Nigerian Central Bank’s move to flood market with dollars

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In an effort to save the free-falling Nigerian Naira, which is rapidly depreciating against the Dollar, the Central Bank has vowed to flood the financial market with dollars to and drive down the exchange rate and police the market adequately to ensure that every cent obtained is spent lawfully.

The free fall of the naira engendered by dwindling inflow of foreign exchange due to tumbling oil prices has returned the country to the days of massive capital flight and speculative bidding by banks reports claim.

At the parallel market, the Nigerian currency had sailed perilously close to N140 to the dollar.

The Central Bank of Nigeria (CBN) first confronted the crisis by blaming speculators for the depreciation and then threatening to make them ‘pay dearly’.

CBN governor Professor Chukwuma Soludo last week admitted, rather belatedly, that the central bank had deliberately allowed the naira to find its level because it lacked the foreign exchange to sustain the former rate.

In the last one month, the naira has depreciated in the official market from N116.50 to N134 to the US dollar.

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