With the worrying decline of the Naira against other foreign currencies, Nigeria’s President Bola Tinubu has approved measures preferred by the country’s apex bank, the Central Bank of Nigeria (CBN), to stop the decline and enhance liquidity in the foreign exchange market, including the parallel market.
The Acting Governor of the CBN, Folashodun Shonubi, who spoke with journalists at the Presidential Villa, Abuja, after meeting with President Tinubu, also noted that the activities being witnessed at the parallel market are being driven by speculative demands.
He said the President expressed serious concern over the impact of the currency slide on the average person, especially as all local economic activities are influenced by parallel market exchange rates.
Tinubu’s decision to abandon Nigeria’s years-long currency peg, allowing the Naira to trade freely, has prompted the biggest fall in the value of the currency in the country’s history.
The declining value of the Naira has seen huge price hikes and a drop in purchasing power of many Nigerians. The impact on fuel price has had a snowball effect on cost of transportation and food.
Shonubi warned foreign exchange market speculators to curb their negative activities, as they (speculators) would suffer huge losses when government activates its planned strategies.
In his words; “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 stabilize 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.
“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 topped 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.”
Shonubi added that the government is “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,” He said.
