CBN to Unveil New Measures to Strengthen Naira Against Dollar

Patrick OdeyAugust 14, 2023

2 minutes read

The Central Bank of Nigeria (CBN) has announced that it will soon introduce new measures to stabilise the naira against the dollar and improve liquidity in the foreign exchange market.

The CBN Acting Governor, Folasodun Sonubi, disclosed this to journalists on Monday after briefing President Bola Tinubu at the State House.

Sonubi said the President was worried about the recent developments in the foreign exchange market, especially their effects on the ordinary Nigerians.

He said the President urged the CBN to take swift and effective actions to address the situation and restore confidence in the market.

Sonubi explained that the CBN is working on various initiatives to increase supply and reduce demand in the market, as well as tackle issues in the parallel market. He said some of the factors affecting the parallel market are not purely economic, but also speculative.

He warned speculators that they risk losing huge amounts of money if they continue to bet against the naira, as the CBN’s new measures could potentially reverse the trend in the market.

He said he could not reveal the details of the measures, but assured that they would be implemented within a few days.

He said the CBN’s main objective is to create an efficient and reasonable operating environment that minimises negative impacts on the average Nigerian’s life. He said the CBN is committed to ensuring stability and improving the overall economic landscape.

He said: “The President is very concerned about some of the goings on in the foreign exchange market. He wants us to do something quickly to stabilise and improve liquidity in the market and also address the goings on in the various other markets, including the parallel market.

“He is concerned about how it affects the average person, since many of our local activities are still linked to exchange rates in the parallel market.

“We have discussed and I have shared with him what we are doing to increase supply. If you look at the official market, you will see that it has been fairly stable and the spreads have not fluctuated much.

“We do not believe that the changes in the parallel market are driven by pure economic demand and supply, but by speculative demand from people.

“Some of the plans and strategies, which I cannot share with you now, mean that sooner rather than later, the speculators should be careful because we believe that what we are doing will have a significant impact on the market in a few days time and they may lose a lot of money.

“But my presence here is more about reassuring the President that we are taking decisive action to address his concerns and I have given him total assurance of that.

“So I hope this helps. We are looking at it and we are doing things that will have a significant impact on the market in a few days time and we will all see it.

“Our goal is to ensure that we create an environment that operates at a level that is more efficient, but also reasonable and does not have a negative impact on the lives of the average person.”