The nation’s currency, the naira, on Thursday traded at N205.60k against the US dollar but later moderated to N201.70k/$ after the Central Bank of Nigeria (CBN) intervened in the market. With the closing price, the local currency lost N1.55k/$ or 0.8 percent as it closed at N201.70k/$ compared to N200.15k/$ the previous day at the inter-bank market, data from Financial Markets Dealers Quotations (FMDQ) indicated. Currency dealer’s ad- mitted that the CBN intervened on Wednesday and Thursday which helped calms the anxiety in the foreign exchange market. At the parallel market, naira also weakened by N1.00k/$ or 0.5 percent to close at N211/$ as against N210/$ the previous day.
Meanwhile, Godwin Emefiele, governor, CBN, has ruled out free float of currency, adding that the naira is appropriately priced despite a nearly 25 percent slump against the dollar in the last three months. Again, Emefiele assured the public and stakeholders of foreign exchange that there is no need to panic as the CBN is committed to meeting genuine demands of foreign exchange. “We are not in the best of times but there’s no need to panic,” he told CNBC Africa in an interview.
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He ruled out an emergency Monetary Policy Committee meeting, and said floating the currency was not an option. The naira has crashed through the key level of N200 to the dollar this week in a rout sparked by weak oil prices and escalating tension over the postponement of a presidential election in Africa’s biggest economy.
In the latest update on its reserves, the CBN said its stockpile of dollars had dropped to $33.4 billion as of February 10, a decline of $1 billion in nine trading sessions since January 28. The Federal Government needs to take immediate action to resolve the uncertainty created in the foreign exchange market which led to a shut down on Wednesday of the interbank market after naira exchanged for N205 against the US dollar, reach- ing upper limit of its circuit breaker, analysts have said.
