Tuesday, October 27, 2020

CBN decries speculation as naira plunges

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Declining export receipts from oil and speculative activities of the Bureau De Change operators among other challenges of the COVID-19 pandemic on the economy will put more pressure on the naira.

The Central Bank of Nigeria said this in its report on Monetary, credit, foreign trade and exchange policy guidelines for fiscal years 2020/2021

The value of the naira plunged further as it exchanged at 465/$ on the parallel market on Monday, after it exchanged at 460/$ on Thursday.

It had earlier exchange at 430/$ when the CBN commenced forex sales to the BDCs earlier in September.

The viability of the external sector in 2020 is expected to deteriorate, given the present worsening current account balance and depletion of external reserves driven largely by decelerating export receipts, particularly oil.

As a result, external reserves were expected to lie between $29.9bn and $34.3bn at end-December 2020 (predicated on current declining oil price between $20 and $40).