Speculators May Incur Losses As CBN Plans New Measures To Stabilize Naira

Despite all efforts by Tinubu’s administration to make the naira stand strong against the dollar, it has been losing value almost every two weeks. With this, the Central Bank of Nigeria (CBN) is putting its best to restore the Naira from devaluation. The CBN's forthcoming actions will be made public in the coming days.  

This notice was released to State House journalists by the acting apex bank governor, Folashodun Shonubi who had a meeting with President Bola Tinubu at the Presidential Villa in Abuja.

In the report, the apex governor said that the government will make strict policies against any individual or group involved with illegal activities while operating in the foreign exchange market, including the parallel market.

When interviewed by State House journalists, Folashodun Shonubi said that his talk with Bola Tinubu in the Villa was centered on plans to stabilize the Naira. He also said that the President was worried over the dip in Naira against the dollar and its impact on the public as well as commodities.

Shonubi warned that speculators would witness significant losses if the Federal Government moved on with its plan to address the Naira devaluation. He further stated that speculative inclinations rather than demand were impacting changes in the parallel market.

What Folashodun Shonubi Told State House Journalists

“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 stabilise 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.

“He’s concerned about its impact on the average person, since, unfortunately, a lot of activities that we do, which are purely local, are still referenced to exchange rates in 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 the 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 touched 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.

“But my presence here is more about the concerns the President has and his needs to know that we are doing something about it, assurances of which I have given him totally.

“So I hope this helps. We are 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. Thank you very much.”

In a wrap, President Bola Tinubu has instructed that the Central Bank of Nigeria (CBN) implement strict monetary policies that will curb the Naira devaluation and give Nigeria’s economy relevance against global financial giants.

The CBN has been fighting against the Naira devaluation leading them to announce the unification of all segments of the foreign exchange (FX) market which will put a stop to its control of the forex market in June 2023.

Ever since this decision was signed and implemented by the Federal Government of Nigeria, the exchange rate of local currency has been determined by market forces.