CBN Warns Against Engaging in Currency Speculation

Nigerians and the business community have been urged by the Central Bank of Nigeria (CBN) not to fall prey to the speculative actions of some participants in the foreign exchange market.

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News Reports that Mr. Osita Nwanisobi, the CBN’s Director of Corporate Communications, said as much yesterday in Abuja, explaining that the CBN remained committed to resolving the country’s foreign exchange problems and had been working to manage both the demand side and supply side challenges.

While admitting that there was huge demand pressure for foreign exchange to meet the needs of manufacturers as well as those for the payment of tuition, medical fees and other invisible, Nwanisobi said the Bank was concerned about the international value of the Naira, adding that the monetary authority was strategising to help Nigeria earn more stable and sustainable inflow of foreign exchange in the face of dwindling inflow from the oil sector.

Specifically, he noted that recent initiatives undertaken by the Bank such as the RT200 FX Programme and the Naira4Dollar rebate scheme had helped to increase foreign exchange inflow to the country.

According to him, the Bank’s records showed that foreign exchange inflow through the RT200 FX Programme in the first and second quarters of 2022 increased significantly to about US$600 million as at June 2022. Similarly, he disclosed that the Naira4Dollar incentive also increased the volume of Diaspora remittances during the first half of the year.

He said interventions such as the 100 for 100 Policy on Production and Productivity, Anchor Borrowers’ Programme (ABP) and the Non-Oil Export Stimulation Facility (NESF), among others, were also geared towards diversifying the economy, enhancing the inflow of foreign exchange, stimulating production and reducing foreign exchange demand pressure.

Nwanisobi, therefore, said that the Bank would continue to make a deliberate effort in the foreign exchange sector to avert a further downward slide in the value of the naira, which he observed is fuelled by speculative tendencies.

Reiterating an earlier position of the CBN Governor, Mr Godwin Emefiele, he urged Nigerians to play their role by adjusting their consumption patterns, looking inwards and finding innovative solutions to the country’s challenges.

He submitted that Monetary Policy alone could not bear all the burden of the expected adjustments needed to manage the challenges around Nigeria’s foreign exchange, saying shoring up the value of the Naira was a collective responsibility.