Nigeria’s central bank plans to take measures that will impact currency markets in a few days time, its acting governor said on Monday, after meeting President Bola Tinubu to discuss ways to improve dollar liquidity on the official market.
Acting central bank governor Folashodun Shonubi’s meeting with Tinubu comes after the bank on Friday revealed a $19 billion commitment in derivatives in 2022, nearly the size of the country’s reserves.
Africa’s largest economy is looking for ways to shore up its reserves and stem the fall of its currency, which has hit record lows on the black market two months after trading restrictions were loosened on the official market.
The central bank had been propping up the naira and introduced several controls to keep the currency artificially strong under suspended governor Godwin Emefiele.
Tinubu, who criticized Emefiele’s handling of the currency at his inauguration in May, suspended the central bank governor on June 9, and lifted trading restrictions on the naira, which then weakened by more than a third.
“We are doing things which will significantly impact the market in a few days time,” Shonubi told reporters in Abuja.
Shonubi did not spell out what measures would be taken but said the president was concerned about the black market rate being a reference rate for local use and its inflation impact.
The naira has hit a succession of record lows on the black market due to dollar shortages on the official market where the currency has also weakened since the devaluation.
The unit was quoted at 945 naira per dollar on the black market on Monday, near a record low of 960 it touched last week. It has traded widely on the official market between 700 and 804 naira per dollar this month.
Tinubu’s monetary policy adviser and Nigeria’s likely next finance minister, Olawale Edun, has said a weaker black market rate was not backed up by economic fundamentals and that a more appropriate exchange rate would be around 700 naira to the dollar.
