In response to the recent decline of the naira against major foreign currencies in the parallel market, the Central Bank of Nigeria (CBN) has initiated foreign exchange intervention strategies to curb the activities of currency speculators within the foreign exchange markets.
Acting Governor of the CBN, Folashodun Shonubi, revealed this during a briefing to State House correspondents at the Presidential Villa. Shonubi had met with President Bola Tinubu to discuss the measures being taken to counter the depreciation of the naira.
Shonubi noted that the volatility of the naira in the parallel market isn’t solely influenced by economic factors, but also by speculative demand. While he refrained from providing specific details of the intervention measures, he cautioned speculators that these actions could potentially lead to substantial losses for them.
The primary objective of his meeting with the President was to reassure him that the CBN was actively addressing the concerns associated with the fluctuating foreign exchange rates. Shonubi expressed confidence that the measures being put into effect would yield positive results within a short span of time.
He conveyed, “Mr. President is very concerned about some of the happenings in the foreign exchange market. We discussed strategies to stabilize the market, improve liquidity, and address activities in various markets, including the parallel market… We do not believe that the changes in the parallel market are solely driven by economic factors, but are influenced by speculative demand.”
Shonubi emphasized that the CBN’s ultimate goal is to establish an efficient and stable operating environment that minimizes adverse impacts on the average Nigerian’s daily life. While the exact strategies employed by the CBN remain confidential, the institution’s efforts reflect the commitment to restore stability to the foreign exchange market and counter speculative activity.