned speculators that the apex bank’s yet-to-be unveiled initiatives could potentially lead to significant losses for fraudulent dealers in the FX market.
According to him, primary purpose of his visit to the President is to reassure him that the CBN was taking decisive action to address the concerns raised and expressed optimism that the measures being implemented would yield positive outcomes within a few days.
Shonubi, who maintained that the apex bank’s ultimate goal was to create an efficient and conducive operating environment that would minimise negative impacts of the FX policy on the average Nigerians life, promised Nigerians that the CBN remained committed to ensuring stability and improving the overall economic landscape for their well being.
He said: “Mr President is very concerned about some of the goings on in the foreign exchange market. One of the things we discussed is 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’s 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 exchange rates in the parallel market.
“We’ve discussed, and I’ve shared with him what we’re doing to improve supply. If you look at the official market, you’ll find that that market has been fairly stable and the spreads of the difference have 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 touched 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 his 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”, Shonubi added.
