Don’t Mop up Dollar to Avoid Significant Losses, CBN Warns Speculators

By Aduragbemi Omiyale

The Central Bank of Nigeria (CBN) has warned speculators in the foreign exchange (FX) market not to convert their Naira to Dollar because the policy reforms it was planning would make them lose their investment.

The acting Governor of the CBN, Mr Folashodun Shonubi, sounded this bell while speaking with newsmen after his meeting with President Bola Tinubu in Abuja on Monday.

He blamed the free fall of the local currency on activities of speculators in the parallel market, which he said are not “driven by pure economic demand and supply.”

Mr Shonubi said efforts are being made to improve the supply of forex into the market to boost the Nigerian currency, assuring that speculators will bite their fingers regretfully.

“Mr President is very concerned about some of the goings in the foreign exchange market.

“One of the things we discussed was what could be done to stabilize 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 is concerned about its impact on the average person since. Unfortunately, many activities that we do that are purely local are still referenced to the exchange rates in the parallel markets.

“We have discussed and shared with him what we’re doing to improve supply. If you look at the official market, you will find that that market has been fairly stable, and the spreads of the difference do not fluctuate 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 topped 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.

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

“So, I hope this helps. We are looking at it and doing things that will significantly impact the market in a few days, 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,” the temporary apex bank chief said.