No plan to devalue Naira – Nigeria’s Central Bank

Despite a slump in the global economy as a result of the negative impact of the coronavirus (COVID-19) pandemic, the Central bank of Nigeria (CBN) – Nigeria’s financial regulator – on Thursday insisted the time was not ripe for the call for the devaluation of the Naira.

Since the outbreak of the deadly virus, the world economy, has been unsettled – with most economic activities virtually grounded.

Crude oil prices on the international market have nosedived to unprecedented low levels.

Crude oil prices, which averaged US$51.81 per barrel, declined close to US$30 earlier this week.

The proposal by the Organization of Petroleum Exporting Countries (OPEC) to cut output by another 1.5 million barrels per day in addition to the previous 2.1 million barrels per day was the group’s attempt to strengthen the market and boost crude oil price.

But, the resistance of non-OPEC countries, led by Russia, torpedoed the effort and exposed the market to the worst price decline since 2016.

Nigeria, which was already grappling with a low production capacity, is facing a different challenge, with oil prices dropping by almost 50 percent of the benchmark approved in the 2020 Federal Budget.

The prospect of a massive drop in oil revenue not only pushed the country’s economy into another tailspin but has led to pressures of a huge budget deficit and calls for the devaluation of the Naira.

However, the CBN in reaction to recent calls for the devaluation in response to the current global economic challenge said the time was not ripe for such an intervention.

“The Central Bank of Nigeria wishes to note with displeasure, the rumors and speculative activities of unscrupulous players in the foreign exchange market, borne out of the impression that the CBN is on the verge of devaluing the Naira, and triggering panic in the foreign exchange (forex) Market,” the apex bank said in a statement by its spokesperson, Isaac Okorafor

“These rumours are false, unwarranted and calculated to serve their dubious and selfish ends,” Okorafor added.

The central bank said it has commenced investigations in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the unscrupulous persons and forex dealers “behind the panic call”.

The financial regulator threatened to unleash the full weight of its rules and regulations against those behind the culprits, including, but not limited to, being charged for economic sabotage.

The COVID-19 virus, has since spread to many countries across the world, leaving behind massive human and economic losses in its trail.