After meeting with President Bola Tinubu to discuss ways to increase dollar liquidity on the official market, Nigeria’s acting governor announced on Monday that the central bank plans to take actions that will have an impact on currency markets in the coming days.
Folashodun Shonubi, the acting governor of the central bank, met with Tinubu after the bank on Friday disclosed a $19 billion commitment in derivatives for 2022, which is almost the same amount as the nation’s reserves.
However, the acting governor of the Central Bank of Nigeria, CBN, Fola Shonubi, reportedly warned speculators of probable losses as they adopt a new policy to stabilize the exchange rate, according to Nairametrics, a Nigerian business news publication.
The acting governor claims that the apex bank has developed a future policy that will eliminate differences between official and black market rates. As demand continued to outpace supply, the black market pricing dropped as low as N950 to $1 last week. The official exchange rate was often N765 to 1 USD.
“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,” the acting CBN governor relayed.
“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,” he added.
Speaking further on the subject, the acting CBN governor continued, stating, “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.”