Business Hilights
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Our market monitoring, intervention spurred naira gain, not Gbadamosi – CBN

The growing excitements being expressed by majority of financial pundits may have compelled the management of the Central Bank of Nigeria (CBN) said the recent appreciation of the Naira against other currencies was the result of its market monitoring and intervention.

Acting Director of Corporate Communications at the CBN, Mr. Isaac Okoroafor, Thursday in Sokoto, gave the explanation, saying the apex bank will continue to act within its powers to manage the monetary policies for the growth of the country at all times.

He however, voided claims that the allegations by Mr. Babatunde Gbadamosi on the illegal sales of foreign currencies at ridiculous rates were responsible for the change in forex policy.

Business Hilights recalls that Gbadamosi, a Lagos businessman and former governorship candidate in his state had made strong allegations of racketeering within the rank of the CBN which he said caused the disparity in the allocation of foreign exchange to cronies of the present administration.

Gbadamosi was subsequently invited by the DSS and detained since last week Wednesday but was released this Thursday evening after one week at the DSS headquarters, Abuja.

The businessman further accused the CBN of selling dollars to some people for as low as N3 to a dollar.

But in a swift statement after the worrying allegation, the CBN clarified the transactions in question were third party transactions like Japanese Yen to the South African Rand or Euros to U.S Dollars.

However, CBN was quick to add that the ongoing appreciation of the Naira was in no way connected to the allegations of Gbadamosi.

Okoroafor 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.

“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”, CBN Spokesperson noted.