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Godwin Emefiele CBN reveals why Naira appreciated

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Godwin Emefiele play Nigeria's central bank Governor Godwin Emefiele speaks during the monthly Monetary Policy Committee meeting in Abuja, Nigeria. (REUTERS/Afolabi Sotunde)

The Central Bank of Nigeria (CBN) has revealed that the appreciation of the Naira is due to its consistent intervention in the forex market.

According to Punch, the CBN acting Director, Corporate Communications, Isaac Okoroafor also debunked allegations by a businessman, Babatunde Gbadamosi that some fraudulent practices are going on in the CBN.

Reports say Gbadamosi had earlier alleged that the CBN was selling dollars to some people at N3 to a dollar.

Okoroafor, who spoke to newsmen in Sokoto on Thursday, March 2, 2017, said “the transactions in question were third party transactions like Japanese Yen to the South African Rand or Euros to U.S Dollars.”

He said “I want to state categorically that there is no relationship whatsoever between the allegations by the so-called person [Gbadamosi] that dollar was being sold at 61 kobo and the current appreciation of the Naira.

“What led to the appreciation of the Naira includes the following:

“The CBN has done its intelligence work on the market and we came to the realisation that much of what was driving the demand on the BDCs and the parallel market was speculation.

“We reasoned that since there is a lot of pressure on the two segments from people seeking to buy foreign currencies for BTA, tuition and medical, that if we successfully address that, the pressure will come down.

“Also, before now, the level of our reserves was not enough to make us comfortable to really do the kind of intervention that is required.

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“We decided to do so now because we are a bit more comfortable with our level of reserve.”

“Let me also state as proof that when we placed $500 in the market only $370 was taken.

“That tells you that the real demand is $370m. When we placed $230m in the market, only $221m was taken.

“Anybody who has run afoul of the law, and the security agencies have caught up with him, should go and face his or her case and stop causing confusion amongst participants in the market,” he added.

You will recall that the National Economic Council (NEC) called on the Central Bank of Nigeria (CBN) to review the exchange rate policy.

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