The Central Bank of Nigeria (CBN) has vowed to fight off speculators taking bets that the naira will be devalued after Kazakhstan became the latest country to abandon control of its currency.
“We haven’t seen any reason so far to institute a change in the foreign-exchange policies,” Special Adviser, Media, to the CBN Governor, Ugochukwu Okoroafor, told Bloomberg.
He added: “The preponderance of foreign currency in the country has led to speculative attacks on the naira. People who have done it in the hope we’ll devalue will be hurt.”
After imposing trading restrictions in February to prevent dollars from fleeing Africa’s largest economy, importers have been unable to pay suppliers, a thriving black market has sprung up in foreign banknotes and a collapse in government oil revenue amid sliding crude prices has left teachers unpaid.
The naira’s exchange rate needs to strike a balance between Nigeria’s dependence on oil for export earnings and the country’s need to import most of its goods, Okoroaforsaid.
“The volume of speculation on our currency is huge,” Okoroafor said. Genuine demand for foreign exchange will be met by the central bank, “but once it comes as a result of speculation, we’ll fight back,” he said.
