Currency crash: CBN Governor meets with bank chiefs today
The Governor, Central Bak of Nigeria, will on Thursday (toda0 meeting chief executives of commercial banks in the face of steady decline in the value of the country's currency the naira and the consequent depletion of forerign exchange reserves.
The currency which up till late last year sold within the band of N155 to N160 to the dollar has depreciated to around N200 to the dollar, in fast response to the crude oil prices which have fallen by more than half in the period.
The meeting which is holding under the aegis of the Bankers' Committee, comprising of the Central Bank of Nigeria (CBN), and Managing Directors of commercial banks in Nigeria is to hold Lagos.
The local currency, on Wednesday, tumbled to a new record low of N202 against the United States dollar at the interbank segment of the foreign exchange market, a situation dealers attributed to the postponement of the elections.Analysts believe that the case of currency which has hit record low this week has been exacerbated by the shift in polls from February 14 and 28 to March 28 and April 11, which has fuelled apprehension of foreign investors.
The fear that the elections may not hold at all or turn violent has made many of the investors to be ultra cautious in the deployment of their resources in the Nigerian economy, with some of them converting their assets into dollars, thus increasing the demand for foreign exchange and putting pressure on the naira.
The dollar sold for N210 at the black market on Tuesday.
The naira crossed a N200 low for the first time on Tuesday, having fallen to N196 against the greenback on Monday, Nigeria's foreign exchange reserves fell by $619 million in one month to close at $33.873 billion as at February 5, as the Central Bank of Nigeria (CBN) continues to defend the the local currency.
The Rainbow learnt that the meeting would centre on heow to check the excesses of some banks, which have helped to fuel speculative trading on the foreign exchange and other measures to be taken to stabilise the forex market.
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