Covid-19: No Plans To Devalue Naira Despite Oil Price Crash, CBN Insists

•Says ‘Able and willing’ To Meet All Genuine Demand
•As Naira Weakens Further

The Central bank of Nigeria (CBN), on Thursday night, debunked rumours that it has devalued the Naira in the light of current circumstances and macroeconomic fundamentals.
In a statement, the apex assured that there are no plans for such, despite pressures from the crashing oil price at the international markets as a fallout of the Coronavirus disease (Covid-19) now spreading across the globe.
It noted, “with displeasure, the rumours and speculative activities of unscrupulous players in the foreign exchange market, borne out of the impression that the CBN is on the verge of devaluing the Naira, and triggering panic in the FX Market.”
As a result of the rumour for the most part of the day, the Naira traded as low as N410/US$ during the day, as worried importers moved to position in the midst of so much uncertainty. The naira weakened by 4.7% to N385.00/US$ in the parallel market, and by 1.5% to N374.00/US$ at the I&E FX window.
While describing the rumours, as “false, unwarranted and calculated to serve their dubious and selfish ends,” the apex bank said it has commenced “a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the unscrupulous persons and FX dealers who are creating this panic, and the full weight of our rules and regulations will be meted out to them, including, but not limited to, being charged for economic sabotage.”
Thereafter, it said the full weight of applicable sanctions will be invoked on any persons and authorized dealers found to be involved in such disruptive and speculative market behaviour.
For nearly four years, the statement recalled, the Naira has remained relative stable across various segments of the foreign exchange market, following which has enabled investors, households and other economic agents to plan and conduct genuine transactions with relative ease, just as 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.
It, however, admitted that the outbreak of the Coronavirus has resulted to a slowdown in the global economy, including the fall in the price of crude oil, resulting in less inflow of dollars into Nigeria, just as the associated public health concerns have also led to factory closures in China. This has also translated to a substantial drop in imports, widespread travel restrictions around the world, and cancellation of many conferences, sporting events, business travels, and FX orders.
These, notwithstanding, the CBN assured that “the size of Nigeria’s foreign exchange reserves remains robust and comfortable, given the current realities of Nigeria’s genuine and legitimate FX demand.”
The CBN says it remains able and willing to meet all genuine demand for foreign exchange for legitimate transactions; and that it “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.

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