Rising FX Demand: CBN Vows To Halt Naira Depreciation

*Urges Nigerians to desist from speculative activitiesAa

The Central Bank of Nigeria (CBN) has advised Nigerians to resist the temptation to participate in the speculative activities of some players in the foreign exchange market in the face of rising demand for foreign exchange by Nigerians for both goods and services.

In a statement on Friday, Director of Corporate Communications, CBN, Mr Osita Nwanisobi said that the apex bank remained committed to resolving the country’s foreign exchange issues and had been working to manage both the demand and supply side challenges.

Nwanisobi said that the “bank would continue to make deliberate efforts in the foreign exchange sector to avert further downward slide in the value of the naira fuelled by speculative tendencies.”

While admitting that there was huge demand pressure for foreign exchange to meet the needs of manufacturers as well as those for the payment of tuition, medical fees and other invisibles, Nwanisobi said the CBN was concerned about the international value of the naira.

He added that the monetary authority was strategising to help Nigeria earn more stable and sustainable inflows of foreign exchange in the face of dwindling inflows from the oil sector.

Specifically, he noted that recent initiatives undertaken by the bank such as the RT200 FX Programme and the Naira4Dollar rebate schemhelpedto increase foreign exchange inflows to the country.

According to him, the bank’s records showed that foreign exchange inflows through the RT200 FX Programme in the first and second quarters of 2022 increased significantly to about $600m aofat June 2022. He disclosed that the Naira4Dollar incentive also increased the volume of diaspora remittances during the first half of the year.

He said interventions such as the 100 for 100 Policy on Production and Productivity, Anchor Borrowers’ Programme and the Non-Oil Export Stimulation Facility, among others, were also geared towards diversifying the economy, enhancing the inflow of foreign exchange, stimulating production and reducing foreign exchange demand pressure.

Reiterating an earlier position of the CBN Governor, Mr Godwin Emefiele, he urged Nigerians to play their roles by adjusting their consumption patterns, looking inwards and finding innovative solutions to the country’s challenges.

He said monetary policy alone could not bear all the burden of the expected adjustments needed to manage the challenges around Nigeria’s foreign exchange.

“It’s our collective duty as Nigerians to shore up the value of the naira,” he said.