The Central Bank of Nigeria (CBN) declared on Monday that it is prepared to stop the naira’s downward trend and will soon be announcing a number of intervention measures.
Folashodun Shonubi, the acting governor of the country’s central bank, made this statement to State House reporters after a private meeting with President Bola Tinubu at the presidential villa in Abuja.
He issued a warning that the government would crack down severely on anyone engaged in shady activities on the foreign exchange market, including the parallel market.
The governor of the Central Bank of Nigeria stated that President Tinubu is concerned about the market’s development and its impact on the people and that he discussed with the president what could be done to stabilise the naira.
He observed with dismay that the changes occurring in the parallel market are being driven by speculative attitudes rather than demand.
He warned that speculators would suffer massive losses if the government implemented its strategies.
“Mr. President is very concerned about some of the goings-on in the foreign exchange market,” he said.
“One of the topics we discussed was what could be done to stabilise the market and improve liquidity, as well as what was going on in the various other markets, including the parallel market.”
“He is concerned about the impact on the average person because many of our purely local activities are still referenced to parallel market exchange rates.”
“We’ve discussed and I’ve shared with him what we’re doing to improve supply.
“If you look at the official market, you will notice that it has been fairly stable, and the difference spreads have not fluctuated as much.
“We do not believe that the changes occurring in the parallel market are being driven solely by economic demand and supply, but rather by speculative demand from individuals.”
“Some of the plans and strategies, which I am unable to share with you, suggest that speculators be cautious sooner rather than later, because we believe the things we are doing, if they come to fruition, may result in significant losses to them.”
“But my presence here is more about the President’s concerns and his need to know that we are doing something about it—assurances that I have given him completely.”
“So I hope this helps. We are looking at it and we’re doing things that 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 very reasonable and does not have a negative impact, to the best of our knowledge, on the lives of the average person.”