The acting governor of the Central Bank of Nigeria, CBN, Fola Shonubi warned speculators of potential losses as they implement a new policy to stabilize the exchange rate.
According to the acting governor, the apex bank has come up with a yet-to-be-announced policy that will wipe out the disparities between the official and black market rates.
The black market rate fell to as low as N950/$1 last week as demand continued to outstrip supply. Meanwhile, the official rate averaged N765/$1.
What Shonubi is saying
Mr Shonubi spoke about the concerns of the president about the forex situation and mentioned that efforts are in place to stabilize the exchange rate.
- “Mr. President was very concerned or is very very concerned about some of the goings on in the foreign exchange market and one of the things we discussed was what could be done to stabilize and improve the liquidity in the market.
- “And also, the goings on in the other markets including the parallel markets, he is concerned about its impact on the average person. Unfortunately a lot of activities that we do which are purely local are still referenced to exchange rates in the parallel market.”
On what they are doing to fix the fx disparity
- “We’ve discussed and I’ve shared with him what we’re doing to improve the supply, if you look at the official market you 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 is driven by pure economic demand and supply but are topped by speculative demand from people.”
On warning currency speculators
- “Some of the plans and strategies which I’m not at liberty to share with you may sooner rather than later cost the speculators, so they should be careful because we believe the things we are doing when they come to fruition may result in significant losses to them.”
Policy to be announced in a few days’ time
- “But my presence here is more about the concerns the president has and his need to know that we are doing something about it assurances of which I have given him totally.
- “So I hope this helps we’re 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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The @cenbank plans new measures to stabilize the foreign exchange market. pic.twitter.com/J5IMOINtJB— NTA News (@NTANewsNow) August 14, 2023
